At a time when the rent control measure colloquially referred to as the “rent freeze” (“Mietpreisbremse”) is being tightened on the federal level and the state of Berlin is seriously discussing expropriations, the state of Schleswig-Holstein has opted for a housing policy approach that is increasingly at odds with the federal stance. The state government in Kiel, composed of Christian Democrats, Liberals and Greens, recently passed several initiatives that are meant to roll back the red tape and to get housing construction up to speed.

Rather than introducing more regulations, the coalition government intends to address the issues on the residential property market by improving the conditions for a faster expansion of the housing supply. For one thing, the members of the coalition announced a reform of the state building code before the end of the year (source: www.haufe.de). It is planned to ease some of the constraints and standards that apply in housing construction.

Rent Freeze to be Abolished

The objective is specifically to achieve a higher densification and, to this end, make it easier to develop open areas and to add extra floors to existing buildings (source: www.ln-online.de). One of the planned measures is to reduce the minimum distances between buildings, another is to waive the requirement to install a lift if you add more floors to a four-storey building. According to Christopher Vogt, the head of the Liberals’ state parliamentary group, there is a potential to create up to 48,000 additional flats just by adding extra floors to buildings.

In future, the state of Schleswig-Holstein is moreover prepared to share in the costs of drafting local development plans. According to Andreas Breitner, the Director of the VNW Association of Northern German Housing Companies, a common building code is being discussed by the city state of Hamburg and the neighbouring state of Schleswig-Holstein.

Also worth noting is the announcement by the state government in Kiel to rescind the rent freeze (source: www.haufe.de). The regulatory instrument would expire by 30 November 2020 anyway, but the incumbent coalition of Christian Democrats, Liberals and Greens would like to terminate it as of 30 November 2019. On the same day, the tightened rent increase cap—lowered from 20 percent to 15 percent—is to expire, too.

Homeownership to be Sponsored

The state-level policy pursued by Schleswig-Holstein is therefore at odds with that of the Federal Government, which remains committed to increasing rather than reducing the red tape. Just a few months ago, it was resolved on the federal level to tighten the rent freeze and to limit the modernisation allocation.

Schleswig-Holstein also intends to actively promote homeownership. To do so, the state plans to make low-interest loans available. It has moreover advocated the introduction of allowances toward the real estate transfer tax, although it would need the support of the Federal Government to do so. But even without Berlin’s consent, the governing coalition in Kiel would be at liberty to lower the real estate transfer tax rate, which is the highest in the country at 6.5 percent – but that does not seem to be part of the plan.