Tenancy Law / Politics

Protection against rent explosion and termination for personal use

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Problem

Again and again, politicians and tenants' associations call for better protection against rent increases and terminations for personal use. This may serve as an example

  • the request to BT pressure. 19/10283 of 16.05.2019/XNUMX/XNUMX by MPs from the DIE LINKE party. It says: “Older people are particularly affected by the explosion in rents and homelessness. In the meantime, there is already talk of a “gray housing shortage”. Due to the often low pension, which does not keep pace with the rise in rents, many older tenants hardly have the opportunity to pay their rents. Finding a new, affordable apartment is almost hopeless in many cities. Having to move at an advanced age is a particular social hardship from which tenants must be better protected. The most common reason for termination is the landlord's own needs. According to court statistics from the German Tenants’ Association, at least 13.389 cases were heard in court in 2017, more than 500 cases more than in the previous year.”
  • the request to BT pressure. 19/10284 of 16.05.2019/XNUMX/XNUMX by MPs from the DIE LINKE party. It says: “In Germany, tenants are inadequately protected against the termination of the residential lease and the loss of their apartment. Many court decisions have also undermined protection against dismissal. ... Many tenants are also forced out of their apartments as a result of evictions for their own use. It is often sufficient for the landlord to need the apartment for an au pair, as a second home or as a place to work. Above all, older tenants who have been rooted in the area for many years must be better protected against this particular social hardship.”
  • the request to BT pressure. 19/20542 of 30.06.2020/XNUMX/XNUMX by members of the BÜNDNIS 90/DIE GRÜNEN party. It says: “Tenants in Germany are already under increasing pressure. Their burdens are increasing as a result of moving to the cities, the consequences of the financial crisis and sharply increased investments in living space and dwindling social housing. In case law, several judgments have recently brought relief for landlords, especially with regard to terminations for personal use. According to this, it may already be sufficient for the assumption of a justified notice of termination for personal use if the landlord states that he wants to use the apartment as a second home or that he needs the apartment for his au pair. The interests of the tenants are almost always secondary, although their right to the apartment also has constitutional status. This urgently needs to be changed. Protection against evictions is therefore an essential aspect of the urgently needed change in tenancy law in favor of tenants.”

Various legal changes have recently been made with the aim of reducing rent increases and preventing terminations for personal use:

At the same time, some politicians are calling for further tightening: even lower modernization levies, even lower rent increases or no rent increases at all, a ban on evictions for personal use as far as possible, and the landlord should no longer be able to demand that tenants reimburse the costs of management in the future, for example the CO2 levy .

The two goals of "protecting tenants from evictions for personal use" on the one hand and "limiting the landlord's rental income and increasing his share of the house costs" on the other hand, clash. If it is not worth renting out, and the landlord may even pay more, the landlord will want to use it himself or sell it to someone who wants to use it himself.

In order to still achieve both goals, politicians have sparked the above intervention spiral and, in my opinion, are increasingly destroying the housing market. Newspaper reports that someone looking for an apartment can't find anything are increasing, currently Kevin Kühnert, who publicly complains about the results of his own politics.

Solution

I have a suggestion. One that doesn't harm anyone. It doesn't demand anything from landlords, it doesn't restrict the right to terminate for personal use and it doesn't lead to higher or lower rents. My proposal not only provides permanent and final protection against rent increases, but it even leads to falling housing costs without the landlord's income shrinking. At the same time, it provides final protection against evictions for personal use and any other form of evictions, without exception. In addition, my proposal prevents poverty in old age.

I didn't come up with this solution myself, it comes from the BR prints. 75/51 of 26.01.1951/XNUMX/XNUMX. At that time, the legislator wanted to enable the population to live at the lowest possible cost. Poverty in old age due to high rents should be avoided. The legislator also wanted to protect the population from any conceivable termination of their living space.

So the WEG was created. Since 1951, people have had the opportunity to buy not only whole plots of land and houses, but also a single apartment. This protects you equally from rent increases, from losing your home through termination and from poverty in old age. This opportunity still exists today for anyone who can afford it.

And therein lies the problem: hardly anyone can afford it today. The reason for this, however, lies solely in politics, ie it would be by a simple political decision to fix:

  • First of all, high real estate transfer taxes are associated with the purchase. If you want to buy a 500.000 or 3-room apartment in Berlin for 4 euros, you have to pay 6% tax, which is 30.000 euros. That is too much for many young families. my Suggestion #1 is therefore: Abolish the real estate transfer tax for the purchase of an owner-occupied apartment.
  • Secondly, the banks do not finance the current market values, but approach the matter cautiously and also require equity capital. Therefore, around 20% of the purchase price is required for this. For an apartment for 500.000 euros, that is another 100.000 euros in addition to the tax. Instead of paying people permanent housing allowances, the state could help with a default guarantee. my Suggestion #2 is therefore: to provide the bank with a free state default guarantee for 20% of the purchase price for the purchase of an owner-occupied apartment. This can be secured in the land register as a secondary priority and ideally costs the state little or no money, because it is usually namely, there are no defaults and they would otherwise be secured. The guarantee allows the banks to finance 100% but only have 80% risk. This means that even people who do not have 100.000 euros in their bank account can buy an apartment. In times of (too) high interest rates, this could be supplemented via the KfW with an interest rate reduction for the loan, so that people pay more for the repayment and not so much for the interest.
  • Thirdly, people must also be able to buy the apartment in which they live. For this it is necessary that the apartment a) legally exists as an apartment and b) the owner is willing to sell it.
    • The former can be achieved by promoting, not prohibiting, transformations. Where the state is the owner itself, it can decide to subdivide its houses and offer them for sale to the residents at a reasonable price. In berlin are around 323.000 state-owned apartments – why do they have to belong to the country and not to its inhabitants?
    • The second can be created through incentives where the state is not the owner. Private owners could be granted tax breaks when selling to residents, such as tax exemption for capital gains before the end of 10 years. This would provide an incentive for a sale to the current tenants and would certainly result in many sales taking place to them. The new building would certainly benefit from this.
    • From this follows mine Suggestion No. 3: Lift all conversion bans and promote conversions and sales to tenants for tax purposes, divide up state-owned housing stocks and offer them to residents for sale at low prices.

In my opinion, a larger program for old-age security, wealth accumulation for the population and protection against dismissal of living space is hardly conceivable, and the best thing is: it costs the state almost nothing. He just has to do it. It is true that the federal states no longer receive income from property transfer taxes. In return, however, the need for housing cost assistance or supplementary social assistance to those in need, namely retirees, is permanently and increasingly reduced. The courts would also be relieved of rent increase and personal needs processes, the district offices could save on personnel costs in the conversion and misappropriation departments, bailiffs would have to carry out fewer evictions, the hardships addressed by politicians would suddenly decrease and continue to dwindle over time.