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HOUSING

Berlin’s ‘Mietendeckel’ rent freeze ruled unlawful. What does it mean for tenants?

Tens of thousands of Berliners face an immediate rent increase of hundreds of euros per month, plus a strong possibility of having to pay backdated rent. Here's what we know so far.

Berlin's 'Mietendeckel' rent freeze ruled unlawful. What does it mean for tenants?
Berlin flats. Photo: DPA

What’s happened?

Germany’s highest court has ruled that Berlin’s ‘Mietendeckel’, or rental cap, is unconstitutional.

The Federal Constitutional Court said that the policy to freeze rents in Berlin for five years to combat soaring living costs was unlawful in a ruling published on Thursday morning.

The capital’s “Mietendeckel” law or rent cap “violates the Basic Law and is thus ruled void”, the court in the southwestern city of Karlsruhe said in a blow to millions of tenants.

The rent freeze was passed by the Berlin Senate in January 2020. It was a flagship policy of the local governing coalition of the centre-left Social Democrats (SPD), the Greens and the far-left Linke (Left) parties.

The law capped rents until 2025, after which any increases would have been limited to 1.3 percent per year in line with inflation

The court ruled in favour of MPs from Chancellor Angela Merkel’s centre-right Christian Democratic Union (CDU) and the pro-business Free Democrats, who are both in opposition in Berlin.

It agreed with their argument that rent policy falls under federal law not the jurisdiction of Germany’s 16 states.

READ MORE: Germany’s top court rules Berlin’s disputed rent cap unlawful

What does it mean for renters? Do they have to pay more money?

Yes, a huge amount of people will have to pay more. The decision is undeniably a huge blow to millions of tenants. With the policy becoming void, it means that many residents in Berlin will face an immediate rent increase. For some that could mean €100 extra per month, for others it could be more than €500. 

The ruling also means that people will have to pay rent back for the months they paid a lower price under the Mietendeckel. That means some people will face a bill of thousands of euros.

But many people have not saved the difference. A poll by Sparkasse bank for regional newspaper the Tagesspiegel estimated that just under half (47 percent) of Berliners had not set money aside for the arrears now due.

Some landlords have, however, said they will not demand the backdated rent – they will only charge the higher rent from the court decision.

Germany’s largest housing company, Vonovia, announced shortly after the ruling that it would not ask tenants for rent arrears. Tenants should not suffer any “financial disadvantages as a result of political decisions made”, announced Rolf Buch, CEO of Vonovia.

Another large landlord, Deutsche Wohnen, said it would demand the money back, but that it would offer payment plans for tenants so that nobody was made homeless.

Following the decision, the German Tenants’ Association called on the federal government to act on rising rent costs for people living in Germany’s cities.

The decision is bitter, “but it is also a loud wake-up call to the federal legislator to finally act and stop the rent explosion in many German cities,” said the President of the German Tenants’ Association, Lukas Siebenkotten.

What can you do if you’re affected?

There are several different organisations representing tenants rights in Germany including Berlin. For a small fee every month, these groups can advise you or help with any issues, legal problems or questions you have on how to deal with landlords. Check out our story below  for more information.

READ MORE: How to join a Mietverein (renters’ association) in Germany

With reporting by AFP

Member comments

  1. Do you know if we have to pay the money back immediately or should we wait for a letter from the landlord demanding that? Does the law regulate that?

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MONEY

Wohngeld: How people in Germany can get help with rising living costs

Many households in Germany could be eligible for increased financial support with their rents and bills from next year. We break down who should apply and how much help they could receive.

Wohngeld: How people in Germany can get help with rising living costs

The cost of living is rising across the board, and nowhere is this being felt more than in the home. For over a year, gas and electricity bills have been soaring and people on low incomes have been left wondering how to make ends meet.

While there is support available for people in this situation, it seems that many households in Germany aren’t aware that they could be eligible to apply for Wohngeld, or housing allowance, to help them with their expenses. What’s more, the amount of money people can get is set to rise at the start of next year.

