“Living space is available, but distributed unfavourably”

Mr Linke, has living in southern Hesse become a luxury good?

Not necessarily. The demand in South Hesse, like in many other regions of Germany, is much greater than the supply. As an immigration region, living space is in great demand here. This is also available, but is unfavourably distributed.

What exactly do you mean by this?

People who, for example, would like to move to a smaller apartment in old age often do not do so because it is not economically worthwhile to change. The new rental prices are often significantly higher than those of older, larger apartments. Furthermore, the question remains whether it is necessary for so many people to live in Darmstadt and Frankfurt in the future. A better distribution can only be achieved if people also opt for rural areas with good connections.

Especially in large cities, many people work only for the rent – is this true?

Yes and no. That would mean that 70 to 80 percent of income would be needed for rent. It becomes problematic when people in search of new housing do not get what they want. The rents are high, but so are our standards. In case of doubt, these must be reduced. The first steps have already been taken. Shared flats are no longer limited to students, but employees are also looking for space to live in.

In your opinion, what is a reasonable proportion of household income accounted for by rent?

There are different approaches. Often a limit of 30 percent of the net household income is mentioned. However, families with a net income of 1500 euros cannot afford an apartment in Darmstadt or Frankfurt on the free rental market at this rate. There is a lack of housing for this population group. Especially due to the end of the social housing bond of the flats subsidized in the sixties to eighties, many low-cost flats were lost. Here, the public sector has failed to create new housing for many years. Low-cost housing can only be achieved through state subsidies.

How has this percentage changed in recent years?

Rents have risen much faster than the corresponding income levels, especially in large cities and conurbations. In the case of newly rented properties, this is now far removed from what a normal earner can actually afford. They have to do without a city-centre location and rather look around in the surrounding area, which may not yet be as attractive.

What are the reasons for the increase?

This is mainly due to supply and demand. The latter is also determined by what economic opportunities people have. There are certainly groups of people who are prepared to pay cold rents of 15 to 20 euros per square metre. In Darmstadt, the pressure on the rental market is currently growing, partly due to the influx of many students. The number of students has increased by more than 50 percent over the last 20 years to around 40,000 students. Since the number of places in student residences has not risen accordingly, student demand on the free rental market is increasing. Since the supply there has not increased accordingly, this has also caused rents to rise.

How can the pressure be withstood?

There is potential for new buildings in Darmstadt, especially in the area of former barracks, for example in the Ludwigshöhviertel. However, once these opportunities have been exhausted, it will be difficult to realise further new buildings. In that case, the only way to ensure that more living space with good public transport connections continues to be created is to cooperate with surrounding communities.

Are there regional differences in prices in southern Hesse?

Of course. People in the Odenwald can rent at different prices than in the metropolitan region. However, the connections there are sometimes so unfavourable that it is hardly possible for those concerned to settle there if the place of work is in Darmstadt. The Odenwaldbahn gives reason for hope. With it, people can travel to Darmstadt in just over an hour. This will also give these regions an upswing.

What could a concept against the price spiral look like?

More living space has to be created so that prices do not rise so much. Even for people who do not have such high incomes. Bauverein in Darmstadt and ABG Frankfurt are currently working on this. The approach of Tarek al-Wazir (Hessian Minister of Economics, editor) with the “Großer Frankfurter Bogen” is basically correct. However, the local public transport infrastructure needs to be further improved. That means: faster connections by bus and train to create an incentive to live in rural areas as well.

In 2015, the German government introduced the rent brake. This applies to Darmstadt, Dreieich and Mörfelden-Walldorf, among others. Does it actually still apply?

Yes. Landlords can demand a rent that is a maximum of ten percent higher than the local comparable rent when they re-let an apartment. The fact that “black sheep” among the landlords are trying to get a higher rent through illegal tricks will never be avoided.

To what extent does the Corona crisis influence price developments?

It's difficult to say. The Corona crisis is still too young for that. What I can very well imagine is that the activity in the housing market will decrease. Moving companies will probably suffer as a result. Construction work has hardly been affected by the crisis so far.

What do you expect for the coming years? Will rents continue to rise?

In the Frankfurt/Rhine-Main region, I firmly expect this. As long as the amount of time needed to plan and build new apartments does not grow so quickly. The extent to which the figures will rise depends largely on how demand develops and how much new housing the public sector can create.

The interview was conducted by Eric Hartmann/ Darmstädter Echo

Read the whole article in the Darmstädter Echo of 18.8.2020