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German homeowners urge rent control exemption for private landlords

Giving his first government statement to parliament on Wednesday, Chancellor Friedrich Merz (CDU) has a pithy summary of his housing strategy: "Build, build, build." But while the new black-red coalition is pinning its hopes on building its way out of the housing crisis, it also wants to tackle the steep rise in rents across the country. "Tenants must be effectively protected from being overburdened by ever higher rents," the CDU, CSU and SPD state in their pact. In concrete terms, this involves extending Germany's Mietpreisbremse (rental brake) until 2029 and clamping down on landlords who try and avoid it. For property owners' association Haus und Grund, however, these regulations go much too far. Around 60 percent of Germany's homes are let by private landlords, they say - and many of them are overburdened and overwhelmed. "The limits of affordability for private landlords have been exceeded," association president Kai Warnecke told Spiegel . "Unlike housing groups, private individuals cannot compensate for the massive increase in letting costs in any other way or pass them on." READ ALSO: Which German cities are the most in need of new housing? Private individuals who rent out their homes often want to have a fair and equitable relationship with their tenants, the Haus und Grund lobbyist argued. Advertisement "This must finally be recognised by politicians," he said. Specifically, the association is calling for small and private landlords to be exempted from any further rent controls or tenant protections. That includes the four-year extension of the rent brake, which caps rents at no more than 10 percent of local market rates and prohibits increases of more than 20 percent over three years (or 15 percent in tight housing areas). It also includes stricter rules around passing the cost of property modernisations onto tenants, and restrictions on inflation-linked rents, known as Indexmiete in German. Advertisement Tenant satisfaction? Bolstering his argument, Warnecke pointed to a recent survey carried out by research company Civey that showed high levels of satisfaction among private tenants. While 65 percent of the tenants said they were happy with their landlord, this rose to 73 percent for tenants renting from private landlords. If regulations are too stringent, small property owners could feel driven out of the market, Warnecke said. "This encourages the sell-off of flats to property speculators and further exacerbates the situation," he added. Kai Warnecke, president of the Haus und Grund homeowners' association. Photo: picture alliance/dpa | Uli Deck However, housing activists say the planned protections for tenants don't go far enough, pointing to the fact that rents are still rising steeply across the country. Last year, metropolitan hubs like Berlin, Essen and Frankfurt saw hikes of around eight percent per year respectively, with prices soaring for new tenants on the market in particular. READ ALSO: Just one in four Berlin apartments is affordable on an average income Recent data from Eurostat suggests that renters in Germany spend far more of their income on housing than in other countries. The average household spent almost a quarter (24.5 percent) of their earnings on housing last year, rising to 43.8 percent for households at risk of poverty. A few weeks ago, in an interview with the regional Weser Report , Haus und Grund had described reports of inaffordable rents as "fake news".