Here’s what you need to know.

What exactly is Wohngeld?

Wohngeld, or housing allowance, is a form of financial aid for low-income households in Germany. It’s intended to help with the general costs associated with housing, such as monthly rents and utility bills.

Even people who own their own homes are able to get support with their mortgage repayments and building management costs (known as Hausgeld). However, they do have to fulfil certain criteria, like earning under a certain amount per month.

Unlike long-term unemployment benefit, which also includes a stipend for rent and bills, Wohngeld is intended for people who don’t rely on any other form of state support. That could include single parents or people with minimum wage jobs who spend a large proportion of their income on rent.

It means that people on jobseekers’ allowance and students with state loans and grants aren’t able to apply for Wohngeld. 

READ ALSO:

How much money can people receive?

That depends on a range of factors such as where you live, how high your rent is and how much money you earn this month. However, one thing that’s clear is that Wohngeld is likely to rise significantly at the start of next year.

On Wednesday, cabinet ministers voted through proposals from Housing Minister Klara Geywitz (SPD) to hike the monthly allowance by around €190 on average. That means that instead of receiving €177 per month, the average household on Wohngeld will receive around €370 per month starting in January. 

It’s worth noting that Geywitz’s reforms still need to clear a vote in the Bundestag, but with the governing coalition of the SPD, Greens and FDP behind the move, it’s likely that they will. 

The Housing Ministry has also put together an online tool that can calculate the amount of Wohngeld each household is entitled to. At the moment, this still calculates the allowance based on the current rates – but it will be updated if the reforms are passed by parliament. 

Who’s eligible for Wohngeld?

That depends on a complex calculation based on factors such as income, the number of people in a household, the size and location of the property and how high monthly housing expenses are. There’s no straightforward income threshold that people can refer to, which could explain why thousands of households who could potentially get Wohngeld never apply for it.

The best way to check if you’re currently eligible is to use the government’s Wohngeld calculator tool. But as we mentioned above, this is still based on the current criteria and monthly rates. 

As well as hiking the monthly allowance, Geywitz also wants to expand the criteria so more households are eligible for Wohngeld.

At the moment, around 600,000 households in Germany receive Wohngeld. This could increase by 1.4 million to two million under Geywitz’s plans. From next year, people earning minimum wage and people on low pensions are set to be among those who are able to apply. 

READ ALSO: EXPLAINED: When should I turn on my heating in Germany this year?

Sound good – where do I sign up?

In general, the states and municipalities are responsible for handling Wohngeld applications. That means you should apply at the local Wohngeldamt (housing allowance office), Wohnungsamt (housing office) or Bürgeramt (citizens’ office) in your district or city. 

If you’re unsure where to go, searching for ‘Wohngeld beantragen’ (apply for housing allowance) and the name of your city or area should pull up some search results that can guide you further. 

Apartment blocks in Berlin Marzahn.

Apartment blocks in Berlin Marzahn. Photo: picture alliance / Matthias Balk/dpa | Matthias Balk

Alongside an application form, you’ll likely have to submit a tenancy agreement, ID, information on your residence rights and proof of any income or state support you already receive. Other members of your household may also have to submit similar financial information. 

You should also be registered at the address you’re applying for Wohngeld for. 

READ ALSO: Germany to spend €200 billion to cap soaring energy costs

Are there any other changes to Wohngeld I should know about?

Anyone already on Wohngeld, or who receives it between September and December this year, is also entitled to a special heating allowance to help with winter energy costs. This is also set to be given to students and trainees receiving a BAföG loan or grant.

For students and trainees, the heating allowance is set at €345 per person. Meanwhile, the amount given to Wohngeld recipients will vary on the size of the household.

Single-person households will receive €415, two-person households will get €540 and there will be an additional €100 per person for larger households. 

This is likely to paid out in January. 

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