Franz schellhorn: ways to the rent brake

The housing situation in many German cities and metropolitan areas is strained. Particularly in large cities such as Berlin and Hamburg, rents are rising continuously. This development poses a major challenge, especially for people with low or medium incomes.

To counteract this development, the rent brake was introduced. In practice, however, this is not always effective. Franz Schellhorn, director of Agenda Austria, has looked into this issue and presents various ways to curb rent increases.

It focuses primarily on instruments such as the expansion of social housing or the promotion of cooperative housing projects. However, the introduction of transparent rent exchanges or a further development of existing rent brake models can also help to break the price spiral on the German housing market.

The rent brake: How to curb the rise in rents?

The Mietpreisbremse is a controversial measure to limit rent increases for new leases. Economist Franz Schellhorn has studied the issue in depth and calls for a realignment of rental policy. In his opinion, the focus should be on new construction of affordable housing to increase supply and promote competition among landlords.

However, the Mietpreisbremse is not the only way to curb the rise in rents. Another option is a rent cap based on the local comparative rent. This variant has already been successfully implemented in some cities. However, there is also criticism of this model, as it could potentially lead to landlords no longer renovating their apartments in order not to have to pass the costs on to the tenants.

Another starting point is the promotion of housing cooperatives and communal apartments. These forms of housing construction have shown in the past that they can lead to stable rents and a high quality of living. However, they often need government support to remain competitive and enable the construction of affordable housing.

• The rent control cap is a controversial measure to limit rent growth for new rentals.
• A focus on new construction of affordable housing is an effective way to increase supply and promote competition among landlords.
• A rent cap based on the local comparable rent can also be an effective measure, but must be used with caution.
• Promoting housing cooperatives and community housing can create affordable housing and ensure a high quality of living.

Housing shortage in Germany: How to solve it?

Germany is in a tight housing situation. Lack of affordable housing is one of the biggest social challenges in Germany. There is an urgent need to create new housing to address the housing shortage and curb rents.

To create new housing, policymakers must ensure rapid and effective action. To this end, bureaucratic obstacles and building regulations that make housing construction more expensive and delay it should be removed.

• The construction of modular housing and prefabricated houses should be facilitated to speed up construction and save costs.
• Promoting energy-efficient housing to reduce energy consumption and thus lower housing costs for residents.
• Using vacant land for housing in cities and metropolitan areas.
• Strengthening social housing in all states to provide affordable housing for lower-income households.

New housing is a step in the right direction to address the housing shortage. Together with a stable rent brake that obliges private property owners to moderate rents, rental costs in Germany can become more affordable in the coming years.

Vacant housing in the city: an urgent task to break the rent barrier

Tackling vacancies in urban areas is one of the most important tasks to lower rents. Vacant apartments and buildings in inner cities are an indicator of speculation and lack of regulation in the housing market. Vacancies cause prices to rise and housing availability to deteriorate. In Germany, many cities have vacancy rates between 5% and 10%, the assumption that there is no affordable housing is often wrong.

Several measures need to be taken to combat vacancies. One option is to convert vacant buildings into affordable housing. Promoting social housing near vacant buildings is also a sensible approach. Another solution would be to require owners to rent or sell vacant buildings.

In addition, private initiatives and cooperatives can help rent vacancies for a fee and use them as living space. Using vacant buildings for offices and businesses can also help improve the availability of affordable housing in the city.

• Conclusion: vacancy rates in urban areas are an urgent task in combating rising rents. Converting vacancies into housing, promoting social housing and obliging owners to rent or sell vacant buildings are possible solutions.

Need for reform in the Condominium Act

The German Condominium Act (Wohnungseigentumsgesetz, WEG) has been reformed only slightly since its creation in 1951. However, the growing number of condominium associations and the increasing complexity of real estate financing require a realignment of the law. In particular, the issue of housing maintenance and repair, as well as the financing of these measures, requires legislative change.

However, an important point in the discussion about rental prices is also the issue of home ownership. Many apartments are in the hands of investors and investors who are primarily looking for a return on their investment. This often leads to neglect of maintenance costs, which has a negative impact on housing quality. A reform of the WEG could create new incentives to promote the long-term preservation of the value of apartments.

Experts like Franz Schellhorn are therefore calling for a fundamental revision of the WEG. This also involves the issue of community rules, which often leads to disputes in owners’ associations. A clearer definition of the rights and obligations of each owner would ease the burden here and at the same time ensure the strengthening of the community.

• In summary: a reform of the WEG could help to achieve a higher quality of living and a broader distribution of property in the long term.
• Another point in the discussion about rising rents is alternative forms of living such as co-living. A reform of the WEG could create new incentives here to establish these forms of housing more strongly in Germany, too, and thus put the brakes on rental prices.

Exploiting the opportunities of digitization

Digitization also opens up numerous opportunities in the real estate sector. For example, smart home solutions can be used to increase the energy efficiency of apartments. This not only reduces ancillary costs, but also CO2 emissions. Rental and management of apartments can also be made more efficient through the use of digital tools. For example, viewings can be conducted via video conference and contracts can be signed digitally.

Digitization also provides the opportunity to better analyze data and thus monitor the housing market more closely. In this way, for example, rent increases could also be identified at an early stage and appropriate measures taken. In addition, vacancies could be avoided and the procurement of apartments facilitated by better networking between apartment seekers and landlords.

However, it is important that digitalization does not come at the expense of tenants. Fair handling of data is therefore necessary. In addition, digital solutions should only ever be used in a supportive manner and should not lead to complete automation of the real estate industry. Ultimately, however, it is also up to policymakers to shape digitization in the interests of tenants and create appropriate framework conditions.

• Digitization offers opportunities for energy savings and more efficient leasing& Management
• Data analysis could identify rent increases at an early stage and make it easier to broker apartments
• Fair handling of data and no complete automation necessary
• Policymakers must create framework conditions to shape digitization in the interests of tenants