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Rents in Germany: SPD Wants to Resolve ‘Social Issue of 21st Century’

The German Social Democrats (SPD), who are Chancellor Angela Merkel’s junior partner in her current grand coalition, have already pressed home rent control measures. But since their effect turns out to be rather meager, they now insist on more steps.

Living in large cities is almost impossible for Germans with average or below-average salaries, since the rents are scandalously high. For instance in Hamburg, 800 Euro (925 U.S. Dollars or 716 British Pounds) is what landlords charge for a tiny 2-room apartment. Families will have to pay a lot more for larger places. On top of that, heating, electricity and other bills will pile up fast.

In Munich, things do not look good either. Even in Berlin, where rents used to be lower than in more posh cities, the situation is escalating. In Frankfurt, Stuttgart, Cologne and all over Germany it’s the same picture.

“The pressure on the leasing market is dramatic” the SPD says. The Social Democrats concede that measures they implemented earlier have deflagrated. Instead of rent control, ‘Mietpreisbremse’ in German, which used to be their favorite expression, they now want to prevent rents from increasing (‘Mietpreisstopp’), using bold measures.

Andrea Nahles, the SPD’s new chairlady, and her deputy Thorsten Schäfer-Gümbel just came up with a 12-point plan they believe will have an effect.

They want to limit rent increases by linking them to the inflation, meaning landlords would only be allowed to increase rents in certain areas by the inflation’s percentage. If the inflation is 0.5 percent, that number would be the maximum increase for rents.

The SPD wants this measure to apply to both existing and new leases, for a period of five years. Tenants who were charged too much would have the right to have those amounts returned to them.

Also in government-funded apartments, the Social Democrats want to guarantee lower rents for longer time periods. For half of all newly constructed apartments, any rental price increases will be limited, if the SPD gets its way. The party also says investors who build apartment blocks in the interest of tenants should be supported by the government. Companies which follow solidary criteria while constructing apartments would be rewarded with tax advantages.

On top of all of the above, the SPD wants to give municipalities the right to make investors sign leases which take into account their tenant’s interests. More transparency on the real estate market and more justice are additional points included in the plan. So are measures designed to make sure investors pay their real estate transfer tax, instead of bypassing it by applying tricks.

Another issue which increases the housing shortage in Germany is the transformation of rental apartments into owned ones. The 12-point plan says, legal loopholes used by landlords to convert apartments, in spite of laws limiting this kind of transformation in certain cases, should be closed.

There are far more issues, from the perspective of the SPD and tenants in Germany. In many cases, owners claim to need their apartment for private purposes, meaning they kick out tenants by pretending they want to move in themselves. But instead of doing so, they increase the rent substantially and sign leases with new tenants. The SPD wants to stop this from happening by passing a new law.

In addition, the measures are supposed to help students and trainees who can not afford high rents. The Social Democrat’s approach is definitely bold. To them, affordable housing is “the social issue of the 21st century.” They say the coalition agreement they signed with Angela Merkel’s CDU already included “good answers”, but those were “not sufficient”.

“We are ready to implement courageous and vigorous measures which live up to the size of this challenge”, the SPD’s plan reads. The party hopes it will be able to convince their coalition partner. And the plan’s authors pray voters will appreciate the initiative, since the SPD is drowning in the polls.