Vonovia CEO calls for reform of rent cap regulation - Vonovia CEO Calls for Rent Cap Reform as German Rents Surge
Rents in Germany continue to rise, with Vonovia, the country's largest residential landlord, reporting an average monthly rent of €8.28 per square meter in the first nine months of 2023, a 4.3% increase year-on-year. Rolf Buch, the CEO of Vonovia, has been vocal about the need for reform of rent control regulations, arguing that the current rent cap arbitrarily limits rents even in tight housing markets.
Vonovia's net profit for the first nine months of 2023 surged to around €3.4 billion, a stark contrast to the €592 million loss in the previous year. Rolf Buch, the outgoing CEO, has been critical of the current rent control policy, describing it as a 'massive intervention' that worsens the housing shortage. He opposes scrapping the rent cap entirely, instead advocating for a redesign to protect the vulnerable while ensuring fair rents for everyone else.
Introduced in 2015, the rent control law (Mietpreisbremse) aimed to curb soaring rents in high-demand urban areas by limiting new tenancy rents to within 10% of the local comparative rent. However, Buch argues that this policy arbitrarily limits rents even for high earners in tight housing markets. He suggests reforming the rent cap to better balance the needs of tenants and realtors.
With the current rent control rules set to last until the end of 2029, the future of Germany's housing market remains a contentious issue. While Vonovia's new CEO, Luka Mucic, has not yet outlined specific plans for reforming the rent cap, Rolf Buch's advocacy for a balanced approach that protects the vulnerable while allowing fair rents for others may shape the debate moving forward.
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