Rent cap: Hubertz fights for new buildings despite criticism from the Union!

Rent cap: Hubertz fights for new buildings despite criticism from the Union!

Federal Construction Minister Verena Hubertz (SPD) has taken a clear position in the debate about the rent cap and contradicted the Union's criticism. She finds that the rent control does not lead to a decline in new buildings. This is an important argument in the current housing policy discussion, as the rent control regulations do not apply to new buildings. In connection with the SPD's political push to extend the rent control from 2014 to 2019, it is clear that this initiative is meeting with resistance from the Union. Nevertheless, Hubertz is optimistic about possible agreements in parliament and emphasizes the need to offer investors planning security. Company Today reports that it wants to create incentives to promote investment and does not see the rent control as the main problem for the lack of investment. Rather, it is emphasized that the general conditions in housing construction must be improved.

The current situation in housing construction shows worrying trends. According to one estimate, the number of completed apartments this year will fall to just 230,000, although over 300,000 are needed. This illustrates the political awareness of the problem of housing construction, which is currently growing. In recent months, discussions about deviations from standards and faster designation of building land have intensified. Hubertz and her party are committed to a “housing construction turbo”, whereby building land should be given priority and objections to construction projects should no longer be allowed in the future. This regulation comes from the refugee crisis in 2015 and is intended to help address the housing shortage. IWD highlights that these measures are necessary to counteract the declining number of building permits.

Long-term challenges for housing construction

The rent cap is increasingly being viewed critically as it inhibits long-term investments, especially with regard to the planned measures to cap index rents, which affect investors in new buildings. Another important point is the focus on the renovation of existing buildings, where CO2 emissions should be given greater attention. The discussion about emissions efficiency is increasing, while the classic aspects of energy efficiency may no longer be at the forefront.

The geopolitical conflicts and the challenges arising from the federal government's debt package also influence interest rates on the real estate market. The infrastructure package presented by the government should also help to stabilize or increase the value of residential areas. In this context it becomes clear that international capital is of great importance for the German real estate market. Despite the current situation, the share of international investors in the market remains relatively low, especially in the luxury segment, where it is less than 10%. Nevertheless, foreign investors are essential as partners for housing construction and renovation in order to overcome the challenges of the market.