Does the rent-price cap deliver any benefits?
The Burden of Paying Rent in Peaceful Villages
For those blessed with a serene life in their own cozy homes, the concept of rent hikes feels like a distant worry. Yet, when our young ones move to bustling cities for studies or jobs, it becomes a pressing issue. Suddenly, the question arises: how much do we have to shell out for an outdated one-room apartment? If the landlord abides by the rent control guidelines - which are part of the problem - the rent shouldn't exceed the local averages by more than 10 percent upon re-rental. The current coalition wants to extend this guideline until 2029, stirring up plenty of opposition along the way.
Creating Problems - Not Solving Them
Even within the governing parties, there's plenty of contention over the rent control. Some find it too lenient, while others view it as ineffective. CDU legal politician Axel Müller, a representative for Ravensburg constituency, is actively against a renewed and isolated extension of the rent control. He states that it doesn't address the housing shortage in overpopulated areas. "Numerous studies demonstrate that the rent control, due to its investment-suppressing effects, partially stifles the urgently needed new construction of apartments and hence exacerbates the housing crisis in the long run," Müller says.
Not a Fresh Endeavor
The CDU politician also raises constitutional concerns about the planned extension. When the legislation initially introduced the rent control ten years ago, it came with an expiration date - it was to apply for five years. In 2020, it was extended for the first time for another five years till 2025. Now, a second extension is under consideration.
However, the Federal Constitutional Court highlighted in 2019 that the temporal limitation of this instrument is "expressly a constitutional requirement for its permissibility," Müller emphasizes. "By planning the second extension, we are moving progressively further away from this constitutional requirement and risking disproportionate interference with the property right according to Article 14, Paragraph 1 of the Basic Law."
Where Does the Rent Control Apply
Interestingly, the landlords in Ravensburg and Biberach aren't affected by the Bundestag's decision. Unlike Stuttgart, Ulm, Reutlingen, Tübingen (and 85 other municipalities), the Baden-Württemberg state government hasn't classified these two cities as areas with a housing crunch. On the other hand, the Bavarian government has identified numerous Swabian cities, like Augsburg, Kaufbeuren, Kempten, and Memmingen, as having a housing crunch. The scenario is vastly different in the eastern states. For example, in Mecklenburg-Western Pomerania, the rent control only applies in Rostock and Greifswald.
Nevertheless, property owner associations like "House and Ground" fiercely criticize the proposed extension: "If the rent control lasts until the end of the legislative period, providing the population with affordable and energy-efficient housing can no longer be guaranteed," association president Kai Warnecke asserted on Monday. "Another smokescreen is being thrown, and the solution to the problems on the rental housing market is being postponed."
Not surprisingly, tenant associations and politicians from the Greens, Left, and even the SPD are taking an opposing stance. They advocate not only for an extension of the rent control, but also push for its abolition and broadening to newer buildings. The Left faction advocates in a bill for allowing exceptions for new apartments for up to five years after completion. However, the federal government insists that apartments built after 2014 are considered new and thus not subject to the rent control.
Rent Increases - A Growing Problem
Above the debate on the details lies the question: Has the rent control really made a difference? Looking at the rental price increases in major cities, district towns, and independent cities, the answer is: no. Double-digit increases in rental prices are not uncommon and have even reached rural areas. Despite this, supporters of the rent control do not question the instrument itself but criticize that it provides opportunities for landlords to circumvent legal requirements - also because tenants fear negative repercussions and don't assert their rights. The fitting keyword for this: eviction due to personal use.
On Thursday, the Bundestag will vote on the extension of the rent control. According to the CDU politician Müller, this project would only be meaningful if housing construction - through initiatives like "Bauturbo" - is promptly and effectively promoted. "Otherwise, it remains a purely symptomatic intervention that doesn't solve the actual problem."
[1] Source: Bundesverband Mieter und Mieterinnen (BMM)[2] Source: Federal Ministry for Housing and Urban Development[3] Source: Statista[4] Source: Deutsche Wohnen[5] Source: Network for Affordable Housing (NAH)
In the ongoing debate about the rent control, CDU legal politician Axel Müller argues that an extended and isolated renewal of rent control doesn't address the housing shortage in overpopulated areas. He further contends that theрен installation of rent control for an extended period could risk disproportionate interference with the property right according to Article 14, Paragraph 1 of the Basic Law. Meanwhile, property owner associations like "House and Ground" view the proposed extension as a delay in providing solutions to rental housing market problems, stating that it may no longer guarantee the provision of affordable and energy-efficient housing.
