Jena's Residential Building Land Model

Tight Housing Market

Jena is one of the few cities in the new federal states with a population that has been growing steadily since the early 2000s. Combined with an increase in the number of statistical households, a steady decline in construction activity since 2016, and a very low vacancy rate of 2.1% (as of 2023, corresponding to approximately 1,250 apartments), this has led to a tight housing market in Jena. To remain competitive as a regional center and to be able to provide housing for skilled workers, an adequate supply of housing is necessary.

Municipal Land Ownership

The “Jena 2035 Housing Land Use Plan” defines the expected qualified demand for housing through 2035 as well as the necessary potential residential development sites . The update to the citywide land use plan (FNP) takes this land use framework into account. However, these urban planning concepts alone are not sufficient for the rapid mobilization of building land. If the city owns its own land, it can influence the social, urban planning, environmental, and fiscal goals of urban development. However, municipally owned land is very limited, and acquiring land is difficult due to the tight market. Only about 12 percent of all potential residential development sites identified in the “Jena 2035 Residential Development Plan” are owned by the city.

Social Housing

Without long-term land banking, it is not possible to ensure a socially responsible housing supply through the creation of rent- and occupancy-controlled housing, concept-based allocations, and the rapid provision of affordable housing. Publicly subsidized housing is particularly important for meeting the needs of low-income households. However, the stock of such housing has declined significantly since 2015. Due to the current funding conditions for the legislative term, supplementary subsidized housing construction in the Free State of Thuringia could not be carried out to the extent required through 2024.

The scarce supply of housing is driving up rents and building land prices—a trend that can only be countered by increasing the supply. Future urban building land policy is therefore of central importance for sustainable, socially and climatically just urban development.

The Ulm Model

Various municipalities in Germany already have a building land model in place and apply it to ensure socially equitable land use. These include, for example, Stuttgart, Munich, Potsdam, and Münster. The “Ulm Model,” which has served as a guide for some cities, has been practiced in the city of Ulm since the 1890s and is based in particular on the principle that the city purchases land at an early stage and retains ownership to steer long-term and sustainable urban development.

In accordance with the City Council resolution “From the Ulm Model to the Jena Model” (21/0977-BVdated December 8, 2021) a working group was formed consisting of representatives from the city administration, the municipal agency KIJ, and representatives from all city council factions to develop a “Jena Model” based on the “Ulm Model” of land reserve planning. As a result of an intensive working process and in consultation with other municipalities, it was determined that there is no blueprint for a land-use model.

The Jena Model must be tailored to the city’s unique circumstances and the associated significant constraints (location, topography, nature conservation, floodplains, specific settlement patterns, limited land availability, and constrained financial and personnel resources, etc.).

With this policy resolution, the City Council approved the following seven points as the guiding principles for Jena’s residential land use policy:

1. The City of Jena pursues the goal of sustainable and socially balanced housing development through the creation of housing that meets demand, within a socio-political and price-stabilizing target framework based on the currently valid version of the Housing Land Use Plan. This currently corresponds to a target of 4,830 housing units by 2035.
2. The City of Jena is promoting strategic land acquisition and the long-term reservation of key properties in accordance with ISEK Key Project No. 9, “Strategic Land Management,” with the goal of expanding the City of Jena’s municipal scope for action in the long term for the common good.
3. The City of Jena promotes the implementation of social policy goals as well as climate protection goals by initiating land-use planning procedures tailored to need to establish building rights, and in doing so, it particularly prioritizes the development of residential land under municipal ownership.
4. The City of Jena continues to actively manage the allocation of municipal building lots through the “concept-based allocation” process and the guidelines on criteria-based allocation of lots for owner-occupied homes (Homeownership Guidelines).
5. The City of Jena continues to rely on the commitment and involvement of private parties in building land development, provided they implement quantitative and qualitative housing structure requirements or enter into binding commitments.
6. The City of Jena strives for an appropriate and equitable distribution of building land development costs between the beneficiaries of the planning process and the city itself.
7. The City of Jena continuously pursues the preservation and development of Jena as a “city of short distances” through climate-friendly expansion—primarily near the city center—of compact, mixed-use structures with a density compatible with climate goals and the cityscape, and through the integration of urban green spaces in accordance with the “dual inner-city development” model.

This guiding principle builds upon existing City Council resolutions regarding Jena’s housing policy.

