Justice Minister Stefanie Hubig from the SPD aims to expand tenant protections through new regulations on indexed rents, short-term rentals, and furnished apartment rentals. This legislative proposal, released on a Sunday, seeks to address existing loopholes that allow landlords to circumvent rent controls. Hubig emphasized the importance of closing these gaps to ensure the effectiveness of the rental price brake, a mechanism designed to limit rent increases for tenants.

The proposal includes specific measures to cap indexed rent hikes, which are often linked to inflation, at a maximum of 3.5 percent annually in areas with tight housing markets, typically in central urban locations. Since 2022, Germany has experienced significant inflation, impacting tenants significantly; however, prior to this, renters benefited from a prolonged period of low inflation, which made housing more affordable. This change aims to balance the needs of both tenants and landlords, ensuring that rent remains manageable while safeguarding landlord interests.

The Union, a coalition partner of the SPD at the federal level, has shown general support for the initiative but has cautioned that the measures should not overwhelm landlords, indicating a need for careful consideration of the financial impact on property owners. By implementing these changes, the government seeks to stabilize the rental market amid rising costs and continue to make housing accessible for those in need.