Real Estate

Cabinet decides: changes in comparative rent

The federal government is taking a further step against rising rents, especially in large cities. The comparison rent should be calculated differently. What does this mean for tenants?

With the residential summit, politics wanted to show the flag in the fight against housing shortages and rising rents. In order to dampen the rise in rents, the Federal Government now wants to further tighten it up. The Ministry of Justice expects that this change will save tenants € 117 million in the first year.

“This gives us better protection of tenants against displacement,” said Federal Justice Minister Christine Lambrecht (SPD). The Bundestag would still have to approve the changes.

Compare rents from six years instead of just four

When calculating the local comparative rent, rents from six years instead of just four will be used in future. This tends to reduce the comparative rent, as rents in many cities were significantly lower six years ago than they are today. To the comparison rent are rent increases and also the Rental price brake coupled. The Federal Government is thus implementing one of the points of the housing summit of September 21, 2018.

“But this should only dampen rent increases to a homoeopathic extent,” said the President of the German Tenants’ Association, Lukas Siebenkotten. The Federal Association of German Housing and Real Estate Companies (GdW) missed clear legal requirements for the creation of rent indexes.

Housing goals could not be achieved

Among other things, he referred to the Federal Government’s goal of creating 1.5 million new apartments in the current term of office. “This goal is missed with a crash,” he complained. That would be 375,000 apartments per year – however, only 287,000 apartments were built in 2018. The goal should not be achieved in the current year either.

The Child benefit, which is intended to help families to buy their own home, creates incentives to rent Condominiums to convert, criticized Siebenkotten. On the other hand, the promotion of urban development at a record level of 790 million euros this year is positive Federal budget. The increase in housing allowance is also to be welcomed.

Bau State Secretary: “Exorbitant Achievements Achieved”

“I think we have come a long way for just under a year,” emphasized the State Secretary for Building at the Federal Ministry of the Interior, Anne Katrin Bohle. “Looking at that number alone is not enough,” she said recently. “If you look at the number of building permits, if you look at the number of apartments created, then these are exorbitant achievements in view of the resources available.” This affects both the administration as well as the land available and the almost fully utilized construction industry.

The GdW also praises the improvements in Housing allowance or the continuation of subsidies for social housing, but criticizes falling funds compared to previous years. “Overall, the residential summit balance is mixed,” said GdW President Axel Gedaschko. Discussions about a rent cover or expropriations, which are carried out in the Berlin state politics, did however damage.

Gedaschko praised the support programs for age-appropriate renovation and burglar protection and urban development support – but demanded more money. The municipalities would need support in demolishing scrap properties and in dealing with old debts.

Criticism of the results of the residential summit

Haus und Grund also struggled with the format of the meeting a year after the residential summit. “The federal government is implementing its own decisions, but not the results of the residential summit,” said President Kai Warnecke. The owners’ association criticized that the peak meeting was only time for brief statements, but not discussions among the participants. Warnecke summed up: “The federal government is doing its best to reduce the costs of construction and living noticeably. Instead, exaggerated tenancy regulations are wasting trust and the reconciliation of interests between tenants and landlords is being abandoned.”

Of the Tenants’ Association one year after the residential summit draws a devastating balance. Nothing has changed on the housing markets in Germany, said Siebenkotten: “Living has become a risk of poverty.”

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