Political visions for a sustainable and digital future in the construction and real estate sector

Editorial note: The Free Voters (FW) have not presented a specific election manifesto for the federal election. Their positions on climate protection and the building sector can be found in last year's European election manifesto. In it, they emphasize the importance of energy efficiency and the promotion of renewable energies in buildings. They advocate for the refurbishment of existing buildings to reduce energy consumption and call for financial incentives to encourage private investment in energy-efficient technologies. They also call for a simplification of bureaucratic procedures to accelerate the implementation of climate protection measures in the building sector.

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Sustainable living: ways to reduce emissions in the building sector

Energy efficiency in the building sector (1) plays a central role in achieving national climate goals. While sociopolitical will for a more climate-friendly building sector is crucial, subsidies and government budgets offer owners and companies additional financial incentives (2) to modernize their properties and make them more sustainable. Which political visions include reducing emissions in the building sector? What plans do the parties propose in their election manifestos for the federal election in February 2025 to promote energy-saving refurbishment measures? And what opportunities and challenges could this pose for owners, tenants, and companies?

The parties’ plans according to their election manifestos

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SPD

The SPD plans to introduce binding efficiency standards to achieve climate targets in the building sector. It is committed to comprehensive funding programs for replacing fossil heating systems and energy-efficient refurbishments. Priority will be given to supporting older buildings (3) through low-interest loans and grants to make refurbishment measures attractive for young families and rural areas.

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CDU/CSU

The CDU/CSU is relying on tax incentives, such as the deductibility of refurbishment costs, to facilitate investments in energy-efficient modernization. It is also focusing on promoting climate-friendly technologies to make it easier for citizens to switch. Existing funding programs, such as those offered by KfW (4), are to be reformed and more closely linked to efficiency standards. Furthermore, educational campaigns are intended to raise awareness of climate-friendly lifestyles.

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The Greens

The Greens propose a combination of tax incentives and direct funding to promote the energy refurbishment of buildings. They call for the mandatory use of CO₂-neutral heating systems such as heat pumps and extensive investments in heating networks. To this end, they plan to provide extensive subsidies for the replacement of fossil heating systems and the introduction of CO₂-neutral alternatives such as heat pumps. Renovated buildings should be considered taxonomy-compliant to facilitate future investments.

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FDP

The FDP is committed to market-oriented approaches and technology-neutral solutions to promote energy-efficient refurbishments. Tax incentives and reduced bureaucracy should play a key role in strengthening private investment and minimizing regulation. At the same time, innovation funding should facilitate access to new, climate-neutral technologies.

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AFD

The AfD rejects binding measures for climate neutrality and CO₂ reduction in the building sector and relies on voluntary measures and protection of existing rights (5). It views central specifications and regulations critically, as these could increase construction and housing costs. Instead of relying on specific subsidy programs, the focus is on reducing ancillary construction and housing costs.

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The Left

The Left Party calls for socially just support for citizens, for example by covering the costs of climate-friendly refurbishments for low-income households. Costs should not be passed on to tenants, and government subsidies should support particularly low-income households. Free educational programs should also provide information about sustainable lifestyles.

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BSW

The BSW relies on voluntary measures and citizens' personal responsibility to reduce emissions. The party largely rejects government intervention or binding regulations. The BSW emphasizes market-based solutions and calls for the removal of regulatory barriers to facilitate energy-efficient refurbishments. Specific funding programs are less discussed, while the strengthening of municipal decision-making freedom is emphasized.

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The classification of our ESG experts

• The introduction of binding efficiency standards is necessary to ensure comparability and reliability. This also means that we must create data transparency regarding the energy consumption of buildings to enable a true comparison with other buildings of similar construction, location, and environmental factors.
• Political will is needed for energy-optimized buildings to reduce operating costs through energy-saving refurbishment measures and thus lower costs for owners and tenants (Source: Report: This is how heating is done – Results of the 2021 Heat and Living Panel ).
• Technology-neutral solutions : The use of technical, mostly minimally necessary, and resource-saving measures must receive greater attention in the funding landscape so that these solutions can be increasingly used in the PropTech sector and not just the building envelope, but also, in particular, the building technology, can be efficiently utilized and optimized. (Depending on the building type, a technology-neutral refurbishment plan can save between 16 percent and 33 percent of investment costs compared to a technology-specific refurbishment plan. Source: TU Darmstadt: Management Summary of the study "Energy-efficient Building Renovation in Germany" )
• Reducing bureaucratic hurdles : Owners must be able to implement energy-saving refurbishments, regardless of environmental protection or regulatory hurdles. At the same time, all stakeholders must understand that failure to implement refurbishments will result in significantly higher follow-up costs (not only due to rising CO₂ taxes and insurance premiums, but also direct costs due to climate change). (German industry is striving to reduce energy consumption and CO₂ emissions, but bureaucracy is holding them back: According to an EY study, 75 percent of companies feel hampered by regulatory hurdles and lengthy processes. Source: EY Decarbonization Barometer 2024 )
• Government subsidies remain important. Funding must be considered and made available based on the complexity of the refurbishment project. This can sometimes significantly reduce refurbishment costs, which can ultimately have a positive impact on tenants' costs. (The KfW subsidizes the installation of modern heating systems with up to 70 percent. Source: Finanztip )

