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RENTING

Thousands of government-owned flats in Germany ‘are unoccupied’

Despite the urgent need for housing in Germany, one in six properties owned by the federal government currently has no tenant - and the number appears to be rising.

Berlin Friedrichshain
A new residential complex in Berlin Friedrichshain. Photo: picture alliance/dpa | Christophe Gateau

The number of state-owned flats and houses that are vacant has reached a new high: as of March 31st, 6,455 of around 38,000 units in the federal government’s ownership lay empty.

This equates to more than one million square-meters of living space. 

The figures emerged in response to a parliamentary question by Left Party MP Caren Lay, which was made available to the NDR political programme Panorama 3.

They said that, in spite of the current housing crisis, one in six government properties that could be used as accommodation is currently unoccupied.

In North Rhine-Westphalia, Germany’s most populous state, the vacancy rate is particularly glaring, with 2,204 units currently without a tenant. 

Growing number of empty flats

Rents are rising at a rapid rate in many German cities, with tenants in places like Berlin, Hamburg and Munich reporting that they are struggling to find housing in a fiercely competitive field.

Nevertheless, the number of vacant properties owned by the federal government has almost doubled in the past year and a half.

On October 31at, 2020, just 3,260 of the 35,800 flats owned by the Federal Agency for Real Estate Tasks (BImA) was empty, representing around nine percent of the federal government’s housing stock.

Since then, the percentage of empty flats has almost doubled to 17 percent, or one in six, of the government’s properties.

“The sharp increase in vacancies in federally owned properties is unacceptable in view of the housing shortage and the exploding rents in recent years,” Lay told Tagesschau. 

READ ALSO: REVEALED: The most – and least – popular landlords in Germany

Flats ‘cannot be rented’

In response to follow-up questions from Panorama 3, the BlmA confirmed that the number of empty flats was correct but said that the vast majority of these were not in a fit state to be lived in.

There are a number of flats that BlmA would like to rent out as soon as possible, but “cannot do so at the moment for various important reasons”.

“These flats either have considerable defects, are in need of major renovation or are not yet usable because, for example, the necessary planning permissions are missing,” a spokesperson for the BlmA explained. 

That whittles the number of vacant flats that could be lived in down to 2.9 percent of the total housing stock. 

Prenzlauer Berg

Luxury flats in Berlin Prenzlauer Berg. Photo: picture alliance/dpa | Christophe Gateau

In the coalition pact of the Social Democrats (SPD), Green Party and Free Democrats (FDP) announced last November, the parties pledged to build 400,000 new homes per year, with a quarter of these reserved for social housing.

But with the BlmA seemingly struggling to cope with a much smaller backlog of renovations, some are doubtful that this target is realistic.

According to research carried out by Panorama 3, there are federally owned properties in Hamburg that have been unused for more than four years and are still waiting to be redeveloped.

READ ALSO: REVEALED: How Germany’s new government wants to tackle the housing crisis

Converting unused space

“More and more people can’t find a place to live,” said Lay. “In addition, there are now refugees from Ukraine. Empty flats must be given away immediately.”

The Left Party’s housing policy expert is also demanding that unused business and office space be urgently converted into residential accommodation for families in need of a home.

Factoring in empty offices and storage facilities, the BImA recorded a total building vacancy rate of more than five million square metres.

The BImA said it had let more than 58,000 accommodation spaces to federal states, districts and municipalities free of rent in order to provide asylum seekers and refugees with a roof over their head. Of these, more than 29,000 places are currently occupied.

READ ALSO: EXPLAINED: Why tenants in Germany could see bigger rent increases this year

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RENTING

How people in Germany are struggling with rent hikes

Germany's extremely high inflation rates are causing headaches for tenants whose monthly rent is linked to the Consumer Price Index (CPI).

How people in Germany are struggling with rent hikes

Inflation in Germany recently hit a 40 year high at 7.4 percent – and experts warn it will increase further. 

Along with soaring energy prices, many everyday grocery staples, like milk and bread, have gone up in price significantly. 

But some tenants in Germany face another hurdle – rents that are linked to inflation. 

Some landlords or property companies include clauses in contracts for the cost of rent to go up. They can include a Staffelmiete (stepped rent) which means the rent increases gradually over time (but there are limits).

An Indexmiete (index rent) clause in rental contracts means the rent is based on the Consumer Price Index set by the Federal Statistical Office (Statistisches Bundesamt) and may be increased in line with the cost of living in Germany. The rent increase can happen once per year.

READ ALSO: Why tenants in Germany could see bigger rent increases this year

Given the strong competition for housing in many of Germany’s cities, such as Munich and Berlin, tenants often sign contracts despite the rent hike clauses. 

But nobody could have predicted how bad inflation would get this year. Energy prices in particular have rocketed since Russia’s brutal invasion of Ukraine which started on February 24th.

Now some tenants’ associations in Germany are demanding that Index-linked rents be capped. 

The need for advice on index-linked leases is increasing, Anja Franz, lawyer and spokeswoman for the Munich Tenants’ Association, told regional broadcaster BR24.

In the past years – when inflation was very low – rents like this only ever rose by one to two percent, and tenants had very few problems with this. At the moment, however, tenants are facing increases of 7 to 10 percent on their monthly rent.

Adding to the problem is that landlords who have not increased the Indexmiete in the past years can add the inflation rates from that time on top of current hikes – creating huge increases. 

However, landlords can also choose to wait to increase the rent, and only refer to the index figures published by the Federal Statistical Office next year or the year after.

READ ALSO: Altbau vs Neubau: What’s the difference and which should I rent in Germany?

What’s happening in Bavaria?

Bavaria is known for having some of the most expensive rents in Germany.

In many Bavarian cities and districts, landlords are likely to use the options available to them to increase rents, according to Rudolf Stürzer, chairman of the Haus und Grundbesitzerverein (House and Landowners Association) München. That’s because up until now index rents haven’t been lucrative for landlords. In the last 10 to 15 years, the index rose much slower than the market rent. Now that’s changed.

The Mieterverein München (Munich Tenants’ Association) advises those affected to first check whether the calculation is correct when they receive notice of a rent increase from their landlord or housing company.

Furthermore, tenants should check the time interval since the last rent increase. A waiting period of at least one year from the previous rent increase applies.

A man hangs up his keys in a Berlin apartment

A man hangs up his keys in a Berlin apartment. Photo: picture alliance/dpa/dpa-Zentralbild | Kira Hofmann

In principle, tenants who have signed an index-linked rent are bound by this clause. If the landlord demands an effective rent hike, it must be paid.

The Munich Tenants’ Association estimates that three to five percent of its members have index-linked tenancy agreements. In the past, the association even advised that people to sign these contracts – but now they advise against it.

The Haus und Grundbesitzerverein believes that index-linked rents have already been agreed for two-thirds of all new contracts in Munich.

The tenants’ association says index-lined agreements become a bigger problem when the initial rent set is already high. 

They are calling for specific legal upper limits for index-linked rents to be set in Germany to avoid overburdening tenants.

Under standard tenancy agreements rents can rise by no more than 20 percent over three years. In Frankfurt am Main and other places were the rental market is competitive, this cap has been reduced to 15 percent.

The traffic-light coalition wants to reduce this further to 11 percent nationwide, which would mean an increase of less than four percent per year.

The German Tenants’ Association (DMB) also recently slammed the fact there are no cap limits for index-linked rents.

Lukas Siebenkotten, President of the German Tenants’ Association (DMB), told DPA in April that a regulation like this for index-linked tenancy agreements “would be a sensible remedy” to protect renters in Germany. 

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