At its meeting on 14 February 2025, the Bundesrat approved a bill to extend the rent cap until the end of 2029. The German Tenants’ Association (DMB) expressly welcomes the chamber’s decision and calls for swift implementation: “It is very encouraging that the federal states are giving the rent cap the backing it needs; it is now the Bundestag’s turn. We expect the bill to be adopted quickly by the new Bundestag after the election,” says Lukas Siebenkotten, President of the German Tenants’ Association.
Several federal states tabled the motion
The bill will initially be submitted to the still-serving Federal Government, which may issue an opinion within six weeks. The bill must then be forwarded to the Bundestag. The motion by the states of Hamburg, Bremen, Mecklenburg-Western Pomerania, Lower Saxony, Berlin and Brandenburg provides for the rent cap to be extended until 31 December 2029 and introduces new duties for the states to justify the designation of areas with tight housing markets.
“One third of Germany’s population lives in a city with a rent cap, and at the end of 2025 it is due to disappear for good. Without the rent cap, there is no effective protection against extortionate rents, and the pace of rent increases seen in recent years will accelerate significantly once again. Abolishing the rent cap without a replacement is a blow to everyone who cannot afford an even more expensive rented home. It will then become difficult or impossible for ordinary earners such as tradespeople, nurses and police officers to live in the city where they work,” says Siebenkotten.
Haus & Grund says the rent cap has failed
“When politicians and lobbyists now call for tougher rules, it shows that they are ignoring the facts,” says association president Kai Warnecke. The problems in the rental housing market were caused by insufficient supply and high construction costs. Local and state authorities, in particular, had failed to do their homework in recent years. “There is too little building land, and what is newly built cannot be let at affordable rents. Further regulation of rents under new and existing tenancies would make the shortages even worse,” the association president warned.