Sustaining Housing Policy: Guidelines and Concept Allocation

In order to provide a sufficient supply of high-quality housing within the city for the continued sustainable and socially balanced development of the housing market in the regional center of Jena, the City Council resolution “Consolidation of Housing Policy for Jena: Guidelines and Concept Awards” (20/0482-BVdated October 14, 2020), the price-stabilizing social policy goal of creating 4,830 housing units by 2035 was adopted.

ISEK Jena 2030+

In the Integrated Urban Development Concept Jena 2030+  (ISEK, City Council Resolution 17/1632-BV), Key Project No. 9 on “Strategic Land Management” sets forth the goal of strengthening the municipality’s scope for action through strategic land acquisition—a goal that can only be achieved by building a long-term land reserve (i.e., land banking beyond the current needs assessments of the sectoral plans) can be achieved. Strategic municipal land management serves the sustainable and responsible use of the limited resource of land and takes into account not only economic but also ecological, climatic, and social concerns.

Housing Policy Guidelines

The allocation of municipal building lots is governed by the “Housing Policy Guidelines” as the overarching strategy for Jena’s housing policy. These are supplemented by City Council Resolutions No. 20/0482-BVon the allocation of development rights for multi-story residential construction, No. 22/1740-BVon criteria-based allocation of land for owner-occupied homes, and No. 21/0903-BVon the creation of rent- and occupancy-controlled housing in accordance with the Jena model for social housing construction from 2020 to 2022.

Climate-Friendly Urban Development

The building land resolution can support the implementation of the vision of the “city of short distances” and climate-friendly urban development, because the key to climate-friendly expansion—primarily of compact, mixed-use structures close to the city center—lies in the municipality’s access to land. A land reserve owned by the municipality opens up planning options and creates a basis for the rapid, cost-effective provision of the necessary land.

The Jena Residential Land Use Model consists of the following four strategic components (see also Appendix 1, “Overview of the Strategic Components,” in the download section):

Component A – Development of Municipal Land

Municipal land ownership enables the rapid implementation of socially equitable, sustainable, and urbanistically sound residential land development. To meet the quantitative and qualitative goals of building land development, Jena is increasingly developing municipal land—in addition to privately owned land—that is included in the currently valid version of the Residential Land Use Plan to make it ready for construction.

For municipally owned residential development sites, urban land-use planning procedures are initiated as needed. The city is responsible for planning, development, and marketing. In doing so, the “Housing Policy Guidelines of the City of Jena” are applied (20/0482-BVregarding the allocation of projects in multi-story residential construction and 22/1740-BVregarding criteria-based allocation for single-family home lots). Furthermore, the city supports cooperative housing projects on its land (City Council Resolution 21/0989-BV).

In the future, for residential development sites designated for multi-story residential construction with at least 15 residential units, a minimum of 30 percent must be allocated to the creation of housing subject to rent and occupancy controls. A prerequisite for achieving this goal is an appropriate funding framework from the Free State of Thuringia.

Component B – Strategic Land Acquisition and Long-Term Land Reserve Policy

To meet the ongoing land requirements for short- and medium-term project development and to build up a long-term land reserve, the city must acquire land early and in sufficient quantities. In the future, the City of Jena (through its municipal agency KIJ) will increasingly acquire land that is specifically included in the current residential land use plan. In addition, it will purchase by private treaty other land suitable for development, land for nature conservation compensation and replacement measures, land suitable for exchange, and land intended for long-term, open-use land reserves.

On behalf of KIJ, the Land Management Department serves as a point of contact for property owners intending to sell and supports them throughout the entire purchase process, from the initial non-binding inquiry through to the conclusion of the purchase agreement.

In the future, the City of Jena will continue and intensify its use of the general right of first refusal (Section 24 of the German Building Code [BauGB]) and the special right of first refusal (Section 25 of the German Building Code [BauGB]). In this context, the city administration will examine the possibilities for enacting right-of-first-refusal ordinances and submit them to the City Council for a decision in each case.

Component C – Cooperative Development of Residential Building Land

The City of Jena also continues to rely on the commitment and involvement of private parties in the development of building land. Strategy Component C is based on the scenario where the sites to be developed are owned by third parties and, through Components C1 and C2, outlines two options for collaboration with private entities in the development of building land.

C1 – Proposed Zoning Plan

The city develops and prepares future proposed zoning plans upon full interim acquisition of the relevant properties (100 percent of the development area).

