Berlin's city development senator Katrin Lompscher has defended the rental cover planned by the Red-Red-Green Senate. "We want to put a stop to speculation, for affordable rents and a social city," said the leftist politician. The goal is to secure a socially mixed city for the future. For this it is necessary to intervene in the existing rents.
Lompscher argued that the latest rent increases in Deutsche Wohnen Group are further proof that the market will not be the only one to do it. "The Senate is on the side of the tenants," said the senator.
Due to the tight housing market in Berlin, the Senate wants to freeze rents for five years by law. On Sunday, key data for the rental cover from the Lompschers department became known, according to which apartments may not cost more than just under eight euros per square meter in the future. Depending on the age and equipment is from maximum cold rent of 3.42 to 7.97 euros the speech. If rents are above this limit, tenants should be able to lower them.
Associations consider draft unconstitutional
Lompscher pointed out that it was a "preparation for a draft bill", which was not intended for the public. For the drafting of the bill is currently running a "work process" in which experts, representatives of the coalition and the housing industry are involved. Therefore, she will not comment on the issues that have become known for the time being.
The Central Real Estate Committee, an association of the real estate industry, announced it would defend itself against the plans of the Berlin Senate. "Here expropriation through the back door should be introduced on a large scale," criticized President Andreas Mattner. He called on the political groups to submit to a judicial review to verify that the laws are constitutional.
Also the president of the real estate federation IVD, Michael Schick, called the course before the Federal Constitutional Court. "Such a project, whose unconstitutionality is written on his forehead, can not tolerate politics," he criticized. The President of Wohnungswirtschaftsverband GdW, Axel Gedaschko, said that such a hiring cover would overshoot and hit those who invested in the housing market.
Shares of Vonovia and Deutsche Wohnen lose
Vonovia, the largest German apartment rental company, fears effects on its business. The company's stock lost 2.3 percent this Monday. The shares of MDAX listed rival Deutsche Wohnen, which is more represented in the capital than Vonovia, broke even temporarily by almost five percent to its lowest level in two years.
Vonovia warned that if the plans actually materialize, that would put a 20 to 25 million euro burden on the company's rental income in 2020. This would correspond to around ten percent of rental income in Berlin and about one percent of total rental income in the Group. Vonovia owns 40,000 apartments in the capital, which is ten percent of its total portfolio.
A spokeswoman for Deutsche Wohnen said the draft was a "frontal attack on the rule of law." Rent would be arbitrarily determined without regard to location, facilities or income of the tenants. Deutsche Wohnen would be hit hardest by a rent ceiling, since it is the largest private landlord in Berlin with a good 110,000 apartments. The group had only a few days ago according to media reports sent to 20,000 to 30,000 households letter with rent increases.