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Digitalization in the real estate sector: How parties want to accelerate approval procedures and the development of smart technologies

The speedy processing of building permit applications is a crucial factor for the implementation of construction projects, particularly in the areas of residential construction and energy-efficient refurbishment. Long approval times and complex procedures can delay projects and drive up costs. Therefore, accelerating planning and approval procedures (6) is becoming increasingly important – not only for companies and investors, but also for citizens waiting for urgently needed housing (7) or refurbishments. Digitalization offers numerous potentials, such as more efficient administration, data-driven decision-making, and smart buildings. How do the various parties address the length and efficiency of building permit procedures (8) in their election manifestos, and how do they intend to promote the digitalization of the real estate sector?

The parties’ plans according to their election manifestos

SPD

The SPD aims to accelerate planning and approval procedures through comprehensive digitalization to ensure faster decisions and reduce bureaucracy. At the same time, it promotes cooperation between authorities to make complex procedures more transparent and efficient. It also relies on government investment in smart city concepts to advance digital technologies in cities.

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CDU/CSU

The CDU/CSU emphasizes the importance of uniform standards for digital processes and aims to expand the digitalization of public administration. It is committed to reforming planning and approval procedures with a focus on clear specifications and time limits. Smart technologies should be increasingly used in building management to achieve efficiency gains.

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The Greens

The Greens aim to reduce bureaucratic hurdles by promoting digital solutions and standardized procedures. They are committed to the introduction of nationwide digital building permit applications and the promotion of smart technologies for energy-efficient buildings. Data platforms are to be created to support climate-friendly urban development. They also call for approval processes to be more closely aligned with sustainability goals in order to meet ecological requirements.

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FDP

The FDP emphasizes the importance of less regulation and faster approval processes to promote investment. Simplified procedures and a digital building permit application process are at the heart of its proposals. It emphasizes the importance of competition to promote innovative solutions such as AI-based applications.

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AFD

The AfD advocates for simplifying building regulations and removing bureaucratic hurdles to enable faster procedures. It places a strong emphasis on strengthening local decision-making powers. The AfD rejects comprehensive government intervention. Digital building applications should remain voluntary to avoid disadvantaging citizens with less access to digital technologies.

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The Left

The Left Party calls for transparent and simplified procedures to facilitate access to building permits. They place particular priority on municipal planning instruments designed to promote social housing. Furthermore, the Left Party supports state-supported digitalization programs that primarily benefit small and medium-sized enterprises. They also call for the expansion of public data platforms for the transparent planning and management of real estate projects.

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BSW

The BSW relies on market-based approaches and streamlined procedures to reduce the duration of building permit applications. They advocate for fewer regulatory requirements and better coordination between the authorities involved. Furthermore, the BSW calls for the strengthening of private sector initiatives to digitize the real estate sector. It rejects government regulation; instead, the market should drive innovation.

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The classification of our ESG experts

• The creation of a nationwide uniform building code is one of the most important cornerstones for implementing rapid conversion and new construction across the country and for significantly advancing energy-efficient refurbishments across the country.
• Reducing bureaucracy through digitalization , especially in application processes for refurbishments, new construction, and conversions, as well as communication between authorities, is essential for the future of the real estate industry in Germany. (In 2023, the number of approved building permits for apartments fell to approximately 260,000—the lowest figure in the last ten years. Source: Statista: Building permits for apartments in Germany up to 2023. )
• The digitization of buildings and their associated data pools for the purpose of collecting sustainability goals must be facilitated through smarter data protection regulations. (Approximately 76 percent of companies in Germany state that the existing legal uncertainty regarding the specific requirements of the GDPR poses significant difficulties. Source: Statista: Survey on Challenges in Implementing the GDPR in Germany 2024 )
• The use of Building Information Modeling (BIM) in new construction, refurbishments, and the general management phase should be introduced as a nationwide standard and subsidized for owners. (The adoption of Building Information Modeling (BIM) in Europe has increased steadily since 2009 and is growing by approximately 10 percent annually. BIM is currently used in around 50 percent of construction projects in Europe. Source: Novorender.com – How Norway Cut Infrastructure Project Cost Overruns and Delays by Over 50 Percent .)
• The development of modern concepts is to be encouraged to create more efficient local heating networks and support the decarbonization of the real estate stock. This should also be supported by the government. (The market for smart city concepts is growing. Source: Fortune Business Insights )

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Solutions for a climate-friendly future and livable environments

Protecting natural resources and combating climate change (9) are among the central challenges of our time. Measures for nature conservation and reducing greenhouse gas emissions are closely linked to political decisions. Whether through the expansion of renewable energies (10), the promotion of sustainable construction methods, or the protection of ecosystems – the parties' approaches are diverse. What are the parties' positions on nature conservation and climate change, and which strategies promise efficient solutions and noticeable effects?

