Residential houses in Berlin
Photo: Christoph Soeder / dpa
It was a good 100 years ago that industrialized Germany experienced its first major economic crisis.
The war years and the rampant Spanish flu were followed by hyperinflation, which led to massive economic upheavals.
At that time, however, there were also winners in the crisis: Owners of land benefited from the stable value of the real estate and the simultaneous devaluation of the debts they had taken on: with the introduction of the Reichsmark and the conversion of all assets and credits from the paper mark to the Reichsmark at a rate of one one trillion the liabilities vanished into thin air.
At that time, it was agreed that the winners of the crisis would share the costs with the house interest tax.
That should also be thought about today.
To the author
Kay Nietfeld / dpa
(40) is head of the Economic Policy Department at the German Institute for Economic Research (DIW Berlin).
In addition to analyzing economic developments, he conducts research on real estate markets and housing market policy.
A century later, it is also the landowners who have so far been largely spared from the severe economic crisis, although it is quiet in German city centers, a carefree shopping spree or a visit to a café are not possible and offices are not very busy.
What for some people is still a pleasant break from the usual hectic pace becomes a nerve-wracking matter for most and a health or economic threat to their existence for not a few: the latter is particularly acute for those who live from walk-in customers and social contacts.
Areas such as gastronomy, retail, services for companies or art and culture are particularly used by the measures to combat the corona pandemic.
The income breaks almost completely away - even in the summer months of last year, when the number of infections was low, only part of the usual sales were made.
more on the subject
Icon: Spiegel PlusIcon: Interview with Spiegel PlusChef of the Deutsche Wohnen Group: “Then we'll have to reclaim the rent” An interview by Anne Seith
If business is bad, wages will fall for many employees.
Many have short-time working, some even face dismissal.
The company's profits also decline - the capital employed earns less interest - because operating costs cannot be reduced to the same extent as sales decline.
In retail, gastronomy and services in particular, rents for business premises and shops make up the largest proportion of fixed costs.
The decisive criteria for pricing are: location, location, location.
There is no other production factor like this.
In prime locations, rents have multiplied in recent years: For example, the rent of Berlin shops has doubled within ten years - some of the office space has been thrown back on the market for two or three times the rent.
All of this was under the assumption that business was flourishing.
The underlying rental contracts were usually concluded for years by mutual agreement.
The corona crisis has made these business plans obsolete, at least in the short term.
The location no longer has any economic value.
Nevertheless, most of the rent payments are made on time and in full.
Real estate prices are rising almost unchecked.
An important reason for this is an extremely expansionary monetary and financial policy, which limits the decline in household incomes and relieves companies, especially with fixed costs.
On the other hand, there is no profit equalization: the equity is consumed piece by piece.
Real estate owners ultimately benefit from the state helping out elsewhere.
However, it is difficult to accept that the soil factor is largely kept free from the consequences of the crisis.
Real estate assets are distributed extremely unevenly in Germany, making the crisis good business for the top ten percent.
They own large parts of German city centers, the rows of shops and commercial spaces.
There are reports that large landlords of commercial space forego part of the rent in the second lockdown - for example the CEC group of the Otto family.
The numerous court cases and the judgments that have now been made suggest that this is not the rule.
The question of whether the business closings represent a defect in the rental property, whether the business basis was disrupted by the conditions or has ceased to exist and whether this justifies a reduction in the rent is disputed.
The rulings on this are mostly on the side of the landlords.
Business closings are not a material defect and only a temporary loss, ruled the district court in Heidelberg, for example, and sees the risk of using the rented space solely on the side of the traders.
In December, the Bundestag reacted to this and explicitly took into account that such closures disrupt the basis of business.
That’s a good thing.
However, it is disputed among lawyers whether state aid can still be a reason for demanding full rent payments.
more on the subject
Icon: Spiegel PlusIcon: Spiegel PlusLuxury real estate boom during the pandemic: My home is my castleBy Isabella Reichert
There is therefore much to be said for the owners to participate in the financing of the crisis burden at least retrospectively.
Like a commercial enterprise, the soil factor is also subject to economic risks.
It seems unacceptable that these risks are completely localized elsewhere.
At the same time, this means that a small part of society can keep a large part of its assets harmless and even benefit from increases in value.
The idea of a moderate rent tax like in the 1920s is charming in this regard.
Because it does not tax the substance, but the income from the land - depending on the amount of the income.
If the lessor and the tenant have already agreed on a reduction in rent, this automatically leads to a lower tax burden.
It is also conceivable to reward those who showed solidarity during the crisis and reduced rents.
Your waiver could be offset against the tax payable as a loss carryforward.
Either way: Anyone who built up real estate assets before the crisis is hardly worse off after the crisis - in many cases even better.
Taxation would hardly change that afterwards.
Rather, it would be a burden sharing that also shares the hitherto golden ground in the crisis costs.
Icon: The mirror