Associations call for rent index reform

The Association of German Cities, the Association of German City Statistics and the Society for Real Estate Research are calling on the future government to introduce reforms to the creation of rent indices. They emphasize that the rent freeze will only be effective if it is based on reliable, independent and expertly determined comparative rents.

Since a legal amendment in 2022, municipalities 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 the need for a rent index. According to a study by the Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR), 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 a rent index, the rent freeze will remain ineffective," warn the associations and appeal to the potential coalition partners CDU and SPD in a joint statement.

Demand for nationwide rent indexes and more expertise

Associations are calling for local authorities in all tight housing markets to draw up mandatory rent indexes - either in simple or qualified form. In cities with more than 100,000 inhabitants, however, only qualified rent indexes should be used, as they guarantee the highest level of legal certainty for tenants and landlords.

A rent index determines the local comparative rent, which in turn serves as the basis for the rent cap. This limits rent increases to a maximum of 10% above the average value. In their exploratory paper, the CDU and SPD had already agreed to extend the rent freeze for a further two years.

More independence and expertise required

Experts are also calling for greater independence and professional qualifications in the preparation of rent indexes. Due to the great importance for tenants and owners as well as the methodological complexity, a mandatory certificate of expertise for the responsible institutes is essential. In addition, the preparation of a rent index must be independent and free from instructions.

At present, qualified rent indexes only come into force with the approval of tenants' and landlords' associations or, alternatively, by the municipality. This dependency impairs objectivity and opens up opportunities for political influence, according to the criticism.