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Housing market : Caps on Bonn rental prices to remain

Housing market : Caps on Bonn rental prices to remain

The NRW state government is planning a new tenant protection ordinance for July. Both the tenants' association (Mieterbund) and the landlords are equally dissatisfied.

The new tenant protection ordinance planned for 1st July is criticised by the Chairman of the Bonn Tenants' Association, Bernhard "Felix" von Grünberg, as an attempt by the black-yellow (CDU & FDP) state government to weaken important regulations for preventing further rent increases in North Rhine-Westphalia. It is true that the previous regulations in the growing city of Bonn will largely remain in place for the next five years. However, in some parts of the Rhein-Sieg district, they will be softened. “This is happening without a valid basis of data in a common housing market,” said von Grünberg.

Economist Harald Simons from the University of Applied Sciences in Leipzig prepared an expert report for Empirica AG, on behalf of the Minister of Construction Ina Scharrenbach (CDU), in which he expressed doubts about a cap on rental prices. He said that the regulations to curb prices would have hardly any effect, for example because many potential tenants accept expensive apartments without complaint. Rents have indeed risen by a quarter in the last decade. But on average, tenants in NRW still pay twelve percent less than the national average. Outside the “swarm cities” of Düsseldorf, Cologne, Bonn and Münster and their surrounding areas, the population is also tending to shrink.

The ordinance takes this finding into account to a limited extent: unlike the three previous ordinances, the new ordinance is now only to apply in 18 instead of the previous 22 or 37 municipalities in which the shortage of rented housing is particularly striking. In addition to Bonn, these include Alfter, Bornheim, Bad Honnef, Königswinter, Niederkassel, Siegburg and Wachtberg in the Rhine-Sieg district. Here the following rule still applies: When a new tenant is found, the landlord may demand a maximum of ten percent more than the comparable rent charged in the area. For existing contracts, the rent may increase by a maximum of 15 percent within three years. A figure of 20 percent applies nationwide. If a rental apartment is converted into an own-use apartment and sold, the new owner may register their own use after five years at the earliest (instead of the regular three years). In this case, expert Simons had even recommended a period of eight years to make the sale of rented apartments for own use de facto unattractive. In contrast, the Conversion Ordinance, which has already expired, is no longer applicable. This was intended to prevent the conversion of rented apartments into owner-occupied apartments, but only two municipalities had made use of it in only one neighbourhood respectively.

“Compared to the coalition agreement, which provided for the removal of the protective provisions, the big growth cities have gained the upper hand”, explained von Grünberg. Nevertheless, the draft regulation is said to be a “lazy compromise”. In an expert report for the town of Siegburg for example, the same consulting firm Empirica recently stated that there was a shortage of housing. The district lacks a reliable basis of data in the form of an official rent index. This should be compiled using the expertise from the city of Bonn in cooperation with the district, demands von Grünberg.

In a press release, Scharrenbach advised that as long as affordable housing is not available throughout the country, the new tenant protection ordinance should apply. On the other hand, the owners' association Haus & Grund complains that the state government is turning away from its coalition agreement. The expert report has proven the ineffectiveness of the caps on rental prices. If these are maintained, “ineffective measures will be continued”, said Dirk Vianden, member of the board of the Bonn city association. He sees the cap on rental prices as an unsuitable instrument that must be phased out in the near future in Bonn too.

(Original text: Martin Wein, Translation: Caroline Kusch)