Germany, the failed example of rent control that PSOE and Podemos want to imitate

At the beginning of last December, the image of 1,800 Berliners queuing for rent an apartment of 56 square meters for 550 euros per month went around the world. The snapshot condenses the reality of Rental market in the German capital: a rampant shortage of supply at a good price that the market intervention that the PSOE wants to copy for Spain and Podemos has not solved. The German, as explained by Wolgang Beck, an expert in the sector, "is a very regulated market since 1975". Two basic intervention measures were introduced that year. In the first place, the rents were implanted in perpetuity, so that the landlord cannot throw the tenant unless he is going to use the house to live with his family. In addition, during the tenant's stay, the income must be linked to a local income index. In 2015, the authorities gave another twist to the regulation and established that in those areas with little supply of homes for rent, new rentals can only be raised 10% above the local price index.

Before of the change of 2015, prices in Berlin were rising at a rate close to 5%, but since then, an average of 7% per year began to increase, exceeding 10% as of 2016, according to data from the Federal Research Institute on Building, Urban Affairs and Space Development (BBSR) contributed by Beck in a housing forum organized this week by CaixaBank and Asprima. To try to stop the dry climbing, on January 31, the Berlin Parliament approved to freeze the rents for five years and also establish a ceiling on the price of the rental house of 9.80 euros per square meter for ready-made properties to be inhabited before 2014. A measure that conservatives believe will prevent the development of cooperatives and social housing for the needy.

Missing offer

Year after year, Beck explains, "the regulation has been tightening for the owners and construction has been reduced." In 2018, Germany He built about 60,000 homes for rent when the demand touched 150,000. Is lack of offer has caused that, despite the controls introduced, “In large cities, rental prices have risen a lot”, says Beck. "Overregulation is an obstacle if we want to solve the rental problem," Beck insists. "Germany has failed to solve it because excess regulation does not allow private capital to invest in adequate volumes to meet demand," he says. The association of promoters in Berlin estimates that its members have stopped building 9,000 new homes for rent due to excess regulations, which has led to the destruction of 5,200 jobs in the city, 10.5% of the sector, according to Investitionbank data Berlin In the country as a whole, the German Economic Institute estimates that the costs for the construction sector amount to 1,500 million euros.

Beck is an authorized voice to talk about the rental market. From the beginning of 2018 until the end of 2019 He directed the Spanish Socimi Testa, which has 10,600 homes rented in Spain. Before that, he was Executive Director and CEO of the Austrian real estate company Conwert Immobilien Invest SE and served different positions in Vonovia, one of the biggest real estate giants in Germany, specialized in rental housing. He was also director and member of the management team of Booz & Company and manager at the North American consulting firm A.T. Kearney

Like the vast majority of Spanish experts in the sector, Beck insists that there is only one Road to lower rents: increase the housing stock of this type. But this solution, he admits, takes time and requires large investments. Something in which there is a very advanced and almost unattainable student, Vienna. In the Austrian capital, 80% of their homes are for rent and half of the park is officially protected, thanks, to a large extent, that "They have been building this type of houses for a century"Beck explains. The result of having opted for this policy is that while in Berlin rents scale without a brake, in Vienna they do so much more contained, at an annual rate of less than 6%. Is this model exportable to Spain or other countries? Beck thinks so, but also that "100 years of continuous construction of public and private housing are needed for rent." And that requires significant investments that Vienna continues to make. While Berlin allocates just over 60 euros per capita to subsidies for the construction of new housing, the Austrian city invests almost 140 euros.


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