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Homeless in Habeck's authoritarian state

Faithful unto death are only fools.

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Homeless in Habeck's authoritarian state

Faithful unto death are only fools. Loyalty has its limits in the mind, said the diplomat Charles-Maurice de Talleyrand-Périgord, who, as a master of opportunism in the 18th and 19th centuries, always changed sides in good time and survived every French regime. At the moment we have a regime that wants to do everything differently and is willing to roll down the old order for this purpose: namely the so-called progressive coalition under Robert Habeck, who would like to ban oil and gas heating, side by side with the The EU and Merkel's late successor Ursula von der Leyen, who want to enforce forced insulation for existing properties with "Fit for 55". On the other side there seems to be a social minority: namely the backward owners of old buildings who neither want to replace the heating nor pack up the houses. 40 percent of real estate in Germany is said to already meet the latest standards, and it is only a stubborn minority who, with their opposition to sensible renewable energies, are now preventing the tenants of their buildings from living in progressive houses in a climate-neutral and low-cost manner with heat pumps.

At least that's what the Progressive Coalition says and gives the impression that only a greedy group that has done too little and squandered the rent elsewhere is making false claims against the bright future. While many others have already seen the signs of the times and are living in buildings like the one above, which are new, excellently insulated and - er, well, maybe a little badly moldy, and it's clear that this nerd Don Alphonso used a photo like that, that disgusting conspiracy theorist. And that despite the fact that the forced-fee broadcasters are making such nice little steel films for the politicians, pinwheels to the right, pinwheels to the left and, bang and still! And in fact, this line of argument appeals to many: When I ask around, many homeowners are really outraged. But in Germany, the ownership rate is only 46.5 percent. The others are tenants, and quite a few are now happy that the sometimes hated landlords are now being held accountable. A socially disadvantaged professional group is particularly susceptible to this view: the generally poorly paid journalists, who then stylize Mr. Habeck into a victim of piercing. The real situation is quite different: nobody will be hit harder by the planned new regulations than the tenants, who are helplessly at the mercy of the developments.

Because in contrast to the statistics, where 40 percent of the buildings in Germany already correspond to the politically desired energy efficiency classes A to D, the reality is different. This statistic is based on the energy certificates of the Building Energy Act that have been drawn up so far and that have actually been issued and registered. Theoretically, such energy certificates must be presented and stated in the advertisement when selling or renting, with the exception of monument protection. But that only applies to new rentals and sales. Old leases from before 2014 and homeowners usually do not have an energy certificate, so they are not included in the statistics and - consequently, nobody currently knows how things really look in Germany. Even the federal government, whose members have probably not seen a village of normal population for a long time, has no idea how many buildings would be affected, and that is exactly why a binding energy certificate is only now to become mandatory.

For many tenants, however, this also means that they do not know in which energy efficiency class they live. Be it because they are old tenants. Be it because the apartment was not publicly advertised, because in times of drastic housing shortage since about 2012 this is no longer necessary with better properties. Or is it because the question of the energy certificate for rentals is somewhat counterproductive if 200 other interested parties would take everything without asking. The energy certificate is a nice idea, but it doesn't play a role in view of the real state failure in the housing shortage. In other words, anyone who does not explicitly have an energy certificate in their hands is very likely to be affected by the necessary conversion measures by the progressive coalition, with the exception of the green chic in Berlin-Mitte in their listed buildings with three-meter-high ceilings and stucco. I say that because I actually know a high-earning wind turbine consultant who lives in Schöneberg in exactly the same way. Isn't that you? Then this is where it gets ugly.

Because the new heating ban law was written by people in Habeck's ministry who only had the goal of climate neutrality in mind, without considering the way of thinking and the possibilities of landlords. In fact, the new law is a shock to people for me. For example, we have a 105 m² small house from 1928 that stands on a 551 m² lot. The house has been renewed again and again, the last time the tenant changed for a low five-digit sum. In the 1960s, before my parents bought it, the above glass blocks were still installed. You can't renovate them energetically at all, and at the moment the built-in gas heating is also causing problems. In other words, we would be a textbook example of the total restructuring advocated by Mr. Habeck and the EU Parliament. And you have to face the facts: Electric heating with a heat pump really only makes sense if the old radiators installed in niches are removed and the walls and roof are insulated. Incidentally, this does not only apply to this house, but to all the old buildings that tell of the economic miracle and lower middle-class dreams on this street. They are houses like children draw them, and unfortunately they are unaffordable for many today because of the housing shortage.

