Coalition compromise: FDP and SPD agree: Rent cap will be extended until 2029

The SPD and FDP have agreed to extend the rent cap beyond 2025.

Coalition compromise: FDP and SPD agree: Rent cap will be extended until 2029

The SPD and FDP have agreed to extend the rent cap beyond 2025. Part of their agreement also includes a compromise on the storage of communications data for investigative purposes, as coalition circles announced on Wednesday. “The blockade is over,” said the SPD parliamentary group. FDP MP Thorsten Lieb said: “The coalition has agreed on the “Quick Freeze” procedure at cabinet level.” In the future, data will be stored in a legally secure and event-related manner.

Part of the agreement is the extension of the rent cap in tense housing markets until 2029, as provided for in the coalition agreement. The traffic light is thus reacting to the continued difficult situation in many housing markets, said Lieb. The rent cap ensures that when a new rental agreement is concluded, the rent may in principle not be more than ten percent above the local comparative rent. The respective state government decides whether the rent control applies in certain areas.

The SPD and the Greens would like to see further changes to tenancy law, some of which are also included in the coalition agreement. According to reports, no changes to the maximum increase in existing rents within a certain period of time (cap limit) or to the further development of the rent index have been agreed with Federal Justice Minister Marco Buschmann (FDP), who is responsible for tenancy law.

The President of the umbrella association of the real estate industry, ZIA, Andreas Mattner, said: "I assume that further tightening is now off the table." Otherwise, housing construction in Germany could come to a standstill for years.

With the “Quick Freeze” procedure, the data is only saved if there is suspicion of a crime of significant importance – such as murder or manslaughter. From the point of view of Federal Interior Minister Nancy Faeser (SPD), this is not enough. She recently advocated for a new, legally compliant regulation for the storage of telecommunications traffic and location data without any reason. Due to legal uncertainties, the old data retention regulation has not been used since 2017.

“The current agreement on the introduction of a quick-freeze procedure will finally implement a central demand of the Green alliance’s civil rights policy,” said the deputy chairman of the Green parliamentary group, Konstantin von Notz. The agreement represents "a move away from mass data storage for no reason and a decisive step towards a security policy that improves law enforcement and at the same time is proportionate and respects the freedom of citizens."

To protect against sharply rising rents, the SPD in the Bundestag has been demanding more commitment from Federal Justice Minister Marco Buschmann for months. The FDP politician has not yet launched any of the projects agreed in the coalition agreement, criticized the deputy parliamentary group leaders Verena Hubertz and Dirk Wiese in February. Time is running out. The rent cap expires at the end of 2025 and the states would need a year and a half in advance for an extension. When asked about tenancy law in recent months, Buschmann usually replied smugly that there were other projects from the coalition agreement that had not yet been implemented - and this meant his demand for the introduction of the "quick freeze" procedure .

Two drafts are now to be written relatively soon in the Federal Ministry of Justice: A draft for data storage, which will then be slightly different than the draft that he presented in October 2022 and which was met with great criticism in the Federal Ministry of the Interior. Since the rent cap is basically an existing regulation that is to be extended, it can be assumed that Buschmann will soon send this draft to the other federal government departments for coordination. Although the two projects have nothing to do with one another, it is likely that they will be approved by the cabinet on the same day.

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