The energetic renovation of residential buildings in Germany is increasingly bringing landlords, tenants and homeowners into a financial dilemma.

On the one hand, the requirements of the legislature are increasing, and citizens should save more and more CO2 emissions when heating.

On the other hand, the necessary renovation measures are often expensive and pay little or no profit.

While owner-occupiers can at least make a cost-benefit calculation that suits them, the conflict of interests between landlords and tenants can hardly be resolved: landlords should invest, but would have to pass on such high costs to the rent that tenants could be financially overwhelmed.

At Deutsche Wohnen SE, the largest housing company in Berlin, rent increases after modernization have led to violent conflicts in the past, and ultimately to enormous damage to its image.


A few weeks ago, the company therefore made an alternative proposal for new funding from the state.

The Institut der Deutschen Wirtschaft (IW) has calculated this proposal.

The detailed results are now available to WELT.

The new CO2 tax will apply in Germany from January.

The money goes to the Energy and Climate Fund (EKF).

The idea is now: the funds could be passed on to the federal funding for efficient buildings (BEG) and thus returned to the citizens.

This will increase the renovation incentive for owner-occupiers and landlords, and tenants will be less burdened.

According to the IW, energy modernizations worth 500 billion euros for the period from 2021 to 2050 could be initiated via the EKF.


"This corresponds to 16.6 billion euros per year and in the favorable scenario with a high renovation rate with a high renovation depth can lead to the climate policy goals for the building sector being achieved by 2050," says the IW report.

Associated with the proposal would be a cap on the modernization levy, which would relieve tenants of 120 billion euros compared to an update of the current model.

Warm rent neutrality is often just a dream

If you stick to the current procedure, in which landlords can allocate eight percent of the pure modernization costs to the rent without heating, there is “an enormous potential for conflict, especially if energy measures lead to a significant increase in rent without heating and this increase is not offset by savings in heating costs. "

This so-called warm rent neutrality hardly comes about in reality.

Self-using owners also know that high investments in new heating, insulation and ventilation often don't pay off.


The climate targets are ambitious and, according to IW, increasingly unrealistic.

As part of the “Climate Protection Plan 2050”, it was determined for the building sector to reduce CO2 emissions from currently 118 to 70 million tonnes in 2030 - a saving of around 40 percent.

In the case of multi-family houses, however, only 1.3 percent of the building stock is modernized in terms of energy every year, and this with declining effects, since the buildings that were previously particularly poor have long been overhauled.

In the case of single and two-family houses, only one percent of the stock is modernized.

How such a quota can reduce emissions by 40 percent within ten years remains a mystery.

However, the proposal by Deutsche Wohnen does not include the complete assumption of all costs, but rather a step-by-step reduction in support: If an apartment is modernized in terms of energy, the costs in the amount of the eight percent modernization levy should be fully covered by the EKF in the first year.

Owner-users could receive eight percent of their costs to the same extent.

In the following years, the subsidy would be reduced until it expires after 15 years.

"Overall, tenants and owner-occupiers are relieved of the modernization costs by 60 percent," concludes Ralph Henger, author of the IW report.

The proposal is intended to largely replace the existing funding programs for energy-efficient building modernization "and thereby make the complex funding landscape simpler and more transparent," says Henger.

Because there is also: Many citizens are overwhelmed not only with the investment, but also with the complicated funding programs.

Housing costs are falling - excessive rents are prohibited with immediate effect

Excessive rents in Berlin are now legally prohibited by the so-called rent cap.

So far, they have been frozen at the June 2019 level.

Not everyone is enthusiastic about the fact that they now have to be reduced.

Source: WELT / Viktoria Schulte