When marketing these development sites, the city appliesthe Concept Award (20/0482-BV) and the Homeownership Guidelines (22/1740-BV).

The city may, particularly for the purpose of creating owner-occupied housing or housing construction by existing property owners, grant former owners, upon request, a pro-rata right of retransfer of the developed building sites, whereby the majority of the sites are generally to be allocated for marketing through the Concept Award and/or the Homeownership Guidelines. The retransfer shall take place at the original purchase price plus the proportionate costs of the building land development. 

C2 - Project-Specific Zoning Plan

The use of project-specific zoning plans continues to serve as an important tool for the provision of housing by third parties. The project developer (housing companies, private individuals) is responsible for the development, construction, and marketing of the housing project. By signing a project development agreement (see Appendix 2, “Draft Letter of Intent for Project Development,” in the download section), the project developer commits to recognizing the principles of the “Jena Residential Building Land Model.” 

In the future, provided that there is a neighborhood-specific need and the city has established a corresponding priority, a minimum rate of 30 percent for the creation of subsidized housing will regularly be agreed upon with the project developer in the urban development contract. For residential construction projects in the small-scale segment, the marketing of owner-occupied homes—with a quota of at least 30 percent—shall be based on the “Guidelines for Criteria-Based Allocation of Municipal Residential Building Lots” (22/1740-BV) and carried out in accordance with the allocation categories 1 and 2 set forth therein (allocation based on social criteria and, in some cases, additionally taking into account the income situation of applicant households). In addition, the project sponsor commits to covering costs and other expenses. Competitive procedures are regularly used to address planning tasks and ensure urban design quality.

Module D – Mobilization of Residential Development Sites with Carried-Over Development Plans

Residential development sites with carried-over zoning plans (E-zones under the “Jena 2035 Residential Development Concept”) represent significant potential for creating housing in Jena. Building rights already exist here, but extensive obstacles stand in the way of mobilizing these sites. The potential development sites are generally spread across a large number of owners; in some cases, the owners lack the necessary willingness to cooperate or sell, and development infrastructure is not guaranteed.

In the adopted zoning plans, the City of Jena will advance the development planning for undeveloped potential sites and ensure their suitability for development through land readjustment—initially on a voluntary basis and subsequently through compulsory measures.

The resolution on the “Jena Residential Building Land Model” is a policy resolution. It sets forth the general strategic goals and guiding principles of Jena’s residential building land policy. To flesh out the details, the resolution includes a series of study mandates that will be addressed by an internal administrative working group during the implementation process that follows.

The City of Jena aims for an appropriate and equitable distribution of building land development costs between the beneficiaries of the planning process and the city itself. The planning beneficiary is to make a sustainable contribution toward the costs and other expenses associated with building land development. In the next step, the city administration will draft binding regulations regarding the content and scope of this contribution.

With this policy resolution, the city administration was also tasked with examining the extent to which the introduction of a revolving real estate fund would be appropriate to secure future financing for land acquisitions and developments. Revenues from building land development will be reinvested into the fund’s assets and should, as far as possible, be earmarked for further land acquisition and/or building land development.

As part of the implementation of the building land model, it may also be necessary to further specify the content of land policy instruments and tailor them to specific needs. Progress on the Jena building land model is to be reported starting in 2026.

1. What challenges are involved in implementing the building land model?

A development land model can generally be an effective tool for creating affordable housing, but it requires a clear strategy, political support, and a long-term land policy. The biggest challenges include the following aspects:

Land Availability

The city of Jena owns very little of its own (residential) building land and must first purchase it. Private owners often demand high prices or, in some cases, hold back land to profit from potential increases in value. To convert these speculative properties into future residential land, the city of Jena aims to purchase land at an early stage and make greater use of preemptive rights (Strategy Component B). Building up a long-term reserve of potential residential development sites is intended to give the city the ability to respond to unrealistic price demands and to initiate development elsewhere. 

Allocation of Funding

Social housing construction requires funding that is not available to the necessary extent under the current “Guidelines for the Promotion of Affordable Housing in the Free State of Thuringia” (07/2023). Here, the City of Jena must lobby the Free State of Thuringia to establish attractive funding conditions and thereby ensure the creation of social housing.

