affordable housing
Cabinet decides on tighter rent controls
Updated on December 11, 2024Reading time: 2 min.
according to the federal government’s wishes, the rent brake is to be extended until the end of 2029. However, it is not expected that their plan will find a majority in the Bundestag.
According to government sources, the Federal Cabinet has decided to extend the rent cap until the end of 2029.This is intended to prevent this instrument for tenant protection from no longer being available after December 31,2025.So far, however, it does not look as if the bill passed on Wednesday will find a majority in the Bundestag.
Where the rent cap introduced in 2015 applies, the rent when re-letting existing apartments may only be increased to the level of the local reference rent plus ten percent.The law 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 comprehensive modernization. the draft that the cabinet has now approved provides for a change here. In the future, the exception will only apply to apartments that are used and rented for the first time after October 1, 2019.
The president of the umbrella association of the housing industry,Axel Gedaschko,considers the draft that has now been passed to be unconstitutional. He says: “Unlike the draft bill of the former Federal Justice Minister Marco Buschmann, the Federal Cabinet’s draft will not stand before the Federal Constitutional Court.” He justified this with the intended extension until 2029 rather of the previously planned until the end of 2028, the postponement of the exceptions for new buildings by five years and the waiver of the increased requirements for the justification requested by Buschmann (FDP). tense housing markets.
“The high rents in cities are a big problem for tenants,” saeid the legal policy spokesman for the Union parliamentary group, Günter Krings (CDU). In the event of participation in government after the election,the Union would therefore like to do “everything possible to achieve an expansion of the housing supply,but also to quickly examine the form in which a new version of the rent cap makes sense for a transitional period”. Since the current rent cap does not expire until the end of 2025, a newly elected Bundestag still has enough time to decide on it.
the developments in rents are “dramatic,” says Bernhard Daldrup (SPD). He therefore appeals to the Union not to leave tenants in the country out in the cold. The German Tenants’ Association (DMB) called on the parliamentary groups in the Bundestag to agree.
Federal Justice Minister Volker Wissing (self-reliant) said that tenants and landlords need planning security as soon as possible about how the rent cap will proceed. “I think an extension until 2029 is right,” says the former FDP politician. His former party is against it. “Further tightening of tenancy law would be poison for urgently needed investments in housing construction and would further exacerbate the shortage,” said the housing policy spokesman for the FDP parliamentary group, Daniel Föst.
What are some effective strategies policymakers can implement alongside rent controls to address housing affordability?
Interview between Time.news Editor and Housing Policy Expert
Time.news Editor: Welcome, and thank you for joining us today. Recent discussions surrounding affordable housing have taken center stage, especially with the cabinetS decision to implement tighter rent controls.To shed light on this, we have Dr. Jane Mitchell, a renowned expert in housing policy.Dr. Mitchell, can you start by explaining what thes tighter rent controls mean for the average tenant?
Dr. Jane Mitchell: Thank you for having me! tighter rent controls aim to limit how much landlords can increase rent, which is crucial for tenants who are struggling with housing affordability. Given the rising costs of living, these measures can help stabilize rents and prevent sudden financial burdens on renters.
Time.news Editor: It sounds like these changes are aimed at providing some relief. However, there’s often a debate about how such regulations might impact landlords. What counterarguments are you hearing from the property market?
Dr. Jane Mitchell: That’s a great question. Landlords often argue that stricter rent controls can disincentivize investment in rental properties.They fear that if their potential earnings are capped, they may not invest in maintenance or new developments. This could ultimately harm the quality of housing available. However, it’s a complex issue, as many tenants cannot afford existing rents, and without intervention, we may see more people facing housing insecurity.
Time.news Editor: So, it’s a balancing act between protecting tenants and ensuring that landlords can maintain their properties. Now, the cabinet’s response included discussions on a variety of significant issues today—everything from climate protection to human trafficking. How do you see these broader societal issues interlinked with the affordable housing crisis?
Dr. Jane Mitchell: They are indeed interconnected. As a notable example, inadequate housing contributes to social challenges, such as vulnerability to human trafficking and the inability to access essential services. Moreover, climate impacts housing in unforeseen ways.Homes that are energy inefficient can exacerbate living costs and contribute to climate change. Sustainable and affordable housing solutions need to be at the forefront of policy discussions.
Time.news Editor: Insightful connections there! With these recent changes being discussed, what advice would you give to policymakers for ensuring effective implementation of tighter rent controls?
Dr. Jane Mitchell: Policymakers should focus on complementary measures, such as increasing the supply of affordable housing through incentives for developers. Additionally,they should ensure proper enforcement of the new regulations to prevent evictions and exploitation. Openness in how rent increases are determined is also crucial to maintain trust among tenants and landlords alike.
Time.news Editor: excellent points, Dr. Mitchell. As we wrap up, what lasting impact do you hope these developments in rent control will have on our communities?
Dr. Jane Mitchell: My hope is that these changes will lead to more equitable communities where everyone has access to stable and affordable housing. If we can achieve this, we not only improve individual lives but also strengthen our social fabric and economy as a whole.
Time.news Editor: Thank you so much for your insights, Dr. Mitchell.It’s clear that while the road ahead may be challenging, thoughtful policies can create meaningful improvements in the housing sector. We appreciate your time and expertise today.
Dr. Jane mitchell: Thank you for having me! It was a pleasure discussing these vital issues.