Michael Müller, the Lord Mayor of Berlin, went public recently with a comprehensive catalogue of housing policy needs. In an opinion piece for the Tagesspiegel, one of Berlin’s dailies, the Social Democrat mayor argued that it is high time to give the “needs of tenants” unambiguous “priority over lobby interests”.1
Müller wants his party, the Social Democrats, to side with the tenants and therefore demands that the “government use its resources for the benefit of those” who “are dependent on affordable housing.” In his opinion, German lawmakers should suspend all programs subsidising homeownership and instead focus solely on their rent policy. While Müller finds it understandable that many people have a desire for homeownership, he does not consider it the government’s job to use its resources to promote homeownership.
Müller Seeks Rent Moratorium
The argument makes a person wonder what exactly gave Müller the idea that oh-so-much is being done to sponsor home buyers. After all, the child tax credit for first-time home buyers that is supposed to kick in this year is the first and only measure to promote homeownership since the homeownership subsidy was rescinded in 2006. It is true that the “contracting-party-pays” principle is also being discussed for sales properties to relieve home buyers of the agent’s fee, but the introduction of the principle would not require public resources. By contrast, a possible reform of the real estate transfer tax would cause a loss in tax revenues—but the Federal Government is not planning such a reform at all.
Meanwhile, Berlin has long shifted the focus of its housing policy to tenant protection. Quite a number of the city’s districts have been zoned as historic district protection areas, and the boroughs are regularly exercising their right of first refusal to acquire rental apartment buildings in their own right or else to impose restraining agreements with investors. But Mayor Müller actually goes a step further in his opinion piece in the Tagesspiegel by bringing in the idea of a rent moratorium, meaning a ban on rent increases. Without elaborating the idea, Müller merely wrote that a possible rent moratorium should be negotiated with the housing industry.
Senator for Urban Development Does a U-Turn
In a remarkable parallel development, Berlin’s Senator for Urban Development, Katrin Lompscher of the Left Party, published an action plan for stepping up housing construction—and she did so the very same day the mayor’s opinion piece was published. Lompscher intends to create the option to fell trees even before the planning consent has been issued, on the one hand, while seeking to facilitate infill densification, on the other hand.2
This is startling insofar as the Senator for Urban Development issued a circular just last year that seriously raised the hurdles for topping up residential buildings and closing gap sites.3 The very same circular covered the issue of cutting trees back or down, either one being prohibited if the idea was to create a second emergency escape route, It appears that the number of infill densification measures plummeted as a result, which lately prompted Lompscher to think about retracting her circular.