Debate about construction and housing after cabinet decision on rent controls

( – While the CDU is critical of the situation around housing construction, Federal Construction Minister Geywitz (SPD) is optimistic, especially with regard to the rent cap. The CDU-CSU parliamentary group vice-president in the German Bundestag, Lange, sees the developments as to new buildings as “still far from bottoming out”. This has an impact on those looking for housing as well as on the construction industry, he said recently, since the rent control is to be extended from 2025 to 2029, according to the will of the traffic light coalition. The politician, of the CSU, complained that only the Building Construction Statistics Act had been changed and the rent cap had been extended. There is no progress on the important projects – the amendment to the building code or building type E, he pointed out.

Geywitz countered the criticism: “In privately financed housing construction, about as much was built last year as in the previous year.” She strongly advocated for the reform. Geywitz explained that there is still “a very tight rental market in the big German cities”. However, she sees a positive development because the prices for building materials are stabilizing and the number of real estate mortgages is high. Geywitz also identified growth in social housing.

Green Party leader Lang welcomed the cabinet decision, but demanded that housing “must be affordable”. Therefore, a “rent protection offensive” is needed. A third of households are overburdened by housing costs. Green Party politician Dröge mentioned the topics of non-profit housing and rent price indexes. Regarding the latter, Federal Justice Minister Buschmann (FDP) still sees need for advice, the reason being increased construction costs.

Meanwhile, the general manager of the German Construction Industry Association, Müller, called for “temporary government funding and, in the medium term, a reduction in regulations, bureaucracy and requirements” for buildings. Housing construction is social policy, he explained. The president of the Haus und Grund owners’ association, Warnecke, emphasized that politicians must adapt the framework conditions in building construction and housing, which “must become easier and cheaper.” The potential for attic extensions and for additions needs to be better utilized and the property transfer tax needs to be reformed.

The owners’ association Haus und Grund would like to sue against the extension of the rent cap, of which the effect is that the rent in several cities for newly-made agreements may not be more than ten percent higher than the local comparable rents. Geywitz, on her part, is confident that the Ministry of Justice had “examined the rent control system in a sufficiently thorough manner”.

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