The company’s plans were reported by the newspaper tz. Tenants will begin receiving notification letters in the near future, but not everyone’s costs will go up. This concerns apartments where rent has not changed since 2019, so for many families the increase will be the first in nearly 8 years.
How the moratorium works
In 2019, the city council, at the initiative of then-Mayor Dieter Reiter (SPD), decided to stop raising rents for tenants of GWG and Gewofag. Since then, rent for approximately 71,000 municipal apartments has remained frozen.
Currently, it averages per square meter:
- €7.92 in freely financed apartments;
- €6.45 in subsidized apartments.
Initially, the moratorium was due to expire in 2024, but it was extended until the end of 2026. At that time, Münchner Wohnen, which was formed from the merger of GWG and Gewofag, was also tasked with studying the social structure of tenants. The reason is that rent varies from apartment to apartment, and not only low-income people live in them, while in reality socially vulnerable groups are forced to live in constant relocation between shelters.
How rent could be increased
According to tz, the study has already been completed. All tenants are to be notified of the increase in writing. The law permits rent to be raised by up to 15 percent of the existing amount. This cap is known as the Kappungsgrenze (maximum threshold). In addition, the new payment must not exceed the level specified in the rent index (Mietspiegel).
If the established cap were used in full, the average rent in freely financed apartments would rise from €7.92 to approximately €9.11 per square meter. In subsidized apartments, it would rise from €6.45 to approximately €7.42. This is a calculation based on the upper limit, and actual amounts depend on the rent index. According to available information, no one intends to use the price cap in full.
The size of the rent price cap is not determined by the city government. It has been seeking to lower it for many years, but this matter is regulated by federal legislation.
Who will not be affected by the increase
Tenants who are unable to withstand the increase in payment will, in all likelihood, not have to pay a higher amount. After discussion with residents and upon presentation of supporting documents, the city will waive price adjustments in such exceptional cases.
What happens next
Until the city council approves its plans, tenants do not know for certain whether their rent will increase and by how much. For each person, the main question remains whether they will personally be affected by the rent increase. The amount of the increase for each tenant will depend on the rent index and on the company’s individual decision. According to available information, the city will offer an exception to those unable to pay more, provided they have supporting documents.
The dispute over the moratorium has been ongoing since 2019 and has not yet been resolved. The company and the city continue to weigh the interests of tenants against the need for money to build new housing.