On the other hand, one could of course say that the conversion is worth well above 5000 euros per square meter of living space due to the high real estate prices in our country. In fact, I also found out what such a full renovation with a heat pump would cost, and the minimum estimate is 150,000 euros. That's a lot of money in a country where the median household net worth is just €70,000. It will take at least a year to complete this project with insulation and new underfloor heating and new floors and insulation and roof extension and new dormer and new wiring. This is the case with a rented property, which is why I have to inform the tenant in advance about the costs, the scope and the probable rent increases: I can add 8 percent of the costs, with a cap of 3 euros/m² over 8 years. That's a drop in the bucket for me and expensive for the tenant - and there's also another problem: If I have the floors redone and the old heaters removed, I would have to find somewhere else to accommodate the tenant at my expense.

Big real estate companies have a certain reserve for such purposes, but I don't have another empty house. I rent quite cheaply far below the price that one could charge here in this city. Should I now make a comparable property available to the tenant for a year – if all goes well – I would first have to find such a property. That's only possible if I'm willing to pay the tenant four to eight times what I have left as net rental income after deducting taxes in this completely overheated rental housing market. I want to say: In addition to the pure renovation costs, I de facto forego any rental income for a few years, and that doesn't even include the costs for the move. Therefore, as what is commonly referred to as a "social landlord" with "affordable rents", with my pretty little witch's house and the beautiful garden and the nut trees, with a lot of luck and any support, I'm going to get rid of a six-figure sum. I also stand by the side for Habeck and von der Leyen's requirements every day for a year on a construction site and can also hear from the bank that at my age and given the imponderables of the renovation of such an old building, no loans are granted. And all this so that I would end up having to argue with the tenant about which renovation costs I can pass on, because everything that is not energetic, such as the new plaster, is my private cost.

As a reward for the fact that I had lost rent for four years beforehand because I had to find somewhere else to accommodate the tenant. I would ideally avoid that by giving up being a social landlord and evicting the tenant – in theory please, in reality I would never do that, the real tenant is super nice. If there is no tenant, I only lose a net annual rent. Herr Habeck didn't tell you that, did he? As a property owner, however, the question "How do I get rid of my tenant" is a core part of every renovation consideration. The so-called rental price brake, which is actually supposed to protect tenants, is added to this. I am subject to this rental price cap for a rented property even after the energy-related refurbishment. If I get rid of the tenant and hand him over to the unpredictability of the rental market, that's humanly ugly. But I'm doing something for the Progress Coalition, because I'm not only doing energy-efficient renovations for 150,000 euros, but I'm also adding a few euros for a core renovation like new. And that in turn means that in our small, extremely expensive city with rents almost like Munich, I am exempt from the rental price brake and can set a new, significantly higher rent. In other words, an affordable rent for a witch's cottage disappears and a new, thoroughly profitable luxury property with four times the rent has emerged. I don't think that's nice either. But that's the only way I could be responsible for the immense costs. And if you don't believe it, that's exactly what they recommend when you ask the bank for a loan.

I might be able to do that because I'm still relatively young and my parents put aside so much of the rental income that I could just barely cover the costs. Unfortunately, all this is so expensive that you are considered “rich” in Germany simply because of the reserves, although you can actually only use it to renovate a house according to the wishes of the Greens and fix your own roof. If I were 15 years older and if I didn't have the equity, I would have to do what some people in this neighborhood are doing right now: sell the property to a real estate developer, who will tear down the house and take the building site for two boxes from my childhood garden six apartments each, as today's floor space figures allow. All that remains of a garden is a paved corner. But Germany is not a rich country, and many who are considered rich because of property ownership are broke when insulation and heating come into force. Of course it's sad for the people who have to leave their rented house. But I'm a fairly young landlord in my mid-50s. Most are significantly older. And you can't expect 70-year-olds to waste years of their remaining life on renovations with an uncertain outcome at the command of traffic lights and the EU, so that a tenant has good insulation. They won't. If only because there is hardly any trust in this state after these de facto expropriation plans.

