Rent Price Reduction Advocated by Tenant Association - The cost to rent the property is less than the typical market value.
In an effort to address escalating rental prices and improve housing affordability, the German government has announced plans to extend and tighten the rental price brake (Mietpreisbremse) in major cities.
The Mietpreisbremse, implemented in cities like Hamburg, has moderately succeeded in preventing excessive rent increases but has not fully curbed rising rents, particularly in metropolitan areas with persistent housing shortages and high demand.
Currently, new rental contracts are capped at 10% above the local comparable rent, providing a legal limit on how much landlords can charge for new leases. Existing tenants are also protected, with rent increases capped at a 15% limit over three years to prevent sudden spikes. However, exemptions for newly built or extensively modernized properties allow landlords in these categories to charge market rents, somewhat limiting the brake’s overall impact.
Despite these controls, average rents in major German cities, including Hamburg, have continued to trend upwards. To address this issue, several proposals are being considered or implemented. These include extending rent control measures for another four years, introducing stricter rules on index-linked rents and furnished lettings, and further restrictions in designated tight housing markets.
The Left faction believes that a rent cap would be a real help in the fight against excessive rents. However, the rental market in Hamburg and other metropolises remains under pressure from low housing supply and strong demand, reducing the brake’s ability to fully stabilize rents.
In an attempt to circumvent the rental price brake, landlords have been found to charge additional fees for furnished apartments, with tenants paying approximately 805,000 euros too much during the observation period due to these violations. The German Bundestag has extended the rental price brake until 2029.
According to a recent evaluation by the Tenant Association, violations against the rental price brake were found in 93% of 2,361 inquiries during consultation sessions between December 2022 and January 2025. The Left believes that landlords do not fear real penalties for non-compliance.
Federal Minister of Justice Stefanie Hubig (SPD) has announced plans to stop the circumvention of the rental price brake for furnished apartments. Proposed measures include cracking down on these practices and encouraging innovation in construction to increase supply, indirectly supporting rent control by easing housing shortages.
In conclusion, while the Mietpreisbremse has helped moderate the pace of rent increases in Hamburg, it has not fully prevented affordability challenges due to exemptions and ongoing housing shortages. The German government plans to extend and tighten these controls, alongside supply-side measures, to strengthen tenant protection and improve housing affordability in the coming years.
- The German government, in an effort to further strengthen tenant protection and improve housing affordability, is considering investing in vocational training programs for construction workers to increase real-estate business and vocational training in building more housing units, thereby indirectly supporting the rental price brake.
- To ensure compliance with the rental price brake and prevent landlords from circumventing the law, the Federal Minister of Justice has proposed financing penalties for non-compliance, aiming to discourage unethical business practices and provide a more equitable community policy for citizens facing affordability challenges.
