New alliance calling for six-year nationwide rent freeze - REFIRE

Despite the uncertainty about the legitimacy of the Berliner Mietendeckel, which has capped residential rents for the next five years, forces across Germany are marshalling to impose a similar rent freeze on properties in the country's bigger cities along the lines of the Berlin model.

Grand coalition partners, the left-of-centre SPD have clarified their demands in the run-up to this year's federal elections. They want a further tightening of the Mietpreisbremse, or rent brake, that limits rent increases in German cities where rental demand is high. Furthermore, they demand 100,000 more social housing units be built annually, and an ending of the "share-deal" loophole, whereby corporate entities can avoid the Grunderwerbsteuer, or property transfer tax, which individuals cannot avoid paying when buying property. Depending on federal state, this can be as high as 6.5% - an insurmountable additional cost on purchasing property for many people.

In parallel with the SPD's brushing-down of its new housing manifesto, across the country tenants and social associations are mobilising for a renewed offensive on the housing status quo, which is leading to heightened social tensions.

A new alliance of the German Tenants' Association, the German Trade Union Federation DGB, the Joint Welfare Association (Paritätischer Wohlfahrtsverband) and tenants' initiatives from major cities is demanding that politicians impose a "rent freeze for the residential housing stock for six years. The Berlin reasoning should apply across the country, they believe, while the COVID pandemic additionally means people need a "breathing space". Otherwise, Germany is threatened with considerable social upheaval, they warn.

Lukas Siebenkotten, president of the tenants' association DMB, justifies the push among reasons with the "failure" of the federal government to succeed with its widely-heralded "housing offensive". In fact, not nearly enough new affordable housing has been built, with hardly any social housing, he claims. The Baukindergeld (child subsidy) incentive was only helping those who already had enough, and didn't need it. As a result, rents continued to rise, by an average of 3% a year. Now only "drastic measures" like the rent freeze for six years could help, he said.

The new alliance's proposals envisage exceptions for new construction - as in Berlin - and for "fair landlords" whose rents are below 80% of the local comparable rent. These would then be permitted increases of 2% annually.

Tenant initiatives from Berlin ("23 Houses say No"), Munich ("Ausspekuliert München") and Cologne ("Recht auf Stadt") report rent increases of 100% in ten years, investor speculation with conversion to condominium (and hence unavailable for rent), and rising eviction figures. Ulrich Schneider, veteran spokesman for the Gesamtverband Der Paritätische said the "entire body of social work" was being cruelly burdened by housing shortages and displacement of tenants through higher rents, with younger and older people and single parents being torn from their established social networks.

Florian Moritz of the DGB described the situation as a 'social emergency', and stressed how hard-fought-for wage improvements were being eaten up by rent increases, while many people in short-time work (Kurzarbeit) due to the pandemic are increasingly "afraid for their homes."

The new alliance partners agree that only a "lockdown" on rents could defuse social dangers, and they are demanding that the government tackle the problem head on before the end of this legislative period and new elections in the autumn. Meanwhile, major public protest demonstrations are being planned - and will take to the streets once the lockdown is lifted.

Siebenkotten of the tenants association DMB has been garnering support at EU level for his organisation's goals of a nationwide rent freeze and better protection for tenants. He says it's "high-time for a supranational initiative to tackle the shortage of affordable housing." The European Parliament is indeed looking at ways of enforcing by law the provision of affordable housing in its member states.

"Affordable", as defined by the EU, is where the rental burden is below 40% of the household income. A quarter of European tenants who are paying a market rent are already exceeding this level in their monthly outgoings, while average rents were rising remorselessly.

Another factor helping to push up rents is the steady growth of short-term accomodation such as Airbnb, which is successively removing available rental properties from the local market and fuelling price rises, as well as lowering the quality of local life. With firms such as Airbnb in its crosshairs, the EU is preparing to legislate for a 'more restrictive framework for temporary rentals'.

Siebenkotten of the DMB said he was expecting first concrete proposals at the upcoming EU Summit meeting in May, followed by the EU Housing Minister's conference in October this year.

In Berlin, where the city has now been living for a year with the 'Mietendeckel' or rent freeze, the effects are becoming more visible by the day. In the absence of a comprehensive strategy of new building by the ruling red-red-green Senate, the economic inevitability of the rent freeze has been playing out - a reduction of 70% of apartments offered for rent, widespread postponement of maintenance and renovation works by landlords, and a heightened willingness of landlords to sell their apartments to other owner-occupiers, thus removing lettable housing stock. The illusion of lower rents, as granted to tenants in pre-2014 properties, may turn out to be just that - an illusion - should Germany's Constitutional Court overturn the Berlin rental freeze later this year, compelling beneficiaries to repay the rent reductions withheld since the measure was introduced. Chaos looms, and a feeding frenzy for the city’s lawyers, should that happen.

Back in German national politics, both the Greens and the hard-left Die Linke are also raising the stakes in their demands for more tenant protection, particularly in respect of landlord termination of their leases. The Greens want new protective measures for vulnerable tenants in maintaining their right to stay even if the landlord makes a (legitimate) claim that the apartment is needed for a family member, while Die Linke want such lifelong protection for all over-70s.

Landlords and owners associations are naturally doing all they can to counter these measures and are likewise launching lobby initiatives to prevent politicians 'selling them out' before the upcoming elections. The issue of housing will be very much to the fore in the upcoming election campaigning.