Debate about fuel prices: Germany rents poorly

German politics is in turmoil. Because of the high fuel prices. Experts fear that the price of a liter of fuel could climb to over 3 euros. Calls for a fuel price cap have long been loud. On Tuesday morning the Spiegel headlined “Germany is fueling itself poor”. On Tuesday afternoon, Chancellor Friedrich Merz announced relief, and even CSU leader Markus Söder is ready to consider an excess profits tax.

This rush to action is astonishing. Or even shake your head.

Because Germany rents much more poorly than it fuels poorly. High rents in this country are the central driver of the real loss of wealth that has been going on for decades and of constantly growing wealth inequality.

According to a calculation by the Ifo Institute last year, new contract rents in the major cities of Berlin, Hamburg, Munich, Cologne, Frankfurt am Main, Stuttgart and Düsseldorf have increased by 75 percent since 2013 - in other words, in places where rents were already high back then. In the cities examined, lower-income households or singles now have to spend almost half of their income on rent.

However, high rents and real estate prices are no longer just a problem in large cities, but also in rural areas. An analysis by the Federal Ministry of Construction based on Lower Saxony shows that asking rents in rural areas have also increased by over 10 percent since 2021. Affordable rents are by no means a clientele policy for city dwellers.

The taz is an independent, left-wing and opinionated daily newspaper. We have been arguing in our comments, essays and debate texts since the taz was founded in 1979. We often cannot and do not want to agree on an opinion. That's why there are sometimes completely opposing positions here - all part of the very broad, left-wing spectrum of opinions.

Especially since a catastrophe for society as a whole is looming. Because Germany is a tenant country, and the trend is increasing. More than half of Germans have to pay rent, and the home ownership rate is at a historic low of 43.5 percent, as a study by the Pestel Institute published on Monday showed. Germany, the EU's largest economy, is therefore the member state with the highest rental rate. Almost 75 percent of 25 to 45 year olds live in rent.

A high rental rate also drives up rental prices. For several reasons: those who have to pay high rents are more willing to buy, the demand for properties to buy increases and with it the prices, which means that the opportunity for many people to buy something decreases, so they remain forced to pay high rents. At the same time, higher purchase prices can be charged for properties that can generate high rents. And anyone who then pays a high purchase price for an apartment that they want to rent out will in turn demand high rents to make it profitable.

So all of this increases rents. Which in turn makes it difficult or impossible for people to save equity to buy a property or to save something for old age. But the pension level in this country is not sufficient for high rent payments in old age. Poverty in old age is already a major problem today, but it will increase immeasurably for future generations if politicians do not get the rent problem under control.

Sure, high gas prices are bad for the economy and drive up the prices of everything. But so are high rents. They are accompanied by high commercial rents, which are passed on to the prices. They make starting a business riskier. The job market is slowing down because people can no longer move. And they have less money available, meaning other business areas can earn less. The recently published report by the tenants' association showed that many tenants now even have to save on essentials, such as healthy food or healthcare costs - a disastrous development.

So why not a nationwide rent cap, similar to the fuel discount? Why no tax relief or relief payments for renters at new prices? No excess profits tax for landlords who collect more than the rent cap would provide?

Looking at the debate about high gasoline prices, it becomes clear that politicians could do a lot if they only wanted to.