Several housing bills rejected by Council of State

This recent development comes in the wake of prior setbacks, notably the unsuccessful attempts in June to reform property tax and implement a novel land mobilisation tax.

During the subsequent month of July, the Council of State dealt a blow to two more pivotal bills: the Baulandvertrag ("building land contract") and the proposal for ministerial re-parcelling.

The primary objective behind the "Baulandvertrag" initiative was twofold: first, to increase the availability of land for accelerated housing development, and second, to curb land speculation as much as possible and mitigate the concerning surge in housing costs.

The essence of the "Baulandvertrag" legislation was to prompt the transformation of reclassified building land into housing units within a tightly constrained timeframe. The stipulation was that should a housing project fail to materialise, landowners would face penalties, leading to the reclassification of the land as a protected green zone, rendering any construction prohibited for a span of six years.

Following an initial unfavourable evaluation, the Ministry of Home Affairs, along with the responsible parliamentary committees, introduced a series of amendments to the bill. Notably, the term "Baulandvertrag" was substituted with "easements aimed at determining temporary slots for land development and housing construction."

Nevertheless, the Council of State remains steadfast in its view that the proposed project is "unsuitable and disproportionate." Council members remain unconvinced that the outlined measures would effectively incentivise new housing construction. Instead, they advocate for expropriation as a more potent measure compared to those articulated in the bill.

Minister Taina Bofferding has taken action in response to the Council of State's latest adverse evaluation. A Ministry of Home Affairs representative confirmed that legal experts within the ministry have been tasked with conducting an exhaustive legal assessment. Subsequent modifications to the bill may be contemplated in collaboration with the relevant parliamentary committees. However, any such revisions are unlikely to transpire before the legislative elections scheduled for 8 October.