Rental price Brake: Will living now finally be cheaper?

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Rental price Brake: Will living now finally be cheaper?

Katarina Barley wants to "tighten up" rental price brake. That was first headlines when Minister of Justice's plans became public by SPD. That sounded good from tenant's point of view. And aroused hopes that "tightened" price brake could finally halt rising housing costs in large cities. So what is to be kept from plans?

To speak of a "tightening up" is not entirely correct at first. What barley is trying to do is fix a bug. His predecessor, Heiko Maas, current foreign minister, is responsible for him. He introduced rental price brake – including various exceptions. One of m: landlords who have requested more before entry into force of rental price brake than are allowed afterwards, may continue to do so in case of a rerental. The landlord was refore always able to rely on fact that previous tenant had paid more and rental price brake refore did not apply. The problem: In practice, new tenants had little chance of checking this.

Barley wants to fix this. In future, landlord shall inform new tenant of amount of prelease at conclusion of contract. This is sensible and correct – but actually also a matter of course. Orwise, every landlord can rely on a supposedly higher rent and break rental price brake. Barley does not aggravate, it repairs.

Anor point in draft law relates to so-called modernisation situation. With it, landlords who renovate apartments can n increase rent to currently up to eleven percent of cost per year. Barley now wants to reduce this value to eight percent in areas with a tight housing market.

That too is true. The relocation 1974 was introduced, at that time in Federal Republic of Germany three million flats did not have a bath. The allocations should create an incentive for landlords to improve condition of ir homes. Lastly, it was mainly founded with energetic renovations that help to protect climate. In view of sharp rise in rents in large cities, it seems quite appropriate to reconfronting balance between environmental protection and affordable housing.

This article comes from time No. 31/2018. Here you can read entire output.

The design is also not badly done by craftsmen. For example, modernisations stipulate that rent will n only be allowed to rise by three euros per square metre over a period of six years. This is important because landlords could react to capping of modernization of eleven to eight percent by simply installing an even more expensive bathroom to get rent y imagined. Eight percent of 50,000 euros are still more than 11 percent of 30,000 euros. The capping to a maximum of three euros per square metre limits this possibility and sets an absolute upper limit.

What Barley wants to enforce is thought through. Neverless, she should not try to give impression that her package will solve problems in housing market. This would only lead to disappointment with those affected. To impose a rental price brake against economic mechanisms of supply and demand will continue to be hardly possible. Really would help only thousands new apartments. However, ir construction lasts and often fails due to corresponding permits.

Of course, Modernisations will also continue to lead to rising rents. This is also part of bitter truth: those who want chic, climate-friendly apartments do not get it for free.

Barleys plans consist of sensible improvements and readjustments. This is more than federal government has been accustomed to in past few years in terms of renting. But y are not big housing-political litter eir.

Date Of Update: 30 July 2018, 12:00

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