DThe latest rental policy measure by the federal government, protection against dismissal extended for the period of the corona crisis, is certainly correct – tenants must be protected from the economic effects of the pandemic. At the same time, however, these measures are part of a group of tenant protection laws that have already been passed this year completely independently of Corona: the rent brake was extended and tightened in mid-February; the rental cover came into force in Berlin at the end of February; The observation period for the calculation of the customary comparative rent was extended from four to six years at the beginning of January.
These are three major cuts in rental policy that have been implemented in the past few weeks alone. Things are moving fast, the price growth of asking rents has long since slowed down, in some cases stagnating or even falling. Anyone who wants to live for long term rent cannot say that politics doesn’t care about him.
The home ownership rate in Germany is 46.5 percent. Sure, that’s little, far too little, especially when you look at our European neighbors, who almost all have a much higher ownership rate. But 46.5 percent also means that almost half of German households own homes. These are not large corporations, not anonymous investors, but private households, average Germans. Where can they be found in the housing policy decisions of recent years?
Three out of four Germans are or would like to be owners
Not to forget those who do not own a home, but would like it: 51 percent of the non-owners would like to own a home, according to a representative YouGov survey commissioned by the IVD. This means that around three quarters of Germans are either homeowners or want to become homeowners. This majority of the population is politically ignored.
Promoting home ownership was actually the Federal Government’s stated wish when it took office during this legislative period. Apart from the admittedly multi-billion dollar child benefit, nothing else happened. Only the reform of the brokerage commission, which the government has agreed on, should be mentioned otherwise; but firstly it is more symbolic than it actually helps apartment buyers, and secondly it does not really require any efforts by the state, as would be the case, for example, with a reduction or an exemption from real estate transfer tax.
Home ownership has such a difficult political and social status because it is primarily seen as individual happiness and individual (financial) security. That is also true, the consequences of the corona pandemic are showing this even more strongly: homeowners feel increased security in times of crisis; financially, because they have a comparatively crisis-proof fortune behind them, but some certainly also emotionally, because their own four walls are gaining in importance again given the curfews.
But homeowners also have social responsibility and take on duties. That’s okay, that’s the way it should be – ownership obliges, and many landlords are taking on this responsibility right now in this crisis and are approaching their tenants. Home ownership has not only a personal, but also a value for society that must finally be recognized and promoted.
We need KfW guarantees
And politics has very efficient funding options. It is one and a half years until the next (regular) Bundestag election; Time enough for the grand coalition to push something further. The first priority should be the KfW guarantee agreed in the coalition agreement, but still not implemented.
The KfW guarantee replaces equity, which in turn is the biggest hurdle when it comes to acquiring property. The real estate loan is not the problem, on the contrary: the interest is so low that the monthly expenses from interest and repayment hardly exceed the usual monthly rent or not at all. But if you take the rule of thumb that you should bring at least 20 percent of the purchase price yourself when buying an apartment, that would be 60,000 euros for a 300,000 euro condominium. Added to this are the ancillary costs, which make up around 13 percent of the purchase price, depending on the state. Saving both (and a small buffer) is a problem, even for normal earners. The KfW guarantee would significantly reduce this hurdle.
If the real estate transfer tax, which has been increasing steadily since 2006, was then reduced or extended by a tax-free allowance for owner-occupiers, numerous households would suddenly be able to acquire residential property. An examination of the real estate transfer tax is also in the coalition agreement, without anything ever having been seriously examined. In addition, improved income tax deduction options, which are currently almost exclusively reserved for landlords, would be an efficient funding option for owner-occupiers, as was also recently found in a Bundesbank study.
In short: the possibilities are there, some plans are already available. But if no one cares about the implementation, politicians should perhaps be honest and admit that they have little interest in actually making tenants owners.