The German government is proposing to bring in a three-year, nationwide rent freeze, in the hope it will reign in the country’s housing crisis. Landlords would still be allowed to raise rents, but there would be stricter rules about how much more they could charge and where.
“Renters need a breather, we need a rent cap for the next three years,” deputy parliamentary group leader for the SPD Verena Hubertz said in an interview published by Bild over the weekend. Facing the worst housing shortage in 20 years, rents in Germany have recently skyrocketed, particularly in German cities.
According to the SPD’s new rent cap policy, the conditions under which landlords can raise rents will be regulated more stringently. At the moment, landlords in Germany can raise rents by a maximum of 20 percent over a three-year period, and by a maximum of 15 percent over a three-year period in regions and cities where the rental market is particularly fraught.
Under the new rules, landlords letting in areas where the housing market is tight would still be able to raise rents, but only by a maximum of 6 percent over a three-year period and only until the renter is paying an amount which matches the average in their surrounding area.
The party is expected to adopt the new policies during a parliamentary retreat on August 28.
When the SPD-FDP-Green coalition agreement was signed back in December 2021, the governing parties had agreed to reduce the current 20 percent rent cap to 11 percent, but Scholz’s SPD has said that this figure is already out of date. With inflation and a housing shortage causing rental costs to spiral out of control, the party now believes that the originally agreed 11 percent cap won’t cut it anymore.
The SPD is also planning to change the rules when it comes to indexed rental contracts, contracts where rental costs can fluctuate depending on inflation rates. Under the new plans, the amount that landlords could charge for indexed rents would depend not on inflation rates but on average rental costs without utilities included, also known as “cold rents”.
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