The parties’ plans according to their election manifestos

SPD

The SPD is committed to a comprehensive climate protection plan that includes the expansion of renewable energies as well as the protection of ecosystems. It emphasizes that climate protection must be socially just, for example through funding programs that benefit broad sections of the population.

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CDU/CSU

The CDU/CSU focuses on promoting climate-friendly technologies and the compatibility of climate protection and economic growth. Nature conservation is viewed as an integral part of climate policy, particularly with regard to the preservation of rural areas.

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The Greens

The Greens see climate protection as the central pillar of their policy and call for a phase-out of fossil fuels as quickly as possible. At the same time, they advocate for the restoration of landscapes and the protection of endangered ecosystems in order to preserve natural CO₂ storage.

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FDP

The FDP relies on market-based approaches to climate protection, such as the European Emissions Trading System, to reduce greenhouse gas emissions. They emphasize the role of innovation and technology in enabling the transition to a climate-neutral economy without neglecting nature conservation.

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AFD

The AfD rejects binding climate protection targets and advocates for increased use of fossil fuels ( 11 ). Nature conservation is addressed primarily with regard to the preservation of traditional cultural landscapes, but without concrete measures to reduce emissions.

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The Left

The Left Party calls for a radical restructuring of energy and transport policy toward greater climate justice. Protecting nature and the climate is defined as a central social responsibility, with a focus on socially just solutions such as free public transport and targeted support programs for renewable energies.

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BSW

The BSW advocates for the sustainable use of resources and relies on voluntary action rather than government regulation. They support nature conservation measures, provided they are economically viable and locally adapted, and promote dialogue with municipalities and businesses.

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The classification of our ESG experts

• Smart and sustainably developed urban districts and living spaces promote a participatory, livable environment that is used more consciously, efficiently and sustainably by all people.
• The use of existing resources in the real estate portfolio should be planned for the long term, if possible. Existing buildings (including those in rural areas) must be optimized and expanded in a cost-effective manner. (The proportion of the rural population in Germany is declining. (Source: Ifo Institute Dresden )
• Climate protection remains one of the central challenges of the 21st century. It is essential to develop economically viable solutions – such as efficient energy-efficient refurbishments for the building sector – that minimize long-term risks while simultaneously considering social responsibility. (In Germany, at least €145 billion in damages were caused by the consequences of climate change between 2000 and 2021. Depending on how climate change progresses, the future costs by 2050 will be between €280 billion and €900 billion. Source: Federal Government .)

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Further information & sources

1. In Germany, approximately 15 percent of total greenhouse gas emissions are attributable to building heating. However, when energy consumption from electricity, district heating, and industrial buildings is taken into account, this share rises to almost one-third (UBA, 2023).
   Source: wwf.de
2. The BEG represents such state funding, which, among other things, optimises and supports the use of new heating systems, measures on the building envelope or existing heating systems.
   Source: bafa.de
3. In need of refurbishment: 42 percent of Germany's housing stock is old buildings built between 1949 and 1978.
   Source: finanzwelt.de
4. KfW is a development bank that, among other things, supports programs for the energy-efficient refurbishment of residential buildings. Both private individuals and companies can apply to KfW for funding to renovate, modernize, or utilize renewable energy.
   Source: kfw.de
5. Grandfathering ensures the legal preservation and continued use of structures and uses that were lawful at the time of their construction. Buildings approved under the law of that time may continue to exist and be used, even if they no longer comply with current building regulations.
   Source: berlin.de
6. In November 2023, the federal and state governments agreed on the "Pact for Accelerating Planning, Approval, and Implementation." To date, 30 percent of the agreed measures have been completed, while another 49 percent are in progress.
   Source: vdiv.de
7. Due to significantly higher immigration than originally expected, the housing demand for the period 2021 to 2025 has increased from 308,000 to 372,000 new apartments annually, according to a new regional population forecast.
   Source: iwkoeln.de
8. The processing time for a building application can vary depending on the federal state, the current order situation, and the scope of the project. It can take up to six months from the time of application for a building permit to be issued.
   Source: cosmodirekt.de
9. According to researchers at the University of Potsdam, global per capita GDP could be 19 percent lower in 2049 due to climate-related damage if social, economic and technological trends continue to develop as they have in the past.
   Source: bmwk.de
10. In 2023, 54.4 percent of the energy used was attributable to electricity generation from renewable energies, 38.4 percent to the renewable heating sector and 7.2 percent to biogenic fuels in the transport sector.
    Source: umweltbundesamt.de
11. The combustion of fossil fuels drives climate change, but at the same time remains essential for economic and social development. Therefore, a climate-neutral energy supply must be both sustainable and needs-based.
    Source: bmz.de

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