Energy efficiency rules raise financial burden for Germany's tenants – association

Tenants in Germany will be placed under further economic pressure by the new climate action measures, says the German tenants' association Deutscher Mieterbund (DMB) in an article in Welt Online.

The DMB and NGO Environmental Action Germany (DUH) jointly published a 10-point plan to encourage socially acceptable energy efficient renovations in buildings. They propose to classify existing buildings into categories (A to F), depending on their level of energy efficiency. Homeowners would then receive subsidies for renovation according to the building's level of energy efficiency and how soon the renovation is carried out. At the same time, landlords should only be able to pass on four percent of renovation costs to tenants instead of the current eight percent.

Since the beginning of last year, landlords are able to pass on part of the costs for energy efficient modernisation to their tenants, whereas homeowners have been granted new tax incentives for renovations starting from January 2020. Tenants in Germany's large cities are already strained by rising rental costs due to growing demand and lagging construction of affordable new housing, says the DMB, which calls on the government to set aside ten billion euros per year to help tenants finance energy efficient modernisations. The German Property Federation (ZIA) has included considerations of socially and environmentally friendly renovations in its ethical codex, saying "no tenant should lose his or her apartment due to modernisation measures."  

The DUH has also highlighted the problem, arguing that affordable housing and climate action must go hand in hand. "In essence, we need a different, fair distribution of the costs of energy-efficiency measures between landlords, tenants and the state," said Barbara Metz, acting head of DUH, criticising that the Berlin city government’s plans for a rent cap do not contain incentives for landlords to renovate. If modernisation rates continue to drag, tenants will suffer under rising heating costs in the medium term, says Metz.