Soaring rents create a cycle of inescapable poverty
Warning Bell: skyrocketing Rents Risk Pushing Germans into Poverty
Let's get real, folks! The German Tenant Association (DMB), with a finger on the pulse of the housing market, ain't mincing words—swelling rental prices in Germany could push many into a vicious poverty spiral. "Hear this!" says DMB president Lukas Siebenkotten, "3.1 million households are spending over 40% of their income on rent, and by 2025, housing will become a poverty trap for many." Ouch, that hurts!
Siebenkotten gave the lowdown on the past decade's housing policies, calling it a "disaster" but praising baby steps taken by the new coalition government. Kudos to the decision to extend the rent cap on new leases, but the association isn't shy about voicing their concerns. They want a revamp of the exemption rule for structures built after 2014, suggesting the date be adjusted to 2023 to plug loopholes for pricier new builds.
The rent cap, you ask? It caps rent growth in tight housing markets, so that rent in new contracts doesn't go beyond the local average by more than 10%. However, there's exceptions, like new buildings first rented post 2014 and fully modernized apartments. The DMB, the parents of 15 state associations, and over 300 local tenant associations, organizes 400 delegates at the 71st German Tenant Day in Warnemünde, where they hash out around 70 proposals and pick a new president, with current head Siebenkotten stepping down due to age.
Friday's key resolution will address DMB's key demands on housing policy and tenant law. Keep an eye out for Federal Minister of Justice Stefanie Hubig (SPD) and the President of the Institute for Economic Research (DIW), Marcel Fratzscher, among the attendees in Warnemünde.
Source: ntv.de, dpa
Now, let's zoom in on what DMB really wants.
- Stricter rent controls: They applaud the government for extending rent caps until 2029, but want to do more by updating the exemption timing for new buildings from 2014 to 2023 to stop richer rents on newer constructions.
- Protecting tenants: DMB pushes for stricter rental contracts regulations, transparency on rent-related expenses, and curbs to prevent landlords from hiking ancillary costs unfairly.
- Tackling housing affordability: They highlight the sticking point that millions suffer keeping their rent bills, worrying about wandering into poverty town. They propose housing costs stay on pace with incomes and increased construction of social and affordable housing to meet demand.
- More social housing: DMB emphasizes the need for more social housing, pointing out that Germany requires over 1 million new social housing units by 2030 but yearly development lags behind.
The following are the types of aid that DMB suggests:1. Stricter rent controls to keep housing costs manageable, including updates to the exemption timing for new buildings from 2014 to 2023.2. Protections for tenants through stricter rental contracts regulations, transparency on rent-related expenses, and curbs to prevent landlords from hiking ancillary costs unfairly. Furthermore, they propose housing costs should stay on pace with income growth and increased construction of social and affordable housing to meet demand.
