Associations demand revision of rent indexes

Rent indexes in Germany must become more reliable

The German Association of Cities, the Association of German City Statistics and the Society for Real Estate Research are calling on the future government to introduce reforms to improve the way rent indexes are drawn up. An effective rent freeze is only possible if it is based on well-founded, independently collected and properly determined comparative rents.

Since 2022, cities with more than 50,000 inhabitants have been obliged to draw up a rent index. In many smaller municipalities, however, the rent freeze applies without such a rent index being in place. A study by the Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR) found that a total of 347 municipalities were affected at the end of 2024 - including 106 smaller medium-sized towns (20,000 to under 50,000 inhabitants), 173 small towns (5,000 to under 20.000 inhabitants) and 68 municipalities with fewer than 5,000 inhabitants.

"Without reliable rent indexes, the rent freeze will remain ineffective," warn the associations and call on the CDU and SPD to take action in a joint statement.

Rent indexes should become comprehensive and legally secure

The Association of German Cities, the Association of German City Statistics and the Society for Real Estate Research are calling for local authorities to make rent indexes - simple or qualified - mandatory for all tight housing markets. In cities with more than 100,000 inhabitants, however, only qualified rent indexes should be drawn up, as only these guarantee optimum legal certainty for tenants and landlords.

The rent index defines the local comparative rent and forms the basis for the rent cap, which limits rent increases to a maximum of 10% above this value. In their exploratory paper, the CDU and SPD had already agreed to extend the rent freeze for a further two years.

More expertise and independence required

In addition, experts are calling for greater independence and professional qualifications in the creation of rent indexes. In view of the great importance for tenants and owners and the methodological complexity, mandatory proof of expertise for the institutes commissioned is essential. In addition, the creation of a rent index must be independent and free from political influence.

Currently, qualified rent indices can only come into force with the approval of tenant and landlord associations or, alternatively, by the municipality. This dependency impairs objectivity and opens the door to political influence, the associations criticize.

The traffic light government of SPD, Greens and FDP had initiated initial reforms for rent indexes in 2022, but no longer implemented planned further improvements.

Source: IZ online, 13.03.2025