Tenant Group Argues: Rent Price Cap Extension Falls Short in Addressing Affordability Issues - Insufficient Rental Payments Maintain Affordable Rental Rates
German Government's Proposed Extension of Rental Price Brake Falls Short for Berlin Tenants
The Berlin Tenant Association has welcomed the federal government's plan to extend the rental price brake (Mietpreisbremse) but has expressed concern about its sufficiency. The extension, which aims to limit rent increases in newly-leased properties by no more than ten percent compared to local comparative rents,* would run until December 31, 2029.
The managing director of the Berlin Tenant Association, Wibke Werner, emphasized the importance of the rental price brake at a federal level. "Currently, the rental price brake is the only instrument for limiting rents in new contracts, and Berlin is the epicenter for its application."
The association pointed out several shortcomings in the proposal, chief among them the exemption of new buildings completed after October 2014 from the rental price brake's scope. Werner advocated for revisiting the classification of these properties to better protect tenants. "It's no longer justifiable that an eleven-year-old house is still considered a new building," she stated.
The Berlin Tenant Association also highlighted issues with the exceptions placed on the rental price brake, citing examples such as comprehensive modernization and short-term rentals. In these cases, the association feels that landlords frequently exploit loopholes, pushing rents upward.
Looking beyond the rental price brake, the association has called for additional housing market regulations, such as the municipalization of housing companies. Werner explained, "The intention is to help get more apartments into the hands of community-oriented companies and not leave them to profit-oriented landlords."
The association also advocates for a rent cap, though it has been struck down by the Federal Constitutional Court due to a lack of competence for state legislation. The association suggests an opt-out clause that would enable states to implement a rent cap if they choose.
Berlin has experienced a significant increase in housing construction, with an average of 15,000 apartments built annually in recent years. The association maintains that stronger housing regulations are necessary to protect tenants effectively.
The Berlin Tenant Association suggests investing in community-oriented companies for the municipalization of housing companies, as a means to limit profit-oriented landlords' control over apartments. Additionally, they propose a community policy that includes an opt-out clause for state legislation, enabling the implementation of a rent cap in certain areas, such as vocational training institutions, to secure affordable housing within the real-estate sector.
