Ways out of the Housing Crisis: Living in an Industrial and Business Park?

Erding in Upper Bavaria, Germany, May 13, 2025. How to mitigate the housing shortage as quickly as possible is a question that has been bothering the authorities in almost all cities, towns and villages in Germany. Creating residential space in areas currently used for purely commercial purposes could provide a solution, as planned in a business park in Erding, for example. The owner of the site, Erding-based real estate developer Jürgen Freiwald, together with Professor Ruth Berktold, architect and owner of the Munich-headquartered architecture firm Yes Architecture, recently presented plans to the town of Erding to do just that. They have met with broad approval. Erding’s municipal councilors have given the green light for a resolution on the development of a land use plan. The specialists of Drees & Sommer SE, a construction and real estate consultancy, provided their expertise to assist in the analysis of potential and design of a development concept. Now the company is on board again, and the team of experts is participating in drawing up a new land-use plan. 

The housing shortage is intensifying in Germany’s cities, while new construction activity has been sluggish. Planning permission was granted for around 216,000 apartments in 2024, a long way off the target once proclaimed by the government of 400,000 new flats per year.[i] The situation in the district town of Erding, 30 kilometers from Munich in the northeastern part of the administrative region of Upper Bavaria, is no different from that of any other place. According to a recent market analysis of the Pestel Institute, new apartment construction activity has dropped here too. Around 37,000 people live in the rural district of Erding. So, about 1,060 new apartments are needed each year to keep up with demand. However, the current construction activity is far from meeting this target[ii]

Project developer Jürgen Freiwald wants to change the situation in the South Erding business park. The total area of 15,000 square meters is currently mainly home of specialist retailers. “The shopping opportunities on the site are to remain, with even more business added. What is new is that we are planning a kind of urban village with as many as possible long-lasting housing solutions,“ says Jürgen Freiwald. 

The project includes several new buildings – not higher than seven floors – with a total gross floor area of 22,500 square meters, of which around 70 percent will be housing. This corresponds to roughly 180 new apartments. 

Attractive Mixed-Use Solutions for More Housing

For many years, Tobias Golz, team head at Drees & Sommer, has assisted developers and investors in the creation of future-proof neighborhoods. He has also participated in the preparation of the analysis of potential and the design of the development concept. “It is up to the individual cities, towns and villages to consider whether their commercial areas are also suitable for residential purposes. Against the backdrop of a declining office market, new solutions for the repurposing of vacant spaces are needed. It is all about creating attractive housing solutions in urban and close-to-urban business parks. The areas suitable are generally already very well developed, can be easily reached and usually offer a good infrastructure,“ explains Tobias Golz. For permanent private residential space to be possible in the industrial and business parks at all, the legal framework must be thoroughly checked and the land-use plans usually have to be changed.

Green, Traffic-Free Showcase Neighborhood 

The same is true for Erding: the creation of private apartments in commercial areas necessitates a change of Erding’s current land-use plan. Jürgen Freiwald comments: “Erding’s building committee voted in favor of a resolution for the preparation of a new land-use plan. This sets in motion the process for the development of a new land-use plan for the area, and we can start with detailed planning. For us, it is important that living and working go hand in hand, with shopping facilities and gastronomic venues at the doorstep.” A daycare center for children, assisted living for senior citizens and a medical center are planned. The companies currently based there are to remain on the site as far as possible; in fact, existing sales floor areas are to be extended from currently 3,200 to 4,500 square meters. “We want to make the business park an attractive place to spend time. To do this, we plan to remove much of the extensive paving currently in place and re-green many parts,” he adds.

Avoiding Conflicts of Use

For what has been initiated in Erding to work elsewhere, there are a few things to be taken into account. Drees & Sommer’s urban development and neighborhood expert, Tobias Golz,  points out: “The most important thing is thorough planning in order to avoid conflicts between the different types of use. The aim is to create a balanced mix that takes into account the needs of future residents, those in adjacent neighborhoods, and businesses – providing for heat and noise insulation, for instance. However, industry is generally no longer as loud as in the past, and in any case there are now more noise mitigation measures available.” Tobias Golz is of the opinion that there are also often benefits with regard to sustainability: with the conversion of commercial buildings into residential space, the basic structure of the building is preserved and carbon dioxide savings generated.