The City’s Human and Financial Resources

The successful implementation of the Jena Building Land Model entails additional and more intensive work tasks. The city’s expanded land acquisition policy and the management activities associated with Module C1 (planning, development, and marketing of new residential land) will result in a significantly increased need for financial and personnel resources at the city-owned enterprise KIJ. The same applies to the Urban Planning Department as a result of the intensified implementation of planning procedures, the preparation, conclusion, and monitoring of urban development contracts, ongoing reviews of appropriateness, and the drafting and enactment of preemptive right ordinances.

2. What does the Jena building land model mean for private landowners?

The building land model has direct implications for private landowners, particularly if they own properties in potential development areas designated for residential construction.

The “Jena 2035 Residential Land Concept” identifies the residential areas planned for Jena. These areas are consequently also designated as such in the land-use plan. However, potential new development areas in outlying zones (e.g., green spaces or garden land) do not yet have building rights.

Stages of Development for Building Land

Before residential development is possible on a site, the area goes through various stages of development. Building rights are only established through a binding zoning plan. Once the resolution to initiate the zoning plan is issued, the land becomes “land designated for future development.” Once the zoning plan is legally adopted, the land is referred to as “land ready for rough construction.” Only upon completion of the infrastructure development—that is, the construction of roads and the installation of utility lines for water, sewage, and other services—does the land become “land ready for construction.” These development stages also significantly affect the value of the property. This should be taken into account when setting asking prices.

Land Acquisition by the City 

If land owners—either today or for future generations—wish to construct residential buildings on land without building rights, this will only be possible in the future in cooperation with the City of Jena. The city develops so-called “proposal zoning plans” exclusively when it fully owns the land required for the planned residential development area. The city therefore proactively purchases the land as early as possible. To do so, it exercises the municipal right of first refusal and, if necessary, enacts right-of-first-refusal ordinances (Section 25 of the German Building Code (BauGB)). For every (former) owner who wishes to construct their own residential building, the city assesses whether the option for a proportional retransfer of the building lots constitutes a reasonable offer. This type of cooperation enables the landowner to obtain land ready for construction with virtually no risk and a high degree of planning certainty.

3. What advantages does the building land model offer project developers?

Jena’s building land model, through Strategy Component C2, enables residential land development through cooperation with investors. The city works closely with the project sponsors (investors) to ensure that the city’s urban planning goals are met while also taking the project’s needs into account. The investors are responsible for the development, construction, and, if applicable, marketing of the project. The city assumes a coordinating role.

Transparency and Security

A central objective of the Jena Building Land Model is to establish a regulated framework for negotiating urban development contracts under Section 11 of the German Building Code (BauGB), thereby ensuring transparency and certainty for all stakeholders involved in the planning process. The use of urban development contracts streamlines approval processes and ensures greater predictability regarding costs, obligations, and commitments. A transparent adequacy review ensures that the services to be provided by investors and the benefits they derive from the development of building land are in reasonable proportion to one another. Unjustified demands on the part of the city or the general public can be avoided, and the financial burden on investors remains balanced.

4. Why does the City of Jena want to use land readjustment procedures?

Residential development sites with a so-called “carried-over” zoning plan already have building rights. According to the “Jena 2035 Residential Land Concept,” these include the E-zones, which offer significant potential for 256 single- and two-family homes and 160 apartments in multi-family buildings.

Mobilization of Building Lots

Due to the large number of landowners and the lack of willingness—on the part of mostly individual owners—to cooperate or sell, the application of the interim acquisition model (Module C1) or the cooperative model (Module C2) is often not a realistic option. The City of Jena therefore views the instrument of land readjustment as an important means of providing and mobilizing building lots—not only for the construction of subsidized housing but also for small-scale housing development. While the obstructionist stance of individual property owners may complicate and delay the City of Jena’s goal of providing sufficient housing, it can no longer fundamentally prevent it.

Implementation of Legally Binding Zoning Plans

Land readjustment is a legally regulated land exchange procedure in which parcels of land within a specific area are reorganized to enable appropriate development. It thus serves to implement the legally binding development plan. The goal is to transform fragmented, disorganized parcels into developable land with appropriate infrastructure (roads, paths, green spaces). After the reorganization, owners receive a parcel of equivalent value that is fully developed and ready for construction. 

Voluntary Land Readjustment

The city first supports a voluntary land readjustment, in which landowners agree to a voluntary reorganization through a simple exchange of parcels. If this is not successful, a sovereign (official) land readjustment may be implemented. The Land Readjustment Committee is responsible for this process.