Assessment of possible effects of new rental regulations on the rental housing market in Germany
On behalf of Haus & Grund, DIW Econ GmbH has investigated the possible effects of new rental regulations on the rental housing market in Germany. To this end, party positions on proposed housing market regulations were converted into a regulation index and then, using a regression model, the impact of the new regulations on the proportion of tenant households in Germany was estimated.
The results of the investigations show that the proposed tightening of housing market regulations would lead to a significant increase in the intensity of regulation in Germany. In a European comparison, Germany would rise from an already above-average intensity of regulation to the most heavily regulated country in the EU 27 in the areas of rent control and housing regulation. This would be accompanied by an estimated decline in the tenant ratio of -2.4 to around -4.5 percentage points. Contrary to the intended effect of rent regulations, the tenant ratio – i.e. the proportion of households living in rented accommodation – could therefore fall. “Involuntary” evasion possibilities – namely the purchase of a condominium – are to be expected above all from higher-income households. Potential losers are tenant households that are looking for a new flat due to a change in the household situation or a change of residence.PDF Download of this publication