Because SPD and Greens are increasingly restricting the rights of owners, more and more are selling their houses to the city of Munich. This is intentional, according to the Munich SPD party leader.
On the one hand, this means cheaper living for some chosen ones at the expense of taxpayers.
The planning department’s officials rejected the plan of Munich’s mayor Reiter (SPD) to support the whole of Munich’s conservation statutes. If she followed Reiter’s instructions, the planning department said, she would be violating the law. Now the law is to be changed.
In July 2019, SPD members of the Munich City Council submitted an application for the Department for Urban Planning and Building Regulations to examine how federal laws have to be changed so that the so-called conservation statutes can be extended to the entire city area.
Instead of increasing the supply of apartments and reducing the burden of city taxes and property taxes for residents – owner-occupiers and tenants – the SPD discovered the conservation statute mentioned in the Building Code as a means of socialist planned economy and gradual expropriation.
The “milieu protection” was originally intended to protect tenants from gentrification of their neighborhood. Munich is one of the pioneers of this measure and in recent years has expanded the number of conservation areas to 23 areas with around 281,000 inhabitants. The maintenance statute extends the already very extensive tenant protection in Germany and thus drastically limits the rights of landlords: “Luxury renovations”, termination of personal use and the conversion of living space are often prohibited. Buyers of residential real estate in conservation area areas can only avoid a municipal preemption right if they make a declaration of avertment, under which they undertake to refrain from conversion into a condominium or modernization.
Radicalization of the SPD at the expense of apartment owners
In July 2019, the SPD tightened the maintenance statute with votes from the Greens and tolerance of the CSU. For example, the new letting rent was capped at the so-called maximum permissible entry rent according to the Munich model rent to 11.50 Eiro per square meter. Rents can then only be increased according to the consumer price index. Since apartment prices in Munich have reached a level that economists at the UBS (UBS Real Estate Bubble Index) currently see as the highest international price bubble, buying an apartment only pays off – if at all – through a corresponding income equalization through future rent increases.
The city of Munich buys private apartments for tax money of 361 million euros
Since this is no longer possible, more and more investors are refusing to sign the declaration of avoidance, which is why the city is increasingly exercising its right of first refusal. If the city had no right of first refusal in 2017 and only one case in 2015 and 2016, the exercise of the municipal right of first refusal increased to eight cases with 383 apartments in 2018. This purchase of the non-additional existing apartments cost the Munich taxpayer around 280 million euros in 2018. In 2019, the number of pre-emptive rights exercised rose to 14 cases with 382 apartments, according to information from the Munich municipal department. By mid-2019, the city had spent 363 million euros on the purchase. “The tightened declarations of avoidance enforced by us in 2018 have led to a significant increase in the right of first refusal, an effect that was definitely intended,” admits Claudia Tausend, Munich’s SPD leader. Her socialist motto: “We want and we will buy back the city bit by bit, because most tenants can only rely on affordable apartments in the long term.” However, for the tax money spent, neither new apartments are created nor can it be proven that these amounts benefit low-income tenants. After all, the tenants’ income is not taken into account in the areas of conservation statute.
The aim is to get more votes from tenants as the largest group of voters in the city for the local elections in March with a freeze on rents and nationalization. But the hand-trick also works at the tenant’s expense: the expensive campaign can only be implemented through higher taxes or debts, which the tenants also have to bear through the high property tax. In addition, there is no money for really needy households, new apartments and scares away private investors, which is why the housing shortage is increasing.