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Federal Building Minister Horst Seehofer (CSU) is now planning higher hurdles for converting rental apartments into condominiums.
This provides for a new draft for the building land mobilization law, which is available to the German Press Agency in Berlin.
It is expected to be passed by the cabinet next Wednesday.
Then the Bundestag has to give its approval.
In areas with a "tight housing market", approval from the authorities should be required if a house is to be divided into condominiums.
Places come into question where, for example, rents are rising at an above-average rate or where the growing demand for apartments cannot be met by new buildings.
Exceptions are foreseen.
In a first draft of the law, the Federal Ministry of the Interior had already provided difficulties for converting into condominiums.
According to the ministry, this met with resistance from some state governments, which is why the regulation has been canceled again - which in turn brought the SPD on the barricades.
Group Vice Sören Bartol tied the approval of his group to concessions on this point and to tightening the building law.
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In the case of a building bid, the municipality can, among other things, oblige the owner to build on land within a certain period of time.
According to the latest draft, the possibilities for this are also to be expanded, also in areas with a tight housing market.
Here, too, Seehofer is planning exceptions, for example if the property is to be used as a retirement provision for the owner.
Bartol applauded the "good new bill".
"This is great news for both tenants and the municipalities in Germany," he told the dpa.
"With the Building Land Mobilization Act, we are giving municipalities the tools they need to be able to react to the dramatic situation in many cities and create more affordable living space Condominium being converted. "
With the planned expansion of the building law, Seehofer is implementing a recommendation from the building land commission with representatives from the federal, state, municipal and housing sectors from summer 2019.
At the housing summit in September 2018, the federal, state and local governments agreed on the difficult conversion of rental apartments into condominiums.
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mik / dpa