“Households with low reserves are threatened”

Apartments in Berlin

The German Tenants’ Association warns that the pressure on the rental housing market is increasing “enormously”.

(Photo: dpa)

Berlin At the beginning of the year, the German Tenants’ Association warned of dramatic upheavals on the rental market. “Many households will be financially overburdened by their housing costs,” said federal director Melanie Weber-Moritz to the Handelsblatt. By this year at the latest, many tenants will feel the enormous increase in heating costs, since the heating bill for 2022 with record prices, especially for oil and gas, will only be sent in the next twelve months.

Weber-Moritz said: “There is a risk of horrendous additional payments, which pose an existential threat to households with low reserves in particular due to the loss of their apartment.” Tenants in 2023 would therefore face a “very challenging year”.

According to the tenants’ association, the low level of housing construction is also contributing to the aggravation of the situation. “At the same time, new housing construction continues to collapse – even the housing industry only expects around 200,000 new apartments in 2023, a fraction of which will be affordable rental apartments,” explained Federal Director Weber-Moritz.

Government will clearly miss new building target

The federal government made up of SPD, Greens and FDP had set the target of 400,000 new apartments per year, including 100,000 social housing units. However, Federal Building Minister Klara Geywitz (SPD) recently admitted in an interview with the Handelsblatt that this goal will not be achieved in the foreseeable future due to material shortages, increased prices and the consequences of the Russian war of aggression in Ukraine.

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The General Association of the German Housing and Real Estate Industry (GdW) predicts that around 200,000 new apartments will be built in 2023 and then “even fewer” in 2024.

The tenants’ association refers to the consequences: The pressure on the rental housing market is currently increasing “enormously”. On average, asking rents in Germany rose by almost six percent last year alone, and by more than ten percent in some regions. “This trend will continue in 2023, because the demand for affordable housing is unbroken,” predicted Weber-Moritz.

Against this background, the German Tenants’ Association continues to press for a ban on evicting tenants with payment difficulties. Such a regulation existed at the beginning of the corona pandemic. A termination moratorium is “urgently needed”, but has not yet been implemented by the traffic light, the federal director of the tenants’ association complained.

Justice Department plans to present draft law “soon”.

The tenants’ association also criticizes the Federal Minister of Justice, Marco Buschmann (FDP), who is responsible for tenancy law. “Unfortunately, nothing is moving in terms of rent policy,” said Weber-Moritz. So far, the Federal Minister of Justice has not reacted to the increasing proportion of index leases in larger cities due to high inflation. The Federal Ministry of Justice has still not submitted any draft legislation on the agreements already reached from the coalition agreement.

Federal Director Weber-Moritz demanded: “In 2023, as agreed, tenancy law must finally be tackled from the traffic light so as not to further fuel the rent explosion.”

In the coalition agreement, the traffic light had agreed to extend the rental price brake until 2029, to lower the cap on rent increases to eleven percent in three years in tight housing markets and to strengthen the qualified rent index.

At the request of the Handelsblatt, the Federal Ministry of Justice (BMJ) announced that it was working “with vigour” on the implementation of these tenancy law projects. A corresponding draft law will be presented “soon”.

With a view to the index rents, which confront tenants with sharp increases in rents due to high inflation, Justice Minister Buschmann recently expressed doubts as to whether “immediate legislative intervention” was justified. Nothing has changed about that, the BMJ has now announced.

More: Nothing is progressing on Germany’s construction sites – “We can no longer work like this”

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