Wednesday, June 19, 2019
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Fight for an instance – Mietspiegel in the criticism

ErfurtThe new Berlin rent index was not even 24 hours old, when Philip Grosse made a round robin: "That clearly does not reflect the real market developments," said the CFO of Deutsche Wohnen. The current quarterly figures of his company, the occasion of his speech, moved into this moment in the background. Just over a week ago, Berlin introduced the rent index.

The increase has slowed to 2.5 percent per annum, the lowest level in ten years. Big can not understand the numbers. He considers a five percent increase to be a more realistic size. Deutsche Wohnen now wants to analyze the rent index in detail.

For decades, rent indexes were a reliable reference for the local comparative rent. But today they are in the criticism. In Munich, Bonn or Braunschweig, too, there has been a debate over the past months about how representative the references really are.

This year alone, there were two high-profile court cases that focused on rent levels. The first: In Munich, the owners' association Haus und Grund had sued for the publication of information on 30 000 apartments, which were indeed charged for the Mietspiegel, but not included in the calculation.

The Bavarian Administrative Court gave house and reason right. The city has to put out the data – as well as the calculated net cold rent for the 3000 apartments, which were taken into account in the rent index. The fact that the city has resisted the release of the data, give the feeling that something should be kept secret, says Kai Warnecke, President of the Association at the federal level.

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The second: In Berlin, a German resident tenant did not want to accept an increase in his rent, which was justified by the Mietspiegel 2017. It came to a fight. Only judged the district court Spandau in the sense of German living. An appraisal had even determined a comparable rent above the rent level. At the beginning of May, the district court of Berlin overturned the ruling: The Mietspiegel is still valid.

Tenants' associations criticize the attacks on the Mietspiegel. Landlords wanted to knock out only higher rents, is the charge. The Berlin housing association BBU also took the Mietspiegel in protection. It is the quarrel at the core of the basic question: what exactly is the local comparative rent? Is it data of new lettings, new leases plus rent increases of the past years or all rents in the city area?

The emergence of rent levels goes back to the 1971 Housing Cancellation Act. It was the birth of the tenant protection. Until then, owners could cancel their tenants relatively freely, also to increase the rent. While tenants should be better protected, landlords have been given the opportunity to increase rent in existing contracts to market levels. In 1974, the Mietspiegel was established as a data source for the local comparative rent.

It is anchored in the Civil Code. Today, terminations for rent increases by law are excluded. Rent increases up to the customary comparable rent must, however, usually agree with tenants. Every two years, the rent index should be adapted to the market development. According to the law, all apartments which have been re-let in the past four years or in which the existing rent has been changed are to be included in the calculation.

Funded apartments are excluded. Literally, the instrument should be a mirror that depicts the local rent. "A rent index should not reflect the amount of the current new lettings, but is due to the design usually a much lower level again," says Steffen Sebastian. He is a professor at the Ispra Institute for Real Estate Economics and Chairman of the Mietspiegelkommission of the Gesellschaft für Immobilienwirtschaftliche Forschung (Gif).

Importance is increasing

"The instrument has empirical as well as normative elements. This is often forgotten, "says Bernd Leutner, Managing Director of the market research institute F + B, which among other things compiles the rent index for Berlin and Hamburg. Because the rents of municipal providers are considered as well as the private.

In this way, the widest possible picture of comparative rents should be presented. As a rule, the share of communal dampens the rent level. In Berlin, for example, the rental growth of municipal providers is limited by a cooperation agreement with the city. The SPD last called for a rental cover.

A spokeswoman for Deutscher Wohnen criticizes the fact that municipal companies in the sample are over-represented, while the stocks of private housing companies are under-represented. In Munich, too, the lawsuit of Haus und Grund indirectly implies that the city should influence the selection of the sample.

The purpose of the local comparative rent was unequivocal until the end: It should be a reference to what level landlords may increase their rent in existing contracts. Until last, specifically, until June 2015. At that time the rental price brake was introduced.

"With the introduction of the rental price brake, the rent index has gained massive importance," says Leutner from F + B. Because the rent index until then was only a reference for rent increases in existing contracts, it should now also be used for new leases: more expensive than ten percent above the local comparative rent may be rented where the rent brake applies, no apartment to a new tenant.

