Leasing arrangements for brakes will extend through December 2029.
German Government Proposes Extension and Enhancement of Rent Brake to 2029
BERLIN—In an effort to protect tenants, the German federal cabinet has initiated a draft bill to extend the legal rent cap, known as the rent brake, until December 31, 2029. Justice Minister Stefanie Hubig (SPD) expressed the urgency of addressing the issue, emphasizing the need for affordable housing.
The rent brake is applicable in regions designated as tight housing markets by respective state governments. When moving into a new apartment, rent may only increase by up to 10 percent over the average comparative rent in the area. Exemptions from the cap include newly built apartments rented after October 2014 and those that have undergone comprehensive modernization.
In areas with tense rental markets, the rent brake has reportedly moderated the rise in rents. However, addressing the challenges persists, particularly in metropolitan areas, where high re-rental costs pose a financial strain for many, including average earners and families with children.
“Extending the rent brake is a matter of social justice,” said Hubig. Additionally, plans include stricter regulations for automatic rent increases and increased transparency with ancillary costs.
The German Tenants' Association welcomed the immediate extension of the brake, but criticized the continued exclusion of some exceptions. In contrast, the Homeowners' Association Haus & Grund felt the extension was a mistake and suggested housing benefit as a fairer alternative.
The extension represents the first step in improving tenant protection. Further measures, including tighter rules for index-rent contracts and controls over furnished apartments, are planned, as outlined in the coalition agreement.
In the argument over modernizations and older new buildings, some call for exceptions to be abolished and for violations of the rent brake to be penalized. Accusations of tenants being disadvantaged through short-term rentals and calls for increased construction, particularly with more building land, faster approvals, and lower costs, continue to circulate.
The rent brake is a temporary solution until housing markets stabilize, according to the CDU politician Jan-Marco Luczak. Nevertheless, the extension aims to provide quick security for tenants.
- The extension of the rent brake until 2029 is perceived as a step towards social justice, particularly for tenants in metropolitan areas who face financial strain due to high re-rental costs.
- To further mitigate the challenges in the housing market, stricter regulations for automatic rent increases and increased transparency with ancillary costs are being considered.
- Some suggest that to address the issue of housing affordability comprehensively, exceptions to the rent brake, such as those for modernized and newly built apartments, should be abolished, and violations should be penalized.
