The Cry from the Housing Front: Soaring Rents Threaten to Plunge People into Deprivation
Skyrocketing rental costs lead to financial struggle for many, trapping them in a cycle of poverty
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The German Tenants' Union (GTU) is ringing the alarm bell, warning that escalating rental costs in Germany could spell disaster for millions, plunging them into poverty. "Nearly half of households are shelling out between 30 to 40 percent of their income on rent, with 3.1 million households forking over even more than 40 percent," revealed GTU Chief Lukas Siebenkotten at the inauguration of the 71st GTU Convention in Rostock-Warnemünde. "By 2025, housing could become a perilous pitfall for countless individuals."
Siebenkotten lambasted the previous administration's housing policy as a disaster, yet applauded the new coalition's initial steps in the right direction. The cabinet's decision to prolong the rent control for new leases is a good move, but Siebenkotten sees room for improvement. He proposes updating the exemption rule for buildings completed after 2014—more than a decade ago. "Why not switch that around to 2023?" he suggested.
The rent control cap restricts rents in tight housing markets. In these areas, rent increases in new contracts are capped at no more than 10 percent above local benchmark rents. However, exceptions exist, such as new buildings leased out after 2014 and extensively renovated apartments. The German Tenants' Union is the parent organization of 15 state associations, with 300 local tenant unions under its umbrella. Approximately 400 delegates will attend the 71st GTU Convention in Warnemünde until Friday, where they'll debate around 70 proposals and select Siebenkotten's successor, who is retiring due to age after almost 18 years in office.
By Friday, a crucial resolution outlining the association's key demands on housing policy and tenancy law will be up for debate. Anticipated attendees in Warnemünde include Federal Minister of Justice Stefanie Hubig (SPD) and the President of the Institute for Economic Research (DIW), Marcel Fratzscher.
In the Crossfire: GTU's Demands
Overall, the German Tenants' Union's key demands regarding housing policy and tenancy law, as outlined in the forthcoming resolution, aim to tackle the mounting affordability crisis and tighten rental control regulations. Their key demands include:
- Expanding and Strengthening Nationwide Rent Caps: The union urges maintaining and fortifying nationwide rent caps, currently limiting rents in tight housing markets to no more than 10% above local benchmark rents. They recommend narrowing or abolishing exemptions, particularly suggesting to revise the exemption date for new buildings from 2014 to around 2023, thereby extending rent control protections to more new constructions[2][3].
- ** addresses Affordability and Poverty Concerns:** They underscore that a large proportion of households are spending between 30 to 40% of their income on rent, with over 3 million going beyond the 40% threshold, effectively making housing a risk factor for poverty[3]. Their demands aim at curbing rental costs from becoming an unrelenting poverty trap[3].
- Increased Social Housing Supply: The union emphasizes the urgent need for more social and affordable housing, given the vast discrepancy between the need for over 1 million new social housing units by 2030 and the current construction rates significantly lagging behind that target. This discrepancy exacerbates rental affordability issues[2].
- Stronger Enforcement and Enhanced Transparency: Beyond rent caps, they seek strengthened enforcement of existing laws and call for increased transparency in rent setting and tenant protection standards to better align landlord practices with tenant welfare[2].
Although the federal government has extended rent control measures until at least the end of 2029 and taken some steps like prolonging rent caps on new leases, the Tenants' Union finds these measures inadequate and advocates for more comprehensive reforms to tenancy law to ensure effective tenant protection[1][3][4].
In summary, the German Tenants' Union demands robust, inclusive rent control policies, modifications in exemptions, particularly for new builds, a significant boost in social housing construction to meet demand, and tighter regulatory enforcement to shield tenants from spiraling rental costs and the resulting poverty risks[2][3].
- The following are the types of aid the German Tenants' Union (GTU) is advocating for in their housing policy resolution: financial support to expand and strengthen nationwide rent caps, addressing affordability and poverty concerns through curbing rental costs, increasing social housing supply, and strengthening enforcement and transparency in rent setting and tenant protection standards.
- The German Tenants' Union's housing policy demands also include the business practice of landlords, as they aim for better alignment of these practices with tenant welfare, and they look to politics and general-news outlets for support in pushing for comprehensive reforms to tenancy law.
