Germany's Rent Cap Faces Expiration: Surge in Berlin and Munich Rents Sparks Tenant Alarm
November 21, 2024The opposition party, Union, has expressed its refusal to support the renewal of the rental price brake, arguing that it was never intended to be a permanent measure.
The expiration of the rent cap is anticipated by the end of 2025, and the likelihood of its extension has diminished due to the political turmoil following the coalition's collapse.
The German Tenants' Association warns that the expiration of the rent cap could lead to significant rent increases in urban areas, further burdening renters.
Currently, newly built apartments and those that have undergone extensive modernization are exempt from the rent cap regulations, contributing to rising average rents.
The rental price brake, introduced in 2015, is set to expire after ten years, raising significant concerns for tenants in high-rent areas, particularly in major cities like Berlin and Munich.
There is a strong push for the rent cap to not only be extended but also strengthened, especially in light of the uncertainty surrounding its future following the recent collapse of the government coalition.
Under the current rent cap, landlords are limited to increasing rents by a maximum of 10% above the local average rent, as determined by the rent index.
Recent reports indicate that rental offers in Berlin have surged by 27%, while Munich has seen a 21% increase, signaling a deteriorating rental market that could spiral out of control without intervention.
Christian Gaebler, the Berlin Senator for Urban Development, has called for an immediate extension of the rental price brake, stressing the need for a federal law before its current expiry in May 2025.
With approximately 80% of people in Berlin renting and 53% of households nationally, the implications of the rent cap's expiration could be profound for millions of renters across Germany.
Helmut Dedy from the German Association of Cities emphasizes that the rent cap is crucial for many renters, with around 400 municipalities relying on it, and advocates for its maintenance alongside efforts to increase housing construction.
Tenant associations and affected individuals are alarmed by the potential expiration of the rent cap, highlighting its critical role in protecting renters from excessive rent hikes.
Summary based on 2 sources