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14 11 2013
The rental control brake is about to come

The goal: to reduce the rental increase

Especially in the popular residential areas in the large German cities, in particular the inner cities and trendy neighborhoods, the rents have risen significantly in recent years. Therefore a lot of apartments there are unaffordable for normal earners. Therefore, tenants’ rights associations demand for some time now a rental control brake to limit further increases in rents. At that point, the following regulation shall be included in the coalition agreement: If an apartment is rented again after a tenant change, the new rent cannot be more than ten percent above the local comparative rent. The local comparative rent is specified in the rent index as a function of location, age and condition of the apartment. The rental control brake can be introduced wherever the housing shortage is especially large proven. Which areas are affected by this may be imposed by the countries. This regulation applies then for five years. Not affected by the rental control brake are newly built apartments that are rented for the first time. Extensive modernizations are also not affected by this.

The effect: unlike as hoped

But how does the rental control rate brake specifically work? For example, an 80 square meter apartment has been rented for 500 euros; this means 6.25 euros per square meter. After the long-term tenants have moved out, the landlord wants to rent the apartment for ten euros per square meter. There are a few potential interests; at the end the financially strongest gets the approval and pays 800 euros now for the apartment. After the introduction of the rental control brake, the landlord may take a maximum of 7.70 euros per square meter if the rent index is at seven euros per square meter. The apartment is therefore offered for 616 Euros. Nevertheless in this case the financially strongest candidate will get the approval for the tenancy agreement again, because the landlord wants to keep his rent loss as low as possible. People who earn less, theoretically could afford the apartment now, but still do not get the chance.

Housing shortage unresolved

The rental control brake can also not solve this problem. In addition: Since no new apartment is created by the rental control brake, the housing shortage in the cities remains.  By trend the housing shortage is even kind of reinforced by the rental control brake, because therefore newly built apartments seem less attractive for the tenants. The rents in the new buildings are usually significantly higher than the rent index level of the environment. When a tenant change occurs the rent therefore my not be increased until the rent index level has reached the new leases - which can take several years. There is only one way in which the housing shortage is eliminated and affordable housing for all segments of the population can be created: an extensive encouragement for building new apartments.