Cheaper rents to defeat Merkel’s CDU

The grand coalition (the conservatives of the CDU and the Social Democrats of the SPD) chaired by Angela Merkel last week took stock of the “housing offensive” that she presented at the beginning of the legislature, in 2018. It was proposed to facilitate the construction of 1.5 million new apartments, and it seems that it will not reach the goal. In a country where almost half of the population is tenants (the highest percentage in the European Union), the price of rents is of particular concern, which has continued to rise in the seven large German cities since the start of the legislature (between 4% and 11%). And that is where the Social Democrats begin to set the agenda against Merkel’s party. The parliamentary group has announced that it wants to replicate throughout the country the controversial rent ceiling that the capital has applied for a year.

The measure, which has been contested in the courts because it is in doubt that a federal state has the powers to approve it, sets maximum rental prices based on the year the building was built and the improvements or reforms that the apartment has. And freezes them for five years. When the Berlin ruling coalition of social democrats, ecologists and post-communists approved the rule, the CDU opposed it, like the rest of the opposition. The SPD will wait to know the decision of the courts before flagging the Berlin rent ceiling, assures its rental expert, Johannes Fechner, but while it is fixing positions. Other proposals will be to build 100,000 social housing units a year and expand the so-called “rent brake”, which now applies only in stressed areas and limits the increases of new contracts to a maximum of 10% of the average rent of the neighborhood in which the house is located.

Other statements by Anton Hofreiter, the leader of the Greens in the Bundestag, saying that single-family houses consume a lot of space and are not very sustainable, have provoked a barrage of criticism from the rest of the parties. The politician reflected in an interview in The mirror on the fact that housing is scarce in cities and expensive for the average wage earner, while in rural areas there are more and more empty properties. The tabloid newspaper image, the most widely read in the country, published the headline: “The Greens want to ban new single-family homes.” That was not what Hofreiter was proposing, but spokesmen for the CSU, the SPD and the liberals launched into accusing the leader of Los Verdes of populism, of wanting to restrict the freedom of citizens and of having “a disturbed relationship with property.” . Hyperbolic reactions that show the sensitivity of the housing issue. And perhaps also that the parties have entered pre-electoral mode and take advantage of any slip to attack the formation that right now is the second in voting intention.

Experts such as Harald Simons, an economist at the University of Leipizig specializing in the real estate market, warn of the consequences of some price control measures, such as the Berlin rent cap. “Prices have fallen in the affected properties, but the supply has contracted so much that it is impossible to find apartments on the market. There is no market anymore, ”he explains. Given the uncertainty of the judicial decision, which is not expected for two or three months, the owners are selling or keeping the apartments empty. Simons affirms that legal certainty is needed in any housing policy that wants to start. In his opinion, the biggest problem is the lack of building land and construction, which is slow and expensive in Germany. It will be the great battle of the next few years, he assures.

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