Germany's Rental Market: Short-Term Rentals and Rent Control Concerns

Anyone who has tried to find an apartment to rent long-term in one of Germany's big cities knows that it isn't easy — even with an above-average income and impeccable credentials. Browse through online property portals and you will likely find hundreds of apartments on offer in the most sought-after districts of cities likeBerlin,MunichandHamburg. But look more closely and the majority of those will be short-term, furnished rentals charging well above the standard rates landlords can ask for open-ended leases on unfurnished apartments. That's because an increasing number of landlords are using short-term leases and furnishings — however basic — to justify higher rents and circumvent rent control laws. Furnished apartments cost on average twice as much as regular apartments in the German capital, according to a study by Investitionsbank Berlin (IBB). A fully-furnished, 20-square-meter (215-square-feet) apartment in the newly built Haven's Living apartment complex in the Berlin district of Charlottenburg is currently advertised for €1,349 ($1,600) per month — over €67 per square meter. To view this video please enable JavaScript, and consider upgrading to a web browser thatsupports HTML5 video Now the Justice Minister, Stephanie Hubig of the center-leftSocial Democrats (SPD), wants to protect tenants from this type of exploitation. The first draft of the proposals, have been seen by public broadcasterARD, they include the following points: "As is so often the case in politics, this is a middle ground [solution]," said Armin Hentschel, a sociologist and director of theInstitute for Social Urban Development (IFSS)in Potsdam. Hentschel is one of the authors of a 2025 IFSS study on the Berlin rental market commissioned by the Berlin Tenants' Association (BMV). It found that furnished apartments already accounted for more than 40% of all rental listings within Berlin's S-Bahn Ring in 2018. That had risen to 52% by 2022. Although rent control law also applies to furnished apartments, in most contracts the surcharge for furnishings is not itemized separately and regularly abused — simply providing a bed, table and chairs can drive rents sky high. To view this video please enable JavaScript, and consider upgrading to a web browser thatsupports HTML5 video Another huge problem in Berlin is the abuse of the temporary use clause, which exempts short-term rentals from tenant protection and rent control laws. Only 7% of the rental agreements reviewed in the IFSS study were for a fixed term of six months or less. These types of rentals have fast become a business model: the vast majority of those who rent out short-term furnished apartments are professional agencies with multiple apartments that repeatedly list them on the relevant platforms. Only about 25% are private individuals who, for example, rent out their home for a limited time due to travel or work abroad, according to the IFSS study. The rapid rise of rental platforms such asAirbnbmeant renters in Berlin were being squeezed as landlords opt to rent out properties on a much more lucrative daily or weekly basis comparable to hotel prices. "We're also talking about tourists who are now being catered for from parts of the ordinary rental sector. People are competing with the long-term residents, which doesn't make sense," Hentschel told DW. Alexander Reisenbichler, a political scientist at the University of Toronto and author of the book "Through the Roof: Housing, Capitalism, and the State in America and Germany" agrees that the Justice Ministry's proposals are a "step in the right direction" but would not solve the housing crisis in Germany. "Politicians are not willing to use enough money to solve the problem," he told DW. Germany had been here before when it faced a massive housing and affordability crisis in the post-World War IIyears, Reisenbichler explained — a crisis it solved with ambitious policies and large-scale investment in social housing. In 1975, there were around 6 million social housing units inWest Germanyalone. That figure is now down to just 1 million across reunified Germany. "It seems that today we're not able to muster the political will and adopt smart policies as we did in the past," Reisenbichler said. "I know that that is politically and financially costly, but it makes a real difference for people, and I think it's also a way for mainstream parties to be serious about people's problems and to counter the growing popularity of the AfD [Alternative for Germany]." To view this video please enable JavaScript, and consider upgrading to a web browser thatsupports HTML5 video The German Tenants' Association (DMB) has said it "wholeheartedly welcomes" the draft proposals, which it considers "an absolutely crucial and long-overdue proposal for better tenant protection." It said that the proposed six-month limit on short-term rentals was "a step in the right direction," but wants tighter regulations on the number of short-term rentals each landlord may be permitted to offer. However, the proposals have drawn criticism from the German Property Owners' Association (Haus & Grund) which called it "a further attack on the functioning of the rental housing market" and "a vote of no confidence" in private landlords. It predicts that new rules regarding surcharges on furnished apartments would mean a massive increase in bureaucracy and "reduce the availability of flexible housing options." Meanwhile, renters in Germany will have to wait a while before the latest proposals become law: they must first go through consultations with various associations, then be approved by the cabinet before heading to theBundestag. The Justice Ministry has not committed to a specific timeframe. Edited by Rina Goldenberg While you're here: Every Tuesday, DW editors round up what is happening in German politics and society. You can sign up here for the weekly email newsletter, Berlin Briefing.