Cabinet Extends Rent Price Cap Amid Political Divide

The German cabinet has decided to extend the rent price brake until 2029, aiming to protect tenants in areas with high housing demand. This decision seeks to limit rent increases to the local comparative rent, offering relief to those in strained markets. The move involves tightening exemptions for new constructions and extensively modernized dwellings.

Despite this initiative, the proposal faces uncertainty in the Bundestag, as the governing coalition lacks a majority. The CDU and SPD are at odds over expanding the housing supply, complicating efforts to push the legislation forward. Justice Minister Marco Buschmann has presented a draft law, but the parties remain divided.

The extension has garnered support from associations like the German Tenants' Association, the German Association of Cities, and trade unions, who see it as a vital tool for maintaining affordable housing. However, the opposition remains skeptical. The FDP and parts of the Union have expressed reservations, with discussions anticipated after the planned new elections.

Regional governments will have the authority to designate areas where rent controls apply, reflecting a decentralized approach to housing policy. This decision signals a commitment to addressing housing affordability, yet its passage remains contingent on securing broader political support. As the government pushes for consensus, the outcome will significantly impact tenants and landlords across Germany.