Tight housing market
Almost one in three people live in an area with rent controls
The cabinet has decided to extend the rent cap. But it doesn’t look like it will be passed in the Bundestag before the new election. The instrument is used in 44 of 82 major cities.
Almost a third of the German population lives in areas where rent controls apply. This is shown by an evaluation of data by the Federal Office for Building and Regional Planning. Accordingly, the tenant protection instrument introduced in 2015 applies nationwide in 415 municipalities with a total of 26.2 million inhabitants.
Where the rent cap applies, the rent when re-letting existing apartments may only be increased to the level of the local reference rent plus ten percent. The basis for this is a federal law that authorizes state governments to designate areas with tight housing markets in which rent control applies. However, new buildings from October 1, 2014 are exempt from rent control, as is the first rental of an apartment after extensive modernization.
Increases in the current rental agreement are also more limited
As the Federal Office announced, a lowered cap limit also applies in all municipalities with rent controls – with the exception of the city of Trier. This means that landlords can demand an increase of a maximum of 15 percent within three years for existing tenancies. In municipalities where the normal capping limit applies, an increase in existing rents of up to 20 percent of the local reference rent is permitted. According to the information, there are 87 municipalities nationwide with a lowered cap limit without rent controls.
If the Bundestag does not extend the rent control regulation by law, it will expire at the end of 2025. On Wednesday, the Federal Cabinet decided to extend the regulation until the end of 2029 and combined this with a change to the exemption for newly built or fundamentally modernized apartments. However, the project is unlikely to find a majority in the Bundestag before the new elections scheduled for February 23rd.
In Germany, just over half of the people live in rented apartments. The home ownership rate is therefore very low compared to the EU.
The data from the Federal Office for Building and Regional Planning show that the rent cap is used heavily, especially in Bavaria, where it applies in 208 municipalities. In Baden-Württemberg there are rent controls in 89 municipalities. According to the information, Hesse (49 municipalities) is in third place.
According to the authority, of the 82 major German cities with more than 100,000 inhabitants, 44 cities are currently using rent controls to limit the increase in rents for new rentals.
dpa
Source: Stern
I have been working in the news industry for over 6 years, first as a reporter and now as an editor. I have covered politics extensively, and my work has appeared in major newspapers and online news outlets around the world. In addition to my writing, I also contribute regularly to 24 Hours World.
