Berlin Housing Companies Call for Higher Rents and Stricter Penalties for Rent Gouging
Berlin's housing sector faces a complex challenge as the Berlin-Brandenburg Association of Housing Companies (BBU) emphasizes the need for increased rental prices while simultaneously advocating for harsher penalties against rent gouging. This announcement follows the BBU's annual press conference, where it highlighted the significant investments being made by its member companies despite a noticeable decline in new construction.
In 2024, BBU member companies invested a historic total of EUR2.9 million, with expectations to increase this amount to nearly EUR3.9 million in 2025. Approximately half of this investment is earmarked for new construction, while a quarter is designated for property maintenance and modernization.
However, the BBU's chairperson noted that investment levels, while nominally higher than previous years, have not translated into increased construction due to soaring building costs. For instance, the financial resources available today would only suffice to construct two homes instead of three compared to 2019. Consequently, many planned projects remain unexecuted, as the necessary rental rates for new apartments have climbed above EUR20 per square meter, which many tenants would find unaffordable.
In response to the stagnant new construction figures, which project only 5,270 completions for 2025--slightly higher than the 5,214 recorded in 2024--the BBU urges the government to maintain its current funding levels for new construction at EUR1.5 billion. Additionally, they suggest relaxing some building regulations to lower costs.
On a positive note, the number of new building starts has shown some improvement, rebounding from a historic low of 3,242 last year to a projected 6,486 for 2025. The land-owned housing companies are expected to account for a substantial portion of these developments, with forecasts of 7,000 completions in 2026 and a total of 35,000 by 2031.
BBU representatives stress the importance of allowing rental increases to facilitate ongoing investment in housing. Average rents across BBU companies have risen by five percent from 2023 to 2024, now averaging EUR6.97 per square meter.
Another critical issue facing BBU members is the urgent need for energy-efficient renovations. Approximately 7.7% of the housing stock falls below acceptable energy efficiency standards, necessitating substantial upgrades. The BBU calls for stable funding programs and the ability to finance these improvements through rents.
Moreover, the BBU has raised concerns about exorbitant rental prices set by other market players, urging the government to amend the current rent gouging law, known as the Wucherparagraph. The existing law requires proof of market tension to sanction excessively high rents, a criterion that is proving difficult to enforce. The BBU proposes increasing fines for violations from EUR50,000 to EUR100,000 to enhance deterrence.
By tightening regulations around rent gouging, the BBU aims to clarify which entities are operating ethically within the market. They assert that their member companies represent the social housing sector and constitute 50% of Berlin's rental market. However, some firms, such as Vonovia, have faced scrutiny over controversial rent increases linked to newly added amenities, which courts have deemed unlawful in certain cases.
As the BBU navigates these multifaceted challenges, it remains focused on fostering a sustainable and equitable housing market for Berlin's residents.