Housing summit by the Tenants' Association and DGB: Could rent regulation help the economy?

Melanie Weber-Moritz, President of the German Tenants' Association, dares to take a look at Spain right at the beginning of the housing summit. She remembers the 87-year-old pensioner Maricarmen, who died two weeks after her eviction. Her case sparked huge protests in the country. “Maricarmen is not an isolated case,” says Weber-Moritz, adding that forced evictions take place every day in Germany. According to a new survey, an overwhelming majority of tenants in large cities also support stricter rent control measures - even regardless of party preference. Nevertheless, given the size of the housing shortage, very little is happening at the federal policy level.

The housing summit organized by the Tenants' Association and the German Federation of Trade Unions took place on Thursday in Berlin. So in the city that is currently struggling to see whether it can form a red-red-green government. A sticking point in the explorations concerns the question of whether large profit-oriented housing groups can be socialized. A majority of Berliners support this. Nevertheless, the black-red federal government is trying to prevent these plans through a new federal law out of fear of communism.

After all, the invited SPD member of the Bundestag, Hakan Demir, said: “Our Basic Law is not communist.” However, the Federal Minister of Justice Stefanie Hubig speaks out clearly against socialization: It costs a lot but brings little. Nevertheless, she admits, the planned anti-corporation law is “constitutionally non-trivial”.

Economist Sebastian Dullien from the Institute for Macroeconomics and Business Cycle Research (IMK) calls for objective discussions about socialization. It could very well slow down the rise in rent prices and be a “complementary element of housing policy”. Dullien observes a gap between “published expert opinion and what the population believes” when it comes to rent issues. He argues that state rent regulation also makes economic sense. One problem is that many economists learn the opposite during their studies. It is often argued that regulation leads to lower supply because then no one will invest in housing. The private sector in particular builds, if at all, primarily high-priced apartments.

According to Dullien, the housing market generally does not work like other markets. Excessive rents exacerbate labor shortages, increase commuting times, weaken the economy “because there is no money left to go to the bar,” and fuel inequality in wealth and income. In addition to rent regulations, there must therefore be more public housing construction. In the current situation, he calls the currently planned cut in housing benefit “a mess.”

Federal Justice Minister Stefanie Hubig (SPD) regrets the plans to cut housing benefits, but is sticking to them. The cut affects many pensioners, single parents and children. It has currently launched a tenancy law reform that aims to regulate furnished living, short-term rentals and index rents more strictly. Protection against dismissal should also be improved.

According to Hubig, a commission “in which two worlds collide” is currently dealing with the question of how better action can be taken against rent usury and whether violations of the rent cap should be sanctioned in the future. Hubig is hoping for good compromises. The results should be available at the end of the year and then promptly passed into law. In the subsequent discussion among specialist politicians from the CDU, SPD, Left and Greens, CDU politician Jan-Marco Luczak in particular had a difficult time, as he seemed to have more compassion for landlords than for tenants. It was difficult for him to convey to the audience why illegally high rents should not be punished.