Associations call for reforms to rent indexes for effective rent control
The Association of German Cities, the Association of German City Statistics and the Society for Real Estate Research are pushing for reforms in the creation of rent indices. They are calling on the future government to ensure that the rent freeze can only function effectively on the basis of reliable, independent and professionally determined comparative rents.
Since a change in the law in 2022, cities with more than 50,000 inhabitants have been obliged to draw up a rent index. In many smaller municipalities, however, the rent freeze applies without a rent index being mandatory. According to a study by the Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR), a total of 347 municipalities were affected at the end of 2024 - including 106 medium-sized towns (20,000 to under 50,000 inhabitants), 173 small towns (5,000 to under 20,000 inhabitants) and 68 municipalities with fewer than 5,000 inhabitants.
"Without a rent index, the rent freeze will remain ineffective," warn the associations and appeal to the potential coalition partners CDU and SPD to make improvements here.
Nationwide rent index and more expertise required
The associations are calling for a rent index - either in simple or qualified form - to be made mandatory in all tight housing markets. In cities with over 100,000 inhabitants, only qualified rent indexes should be used, as they offer the greatest legal certainty for tenants and landlords.
A rent index determines the local comparative rent, which in turn forms the basis for the rent cap. This limits rent increases to a maximum of 10% above the average value. In their exploratory paper, the CDU and SPD had already agreed to extend the rent freeze for a further two years.
More independence and expertise in preparing rent indexes
Experts are also calling for greater independence and higher professional qualifications in the creation of rent indexes. In view of the great importance for tenants and owners as well as the methodological complexity, a mandatory certificate of expertise is required for the responsible institutes. In addition, the preparation of rent indices must be independent and free from political influence.
At present, qualified rent indices only come into force if tenants' and landlords' associations agree to them or if the municipality decides on them instead. According to the associations, this dependency jeopardizes objectivity and opens up scope for political influence.
Source: IZ online, March 13, 2025
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