Wednesday, 14 January 2026
Germany has launched one of its most far-reaching reforms of construction and planning law in more than a decade, aiming to speed up residential development and ease pressure on urban housing markets. The initiative, known as the “Bau-Turbo”, forms the first phase of a broader amendment to the Federal Building Code (Baugesetzbuch, BauGB), with further legislative changes expected in early 2026 .
Introduced in October 2025, the Bau-Turbo establishes a temporary fast-track mechanism designed to reduce approval times and unlock inner-city development potential. Central to the reform is a new experimental provision that allows municipalities to approve residential projects more quickly, even where no binding development plan exists or where existing planning law would otherwise require modification.
Under the new rules, extensions, additions and conversions of existing buildings can be authorised more rapidly, and residential construction is permitted in certain inner-city areas without a formal development plan. A key feature is a “deemed approval” mechanism, whereby projects are considered approved if local authorities do not respond within three months. While procedures are streamlined, core requirements such as building safety, fire protection and environmental regulations remain unchanged.
The reform also introduces greater flexibility in noise protection standards, enabling higher thresholds and innovative technical solutions in specific planning procedures. This is intended to make additional urban land suitable for residential use, particularly in dense city environments.
Although the Bau-Turbo does not include direct subsidies, it addresses what market participants identify as a major obstacle to development: lengthy and uncertain approval processes. In the short term, the measures are expected to lead to an increase in building permits and the reactivation of previously stalled projects, although a rapid rise in completed housing units is not anticipated. Over the medium term, municipalities that actively apply the new provisions could see a gradual increase in housing supply through densification and adaptive reuse, potentially contributing to price stabilisation in some local markets.
From an investment perspective, the reform is expected to increase the attractiveness of inner-city projects with clear approval prospects and strong municipal cooperation. Opportunities are likely to emerge in the redevelopment and densification of existing assets, mixed-use schemes supported by public infrastructure investment, and ESG-aligned projects that may benefit from new financing instruments such as the federal Deutschlandfonds.
The Bau-Turbo is also part of a wider policy package that includes infrastructure investment, simplified construction standards under the “Building Type E” concept, and public–private financing mechanisms. Together, these measures signal a shift in German housing policy from a focus on regulation towards facilitation and predictability.
While the reform will not resolve structural challenges such as high construction costs, labour shortages and financing conditions, it is widely seen as a significant step toward restoring confidence in Germany’s residential development market and improving the feasibility of new housing projects
Source: Periskop Development
