Living in Munich: City Council Approves Continued Rent Freeze for 70,000 Apartments
Keeping housing prices under control remains a top priority for Munich, as the city council recently voted to continue a rent freeze for approximately 70,000 apartments. The majority favored extending the instrument across Gewofag and GWG München apartments, which will merge to form Munchner Wohnen in January. According to Mayor Dieter Reiter (SPD), rents in these apartments will remain frozen at an average of 7.92 euros per square meter for privately financed houses and 6.45 euros for publicly subsidized properties.
The long-term tenant structure of these apartments will be examined by the end of 2026, while legal proposals to differentiate rent increases according to household income will be considered. The city council will then reevaluate the necessity of the rent freeze, as many essential workers such as caregivers, nursery school teachers, street cleaners, and refuse collectors reside in the city's apartments.
The Munich Tenants' Association supports the decision, although they believe that a nationwide rent freeze necessitates federal-level intervention.
Context
Rent control measures, like the "Mietpreisbremse" cap, limit rent hikes to 10% above existing benchmarks for new leases. Although these measures are in place, rental prices in Munich and Bavaria are projected to rise due to robust demand and limited housing supply.
Future strategic initiatives
To tackle affordability issues, the following approaches could be considered:
- Enhanced rent control measures: Strengthen existing legislation to mitigate affordability concerns more effectively.
- Company initiatives: Encourage businesses, like Stadtwerke München, to offer free or subsidized housing to attract skilled workers in high-demand sectors.
- Government Support: Increase grants and subsidies for energy-efficient property renovations, which could indirectly lower home costs.
- Non-Profit Housing: Promote regulations allowing social enterprises, associations, and foundations to provide affordable housing with tax breaks.
In conclusion, while rent controls are in place, affordability challenges in Munich and Bavaria are intricate and involve multiple factors. Addressing these issues will likely involve a mix of regulatory changes, company initiatives, and government support for innovative affordable housing solutions.
