These leases can now become a trap

In Hamburg alone, tens of thousands of households are threatened with drastic rent increases. They have contracts where the landlord can increase the rent by as much each year as the CPI has risen. Currently, an increase of up to 7.5 percent would be permissible. It is difficult to predict how inflation will develop as a result of the war in Ukraine.

Further strong increases could follow in the coming years. Because there is no cap on the so-called index rents - unlike other rental contracts. The SPD and the Greens now want to change that. They demand that the Senate should work at the federal level to ensure that index rents can only be increased up to a fixed upper limit. A corresponding application is to be decided on Wednesday in the citizenship.

The Hamburg government factions are not alone in their demands. Similar advances are also being made in Berlin. Because index rents could become a problem, especially in large cities, where rents are already high and even people with middle incomes have difficulties finding an apartment.

"Housing must remain affordable," says Martina Koeppen, spokeswoman for urban development and housing in the SPD parliamentary group. She is one of the people who drafted the application to the Senate. Hamburg is already using all legal levers to limit rent increases in the Hanseatic city. But now a new lever is needed for the index rents.

Index-linked leases have not been on the agenda up until now, admits Olaf Duge, spokesman for urban development and housing for the Green Party. In times of low inflation, these leases weren't a problem, he says. And in fact, tenant associations, for example, also see it that way. Because landlords are only allowed to increase rents to the extent that the cost of living in Germany increases overall. Theoretically, tenants can even apply for a rent reduction if the consumer price index falls. Well, "in the face of rising inflation," Duge says, index leases proved a "trap" -- "a development that was so unpredictable."

An additional problem with the index rental contracts for Hamburg is the number of them, which has recently risen sharply. "The proportion of these leases in Hamburg more than doubled between 2015 and 2021 and is now eight percent," explains Köppen. With a total of around 730,000 rental apartments in Hamburg, around 58,000 households have rental contracts with inflation compensation.

The red-green application plans to examine whether a cap can also be introduced in the case of index rents, as with regular rents. The Capping Limit Ordinance stipulates that rents may not be increased by more than 15 percent within three years. This regulation has been in force in Hamburg since 2013 and will continue until at least 2023.

Capping the increase in index rents to 15 percent in three years is only the minimum demand from red-green. "In our view, the upper limit should be based on the future plans of the federal coalition and provide for a maximum rent increase of eleven percent every three years," says Green politician Duge and cannot resist a dig at the smallest partner in the Berlin traffic light coalition.

The FDP in the federal government must finally stop standing on the brakes. In the federal government's coalition agreement, the traffic light parties have agreed to lower the cap to eleven percent. Everyone should stand by that. Tenants who are already “having to shoulder rapidly increasing energy costs” shouldn’t be burdened with rising rents, says Duge. "In the interests of social cohesion in our society, the federal government must act quickly and effectively," he demands.

The Association of North German Housing Companies (VNW) also made another suggestion this week to ensure that housing in and around Hamburg remains affordable. VNW boss Andreas Breitner called for the housing benefit to be increased and the number of beneficiaries to be increased considerably. The housing benefit is a state subsidy for rent and is currently often used by students, among others. According to Breitner, the background to his demand was the increased energy costs, which meant that many Hamburgers had no money elsewhere.

"Households with medium and low incomes that are not entitled to social assistance or Hartz IV and for whom a solution that relieves the burden must now be found quickly are particularly affected," said Breitner. It would also make sense to determine whether someone is entitled to housing benefit when checking the tax return. The housing benefit can then be automatically transferred to the beneficiaries.

The VNW represents a total of 407 housing cooperatives and companies in Hamburg, Mecklenburg-Western Pomerania and Schleswig-Holstein. Around 1.5 million people live in the 686,000 apartments they manage.