This causes strife in the tight housing markets. "There are two ideologies colliding," says Andreas Schulten, chief representative of the real estate analysis house Bulwiengesa. The proponents of a regulated rental market tethered by government regulations are the market economists, who are convinced of the advantages of a housing market characterized by supply and demand with self-regulating rents and argue that only new construction can stop price inflation.

The rental price brake should initially be valid for only five years. But now she wants to extend Federal Minister of Justice Katarina Barley. By the end of the year, her ministry also wants to work out the principles of a calculation standard. Because he is missing today. And municipalities are not even obliged to create a rent index.

According to the Mietspiegelindex of F + B, the instrument is to a significant extent only in cities and communities from 10,000 inhabitants. Of the nearly 1,600 locations of this size, only 36 percent have a rent index. A distinction is made between simple and qualified rent levels.

For the simple ones, there is no concrete methodological specification as to how the data is collected. It is enough if the result tenants, landlords and city council agree. "This method is disrespectfully called Rotweinmietspiegel, works well in many cases anyway. Not every municipality can afford the time and the money for a qualified Mietspiegel, "says Sebastian of the Gif.

Municipalities shy away from high costs

Qualified rent levels have to be compiled according to scientific principles – whereby professional circles struggle for two scientifically recognized methods. Big cities cost such a rent mirror several hundred thousand euros.
Whether at all a rent index and, if so, which is created, determine the municipalities.

The picture presents itself accordingly diverse. Only 55 percent of the 80 largest cities in Germany have opted for a qualified rent index, 29 percent for a simple; 16 percent completely abstain. Among the latter are even seven cities with tight housing market, in which the rental price applies, the Gif Mietspiegelreport shows. This includes Bremen. But: "Without Mietspiegel the rental price brake is largely ineffective," says the report.

Criticized in the complaints in Berlin and Munich but not the scientific method of creation, but the selection of the sample. Because even there are differences: sometimes tenants are questioned, sometimes landlords, sometimes both. Participation in the survey is voluntary. And so critics last questioned whether the basis of the rental reference is truly representative. The creators and the clients reject any allegations.

However, in order to create more trust, Leutner from F + B advocates a mandatory participation. Sebastian also agrees: "What is possible with the microcensus, a duty to answer, should also be possible with the Mietspiegel." The ideal image closest would be a digital collection of all rental data, a kind of transparency register, says Schulten von Bulwiengesa.

This has the disadvantage that the data would have to be collected with a great deal of effort and complexly coordinated – not to mention privacy concerns. If one decides for a slimmed-down variant in which the data come in for new leases or rent increases, one faces again the problem of a disputed sample.

Make rent levels more effective

In any case, the significance of the rent mirror will not decrease. Federal Minister of Justice Barley plans a tightening of the rental price brake in her most recent draft bill. Because in the future, not only the rental increases of the past four, but the last six years will be included in the calculation of the rent index.

This will "dampen the price level," according to the draft. The rent is frozen in this way over a longer period, scolds the real estate association GdW. The CEO of the German Tenants' Association, Ulrich Ropertz, Barley's proposal, however, is not enough.

He would like to incorporate the rent increases of the past ten years. Justice Minister Barley says goodbye to Brussels after the European elections on Sunday. She will no longer be able to present her draft as a law. Whether the tightening of the rent brake goes through, whether there is a duty to provide information for the rent index or even a single, binding standard is still completely unclear. One thing is clear: the debates about the rent index will not fade away.

More on the subject: BGH judgment on self-employment terminations gives landlords an advantage. Editor Matthias Streit therefore calls for other measures.

Correction: In a previous version of the article was the speech that the CFO of Deutsche Wohnen, Philip Grosse, a rise in the Berlin rent index by ten percent would be more realistic. In fact, he believes that a rise of five percent per year is realistic. The statement to ten percent referred to a two-year period. We apologize for this error.

Real Estate (t) Real Estate (t) Real Estate (t) Real Estate (t) Real Estate (t) Real Estate (t) Real Estate (t) Real Estate (t) Real Estate (t) Real Estate (t) Real Estate (t) Real Estate (t) Rent (t) Rent (t) (t) BGH (t) GdW (t) Philip Grosse (t) Katarina Barley (t) Steffen Sebastian (t) Andreas Schulten (t) Apartment leasing

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