Tenants may now think that they don't care, and the next landlord after the sale will also be obliged to insulate the old house for them. After all, apart from a few exceptions, you can hardly be terminated in Germany if you only transfer the rent, and enforcing personal needs is treacherous and takes quite a long time. Rent increases may not be terminated. But that's only true because real estate has generally been profitable up until now. But now Section 573, Paragraph 2, Clause 3 of the German Civil Code (Bürgerliches Gesetzbuch, BGB) comes into play, which up until now has rarely been considered. It states: "The lessor has a legitimate interest in terminating the tenancy, in particular if the continuation of the tenancy would prevent the lessor from making appropriate economic use of the property and would suffer considerable disadvantages as a result." In layman's terms, it looks like this: In the past, houses on the property represented a value. With the new regulations and imminent costs in at least a 6-digit range, the residual value of the building must be compared to the impending costs: As soon as the building due the obligation to renovate represents a negative value, the landlord is prevented from an appropriate economic exploitation of the property, can therefore enforce a demolition, and evict in compliance with the usual deadlines. And please, that's one of the very few exceptions in which you can demolish listed buildings.

But aren't you that privileged? Do you happen to rent a nested high-rise building that is already 50 years old and has high thermal bridges with balcony projections that are difficult to insulate on the sides? Or in a concrete skeleton building with large glass surfaces with a radiator? A lot of greenery has been left around the outside like in the 70s, and the standard land value has gone through the roof in recent years? And you didn't bother, because as a tenant none of this is your concern, and when the chancellor promises an economic miracle through renewable energies, do you think primarily of wind turbines? You haven't thought about what a complete renovation of a house looks like because, unlike me, you have never done a total renovation? You should perhaps deal with the concrete consequences of Section 573, Paragraph 2, Clause 3 of the German Civil Code in a timely manner, because no one in Habeck's ministry and in the EU Parliament has probably thought of that. To put it bluntly, without false consideration: Accompanying measures for social compatibility for tenants in the law are completely irrelevant for landlords and cost-neutral once the tenant has become homeless.

It also doesn't matter what subsidies and hardship rules are quickly invented for homeowners to save Habeck's reputation: As a landlord, I can only think of the costs, which will be immense given the completely outdated building stock in Germany. But there's always a way out for people like me. I can offer the tenant money to move out. I can carry out a total renovation that frees me from rent control. I can sell to someone who puts up box houses. I might lose a fortune in the process, but I live in a listed building myself, and the worst-case scenario is that I'll sell everything and go to Italy. If I am no longer allowed to rent and the renovation is too expensive for me, I can leave rooms empty for a while and not find a tradesman. But first of all, all this contributes to the shortage of living space. When I renovate, living space is not available for a while. When box houses are built, the living space of the demolished house is not available for a few years. If I can't find anyone doing energy-related refurbishment, living space isn't available.

If I have it torn down because of the costs and give the evicted a book with the addresses of the 343 EU politicians who voted for compulsory insulation as a farewell gift, that may not be an act of particular friendliness. But it's a negligible problem compared to the housing market madness that's upon us when we actually have to styrofoam and rip out intact heaters on stock the extent of which isn't even known. And in a hurry that is almost a guarantee of improper implementation, mold, insufficient power supply and other unforeseeable costs. If the state makes renting an unforeseeable existential risk, it has to do it itself. And to put it bluntly: This state considers 9 m² per adult and 6 m² per child to be reasonable, see § 7 WoAufG Bln. Oh? Didn't you know? well But also something like that. Experience the green economic miracle!

I didn't make the miracle, I just want to rent old, small houses in peace, with tall walnut trees on which children and cats learn to climb, and terraces where you can have a barbecue with friends. I want to bring my tenants ham from Italy and no trouble, I don't want to tear anything away, and it's enough for me if the chimney sweep comes once a year. I'm perfectly happy when things are going well and everyone is making ends meet, and when the corona crisis started I told everyone that in an emergency you're welcome to talk about anything. I'm just a regular small landlord like millions of others who thought they were doing something good by offering housing to others at affordable prices.

Now I'm under pressure and I don't have many alternatives. Unfortunately, without exception, all of the alternatives are particularly awful for tenants. In the very best case, affordable rents will only be possible through tiny housing gaps, and it will be more expensive for all of us. But I don't believe in the very best cases, not with these politicians in power. In the end, the housing crisis will worsen dramatically because there is simply far less space for everyone because of the unaffordable styrofoam glue and the destruction of the heating system. And the progressive coalition of the unsuspecting will not admit any mistakes, but will only think about how to remedy the self-inflicted shortage with housing coercion and load it onto the shoulders of others. Then I prefer the Italian option, and after me the deluge.

Only fools are loyal to the old, halfway reliable Federal Republic. Belief in Habeck's authoritarian state has its limits in mind.

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