We are facing an enormous challenge: the climate crisis and scarcity of resources require a consistent paradigm shift in housing construction and urban development. Quality of life, health and aesthetics must be combined with environmental, resource and climate protection. This position paper of the German Environment Agency and the Commission for Sustainable Building (KNBau) at the German Environment Agency presents recommendations for the creation of affordable housing that is environmentally, climate and resource efficient, and at the same time climate-adapted, health and socially compatible. The recommendations are primarily addressed to federal policy-makers, especially the departments of building and urban development, environment, climate protection, transport and health.