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"A lot of shenanigans": Major landlord calls for tenancy law reform and protection for fewer apartments

2023-12-02T14:08:18.474Z

Highlights: "A lot of shenanigans": Major landlord calls for tenancy law reform and protection for fewer apartments. "We have to deal with the question of who needs protection and low rents and who pays too little compared to their capacity," emphasizes the CEO of Vonovia in an interview with the Süddeutsche Zeitung. "Only one part of the rental market needs to be protected: apartments that the craftsmen, the tram drivers or the firefighters can afford," he adds. "I am firmly convinced that only more supply of affordable apartments will really bring rents down," says the spokesman of the board of Hamburg's largest municipal housing company.



Status: 02.12.2023, 14:49 PM

By: Marcus Giebel

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According to Vonovia CEO Rolf Buch, tenancy law cannot remain as it is. He considers protection to be necessary only for certain apartments.

Hamburg – Throughout Germany, people are complaining about housing shortages. In addition, as a result of the high demand, rental prices have been washed. The largest housing developer is now calling for a rethink: In Rolf Buch's opinion, some citizens are quite capable of digging deeper into their pockets, which could ultimately benefit those who are looking for one.

Vonovia CEO Calls for Tenancy Law Reform: "Question of Justice"

"We have to deal with the question of who needs protection and low rents and who pays too little compared to their capacity. This is a question of justice," emphasizes the CEO of Vonovia in an interview with the Süddeutsche Zeitung (article behind a paywall). "So the legislator will not be able to avoid adapting the tenancy law."

Nothing less than a reform of tenancy law is therefore in mind for the Bochum-based company, which, according to its own statements, gives more than a million people a home. Buch complains that due to the rent brake in Berlin, entire apartments are being sublet at a higher price or at least rooms are being sublet at a profit.

Housing is scarce in many places: Vonovia CEO Rolf Buch calls for a rethink of tenancy law. © IMAGO / Sylvio Dittrich

Rethinking tenancy law? "Protecting the homes of craftsmen or firefighters"

There is "a lot of shenanigans being done". The Vonovia CEO speaks of an illegal and a legal black market. These are "negative consequences of too strong interventions". Therefore, the rental market must be regulated.

Basically, he thinks: "Only one part of the rental market needs to be protected: apartments that the craftsmen, the tram drivers or the firefighters can afford. Expensive apartments don't need protection."

Meanwhile, the traffic light government is aiming for a tenancy law reform that includes an extension of the rent brake as well as the lowering of the capping limit. Just recently, the real estate group LEG announced significantly rising rents in an interview with the German Press Agency (dpa).

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Rents in Germany: Expert sees chance of reduction only through greater supply

In the same interview, Thomas Krebs also suggests a rethink: "In the case of subsidized apartments, we only check once who lives there – when they move in. If someone moves into a subsidized Saga apartment as a student, they may be a well-paid doctor ten years later. In this way, affordable housing remains permanently occupied," says the spokesman of the board of Saga, the largest municipal housing company in Hamburg, describing the problem.

His proposal is therefore that after five years, tenants should voluntarily provide information about their income and the number of residents. If this is not done or if the eligibility criteria are no longer met, the rent is to be adjusted.

But Krebs is also important: "I am firmly convinced that only more supply of affordable apartments will really bring rents down."

"A lot of shenanigans": Vonovia CEO Rolf Buch criticizes the consequences of the rent brake. © IMAGO / Cord

Construction crisis in Germany: "Company death as after reunification" feared

But at the moment, at least for Vonovia, building new residential buildings is not worthwhile. Buch calculates: "5000 euros in construction costs per square metre, including land, at four percent interest – that's over 20 euros in rent. This is not affordable for a normal earner. So it doesn't make sense to build that."

According to Krebs, Saga builds 1000,90 apartments a year and would like to double that number. However, this is only possible because the company is "<> percent publicly funded".

However, he is also worried – for several reasons: "I'm afraid that we could see companies dying again in construction, as we did after German reunification. Many subcontractors are already disappearing from construction sites. In view of demographic change and the shortage of skilled workers, this could become the new bottleneck – and drive up costs further." The construction crisis will probably not end until 2025.

Doesn't expect the end of the construction crisis until 2025: Saga boss Thomas Krebs wants to limit the time limit on rent subsidies. © IMAGO / Stephan Wallocha

Residential construction in Germany: Vonovia CEO tries to compare Mercedes

Buch also sees a far-sighted light at the end of the tunnel: "At some point, money will flow from the capital market into real estate again. Then we'll build again." However, possibly under more difficult conditions.

The Vonovia CEO points to the patchwork quilt resulting from German federalism, which does not stop at the construction industry: "There are 16 state building codes – and all of them prescribe something different. That's like saying to Mercedes: But the same model has to have a different length in each state. They would stop selling cars in Germany." (mg)

Source: merkur

All news articles on 2023-12-02

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