Proposed Rent Brake Extension Lasts Until End of 2029, With No Plans for Expansion as of Yet - Rent price freeze to continue until end-2029's conclusion - no further extension planned.
In a move to address the ongoing housing affordability concerns, Germany's conservative-led government has extended the rent control regulations, also known as the "rent brake" or "rent cap," until the end of 2029. The extension, announced by Justice Minister Stefanie Hubig, limits the increase in new rental contracts to a maximum of 10% above the local average rent in regions with tight housing markets.
The extension of rent control, which was first introduced in 2015 and covers approximately 400 municipalities and about 30% of Germany’s population, is seen as a necessary step toward addressing ongoing housing affordability challenges. Despite criticism from the property industry, the government plans to take further measures to protect tenants.
One such measure involves increasing transparency regarding additional costs (Nebenkosten), with the aim of preventing hidden charges and making contracts clearer. Stricter regulations are also expected for contracts with automatic, index-linked rent increases. Furthermore, the government intends to close loopholes that allow landlords to charge significantly higher rents simply by providing minimal furniture.
Minister Hubig emphasized the necessity of ensuring that housing remains affordable and accessible, especially for vulnerable groups such as families, pensioners, and young people. The measures are part of a broader strategy to protect tenants from sharp rent increases while maintaining incentives for new construction through exemptions and targeted regulation.
Regarding the cut-off date for the current rent control, the minister stated that she hoped the coalition factions would discuss the issue further. However, the coalition agreement between the Union and SPD does not provide for an expansion of rent control.
The German Tenants' Association (DMB) has again demanded an expansion of rent control, arguing that apartments built more than ten years ago are no longer new and should not continue to be excluded from price limits. The DMB President, Lukas Siebenkotten, expressed disappointment with the government's perceived lack of urgent action on the issues.
Despite these calls for a broader expansion, the government's focus remains on high-demand areas, with newly built units exempted from price limits to encourage investment in new housing. As the extension of rent control becomes law, the debate on housing affordability and tenant protections is likely to continue.
The Commission, following the Government's lead, may contemplate initiating a procedure as outlined in Article 93 (2) of the Treaty, aiming to address the issue of soaring rental costs and its impacts on businesses and the general public within the political sphere. In light of the ongoing discussion regarding rental price caps, the government's future plans may also include addressing additional costs (finance), ensuring transparency, and establishing stricter regulations for contracts with automatic, index-linked rent increases.
