Being civil

Six solutions to the German housing crisis, according to Berlin's mayor

A swelling disparity. Source: DPA

We in Berlin have for years been doing everything in our power as a regional government to make housing affordable, but the mounting economic and social pressures require stronger regulation and federal government support for local authorities. For me, three central demands are important on rent:

People are afraid of being refurbished out of their homes. That is why we must lower the modernization surcharge on rents to 6 percent at most from 11 percent — with a cap of €2 ($2.34) at most per square meter for eight years. But modernization surcharges must end when the investment has been recouped.

Second, rent controls must take proper effect when apartments are rented out to new tenants. That means having a nationwide duty to reveal the previous rent level so that it’s impossible to charge excessive rents.

Third, we must draw up uniform nationwide criteria for qualified rent indices so that every city can quickly afford a legally watertight rent index that can’t be contested in court. And the review period should be lengthened to 10 years from four.

Municipalities first

In addition, I firmly believe that rent controls and other rules to protect tenants must not be time-limited. Rent increases in recent years prove that we need these instruments on a permanent basis.

But in addition to good a policy on building homes, a sound housing policy also requires a sustainable approach to construction land which must stop being a speculative investment. We demand that investors who receive a construction permit from the local authority and thereby attain an increase in the value of their land should use it for social housing and infrastructure such as kindergartens.

To that end three measures are needed initially:

The government and administration must make it possible to build homes quickly. But developers must then also use this permission quickly and mustn’t leave construction land unused for years. To exert pressure here, we finally need a land tax to skim off speculative profits (the so-called Grundsteuer C – eds.). That will allow us to put the brakes on speculators and ensure that construction takes place quickly.

Second, we must only allocate communal construction land to socially-minded developers like municipal housing construction companies and cooperatives on a leasehold basis. If private investors fulfill our conditions for social housing they can also be considered.

And third, all federal land suitable for housing and municipal purposes must be offered to municipalities at fair prices. Only if municipalities forego their right of first refusal should federal land be offered to cooperatives or private developers as leaseholds. I can definitely say that Berlin is prepared to buy all the federal homes and land in the city.

Social harmony

We as a Social Democratic party know that the compromise agreed with Angela Merkel’s conservatives is good but it won’t be enough to solve the housing problem. For that reason, the national Social Democrats (SPD) have set up the “Commission for affordable homes and social land policy,” which I will run together with deputy national SPD leader Natascha Kohnen.

Of course, we will hold discussions with private housing developers in that forum. And perhaps the realization will take hold that Germany as an economic location can only prosper if there is social harmony. A jointly negotiated rent moratorium, for example, would quickly relieve the market and at the same time help the economy through increased consumer spending.

I want a vigorous debate about a new housing and rent policy and will continue to fight for a social housing and land policy in our Social Democratic commission as well as in my capacity as state governor at the national level.

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