Back to blog

Why Germany’s rent brake has failed

See blog

Readers' comments

The Economist welcomes your views. Please stay on topic and be respectful of other readers. Review our comments policy.

guest-aasaliwj

The whole conventional real estate (brick and mortar real estate) can easily be undercut by delivering prefabricated modular housing onto some government lands that have been designated as residential areas. There is the whole coastline of Northern Germany that can be utilized for housing of migrants and other not so well off Germans.
The migrants are currently not allowed to work, but in time when this prohibition gets lifted, whole factories can be relocated to the northern areas, or wherever else the migrants may be housed, wherein they could be asked to work at the minimum wage rate until they are finally (if ever) repatriated to their original homelands.

umghhh

Rent price controls as most of controls have significant side effects and do not work long term anyway or work so well that nobody sells or in this case lets.
Germany is special in that the real problems are never or hardly ever addressed and proposed solutions are doing emotional massage but nothing to solve problems. On top of that Maas is a specialist of bad law. I think he will be listed in books for generations to come as the worst lawmaker ever.
In this case import of millions of people that have (contrary to people living here longer) guaranteed lodging (if need be two houses if there are too many wives) made situation worse but before that it was bad enough anyway.
The houses in Germany have to be insulated beyond commons sense and materials used are the same as the ones that burnt so spectacularly in London exactly one year ago. They are also difficult to get rid off after they have been replaced - something that happens once in a while. They are also very expensive.
The tax is high enough as communities have to cover rising costs especially of the new citizens. Then in the over regulated country like Germany there does not seem to be any plan how to build the whole localities which makes scarce parcels even less available - price raises there too. The regulation of fear thereof makes people invest in expensive heating equipment that is hardly going to pay back the difference in price over traditional one.
The laws making it difficult to raise the price do not stop raising the price but they stop some of the property owners to keep he property unrented - that I could no believe but was told many times is true and read about it many times in media so there must be enough cases. The point however is this - if renting is risky because you may not cover your costs and generate profit then people will not rent.
The property owning companies owned by communities have been sold almost everywhere which made new owners aim at people with money that strangely meant higher standard and more expensive apartments.
Discussion about forcing property owners to rent the apartments for new arrivals does not make people more enthusiastic about owning property to rent.
Come to think of it the government and ruling marxists made almost everything possible to make prices go up. The introduction of a law that is stopping owners from asking for market price is just another example of silly deeds that they are guilty of.