The city administration in Leipzig plans to implement measures targeting tenants.
City Council Addresses Rent Gouging in Leipzig
Leipzig, Germany – May 21, 2025 – The city council held a discussion on Saturday regarding the issue of rental price manipulation, commonly known as rent gouging. The debate revolved around the responsibilities of municipal authorities in addressing this matter and the proposed measures to strengthen protections for tenants.
The city council meeting was initiated by CDU councilor Falk Dossin, who expressed reservations about the city taking on the task of combating rent gouging. His concerns were partly based on a statement from the social welfare office, which stated that the pursuit and punishment of offenses under Section 5 of the Economic Criminal Code is the mayor's responsibility. The city council, however, has no official involvement in this matter.
Social Affairs Mayor Dr. Martina Münch clarified that the city does indeed have a role to play in addressing rent gouging. If the city receives a report of rent gouging and the offense is confirmed, it is classified as an administrative offense. In such cases, the city must react, typically imposing fines and ordering the offender to cease violating the law. If the offender fails to comply, the matter can be escalated to a criminal offense and taken to court.
The controversy arose due to the lack of awareness and reported cases of rent gouging. Prior to 2024, only one report of rent gouging was received by the city. However, following the launch of a rent-gouging app by the Left party, there have been over 800 reports of suspected rent gouging in Leipzig alone. Despite the app's intended purpose, it has brought the issue of rental price manipulation to light.
The tightened housing market in Leipzig has contributed to the problem, as landlords aim to exploit the shortage of affordable housing by unjustly increasing rents. This is evident in Leipzig, as well as in Frankfurt and Freiburg, where city administrations have already taken action. Leipzig is not the only city facing this issue.
The Chairman of the CDU faction, Michael Weickert, was criticized for blaming the more left-leaning city council majority for the lack of new housing construction in Leipzig. This claim was contradicted by SPD city councilor Christina März, Dr. Elisa Gerbsch (The Left), and Dr. Tobias Peter (Greens), who highlighted the city's efforts to create new affordable housing, particularly in light of ongoing discussions about social housing.
The importance of strengthening municipal powers in tackling rent gouging was emphasized by Dr. Elisa Gerbsch (The Left) and Dr. Tobias Peter (Greens). They advocated for the mayor, as the newly elected president of the German City Council, to push for stronger municipal powers in this area at the federal level. Currently, Section 5 of the Economic Criminal Code is considered insufficiently powerful, with SPD city councilor Pia Heyne referring to it as a "toothless tiger."
The Greens, Left, and SPD have proposed a joint plan to simplify the application of Section 5 of the Economic Criminal Code, remove the burden of proof for exploiting a low supply of comparable spaces, and increase the fine range. The proposal was approved during the city council meeting, with 29 votes in favor, 21 against, and nine abstentions.
Whether the proposals will lead to significant changes in Leipzig's housing market remains to be seen, but they mark an important step in addressing the issue of rent gouging and ensuring fair rent prices for tenants in the city.
- The city council's discussion on rent gouging did not solely focus on Leipzig, as the issue of rental price manipulation has been observed in Frankfurt and Freiburg as well.
- In the context of the general news, the Greens, Left, and SPD proposed a joint plan to reform the Economic Criminal Code to combat rent gouging more effectively, aiming to increase fines and simplify the application process.
- The housing market is not the only factor contributing to rent gouging; politics play a role as well, as the effectiveness of Section 5 of the Economic Criminal Code, considered a "toothless tiger," has been questioned by the councilors.
- In the realm of business and investing, the increased reports of rent gouging in Leipzig can potentially impact the real-estate market, and the proposed regulations could lead to changes in landlord behavior and housing prices.
