Location Policy in Frankfurt

I was recently at the Frankfurt Stock Exchange. Not to trade in securities, but as a member of the Frankfurt Chamber of Commerce and Industry (IHK), I had the opportunity to follow a discussion on Frankfurt's location policy. On many points, I could only marvel at how little the reality of the market has been politically recognized.

The city continues to grow, but there is a shortage of housing, commercial space, and building land. According to the Chamber of Commerce and Industry, there will be a shortage of around 64,000 apartments in the chamber district alone by 2030. At the same time, the demand for commercial and industrial space is increasing. Affordable living space is hardly available. This is exacerbating the shortage of skilled workers. Craft businesses are increasingly leaving the city due to high rents. There is a lack of space for logistics and data centers and the political will to provide it.

I am in daily contact with investors, property owners, and project developers. Their feedback is often that new construction in Frankfurt is hardly worthwhile. Construction costs are too high, political requirements are too rigid, and procedures take too long, making many projects uneconomic.

Anyone who believes they can force new construction with quotas has not understood the market. Local politicians should not see investors as opponents. Without investors, there will be no new apartments, neighborhoods, or vibrant cities.

Frankfurt must ask itself how it intends to remain attractive long-term. Without investors who are allowed to build economically, it will not succeed. If you want growth, you must give them the space the city cannot create. This requires the right framework conditions.

Ronny Kazyska