‘We can no longer afford to stand still’

Chairman of the Board Franz-Xaver Corneth outlines the situation on the housing market and notes that there is much discussion but little action  

Dear members,

Looking back over the past year and comparing it with 2023, I wonder what happened to all the hopes we harboured at the beginning of 2024. Have they been fulfilled? Or has the situation even worsened, especially on the housing market? 

The tenants' association - together, digital and close to people 
But let's start with us - the Cologne Tenants' Association: after membership figures have risen continuously over the past six years and we have been able to announce record membership figures over the past three years, we have now had to report an extremely small loss. This is due to the temporary restriction on membership, which we decided to impose with a heavy heart at the beginning of 2024. The tenants' association wants to offer all tenants a home and provide them with advice and support. By the end of 2023, however, we had also reached our limits. 1,466 more members than in 2022 meant longer processing times and appointment bottlenecks. In order to avoid this and ensure the high quality of our advice, we had to limit admissions, which is why no new members could be accepted in January and February 2024. Because anyone seeking advice from us deserves our full attention. We move with the times. Our goal is to become the most digital tenants' association in Germany. We are working flat out on this. An online portal for making appointments and the introduction of electronic files in 2023 were major steps in the right direction. Admittedly, not everything went smoothly. Some of us first had to get used to the new technology - and I'll be frank: I'm not part of the ‘digital native’ generation either. But we have familiarised ourselves with it, trained ourselves and made improvements. In any case, the electronic file is a constant work-in-progress that requires the support of qualified IT specialists. Facing up to the challenges of the times naturally means dealing with the topic of artificial intelligence (AI). It would be foolhardy not to include it in our thought models. AI cannot and will not replace us in the future, but it will support us. However, a tenancy is more than just the use of paragraphs, it is a long-term relationship that requires knowledge, but also sensitivity and tact. There are large housing associations for whom tenants are just seventeen-digit transaction numbers. The person in charge is often not even based in Cologne or the surrounding area, but in Düsseldorf, Bochum or even in another federal state. Sometimes there is even a corporation abroad behind it. Personal circumstances and backgrounds are not known to this clerk. Rent increases are announced and the rent cap is stretched to the upper edge of the lower lip without anyone ever having been in the flat or knowing the specifics of the flat or the neighbourhood (our legal advisors are confronted with such letters on a daily basis). Here too, consultation with the member is required in order to stand up to them jointly and effectively. A sure instinct is all the more important if the tenancy has been in place for many years and involves people who know each other personally. Legal advice primarily relates to legal aspects, but should not be limited to these. Our legal advisors are also carers with understanding and heart. I pay attention to that. I always say that a rough block needs a rough wedge. But if the block is not that rough, it doesn't need an axe, but rather a file and sometimes even just a file. Call me a romantic, but I stand by that. Exploring the nuances of such a tenancy, embedded in legal structures, requires people, carers with brains, but also with heart and the necessary sensitivity. No AI in the world can replace that. 

Lots of promises and ideas, but little realisation 
Let's come to the harsh reality of the housing market: the situation is catastrophic and has been for years. Rents are skyrocketing, living space is becoming even scarcer and affordable flats have become a rarity in Cologne and the surrounding area. I ask myself: how much longer are we going to stand by and watch? Last year, I already criticised the fact that too much bureaucracy is preventing the creation of new housing. Last year, I mentioned that the state building minister Ina Scharrenbach correctly recognised this when she described the streamlining of standards as a key issue and noted that some of them even contradict each other. These standards must now be scrutinised in order to eliminate superfluous bureaucracy in construction. Discussion alone is not enough. The same applies to the popular fad of renting out furnished flats in order to make the price go through the roof and to make it more difficult to calculate a breach of rent restrictions. Last year, there were already discussions about including furnishing surcharges in tenancy agreements. Efforts were already made last year to bring about a legal change. The endeavours have not materialised, the status quo remains unchanged ... 

And the rent cap?
Its extension was expressly agreed in the coalition agreement.The traffic light coalition is now history. There was still a cabinet decision in its final phase. However, it remains to be seen whether this will now be enshrined in law in a corresponding amendment before the early federal elections. The rent freeze has been heavily criticised anyway. I am aware of this, of course, as I don't go through life with blinkers on. Its effectiveness is disputed. But why is that? It contains exceptions that prevent its successful application. For example: the principle of the rent freeze is that when re-letting a flat, the landlord may demand a maximum rent of the local comparative rent plus ten per cent. Sounds good at first. Unless the basic rent was already above the ‘comparative rent plus ten per cent’, in which case the landlord may continue to demand the previous rent as an alternative. This means that the landlord who has already demanded and received too much is also allowed to do so when concluding a new contract. The rent freeze therefore needs to be reformed. Under no circumstances, however, should this instrument be lost in extremely tight rental housing markets. Keyword rent overcharge in accordance with Section 5 (2) of the Economic Offences Act: Often referred to as the ‘rent usury paragraph’, it is long overdue for reform and has been a popular topic of discussion for some time. Has it been reformed? Of course not (yet). It begs the question: Who are we actually making policy for here? In the summer of 2024, Federal Building Minister Klara Geywitz announced that she wanted to encourage people in Germany to move to rural areas or smaller towns in order to counteract the housing shortage in metropolises. She emphasised that there are around two million empty flats in Germany, while there is a considerable shortage in the metropolises. She planned to present a comprehensive strategy to combat this vacancy rate by the end of 2024. It should include various measures to make life outside the metropolises more attractive. In November, she met with representatives of eastern German housing associations to discuss the key points of a planned action strategy. The minister emphasised that the strategy should now be officially presented in the near future. Germany is still waiting. 

And Cologne? 
We are talking about reforms, measures and changes that are needed at federal level to improve the housing situation. But Cologne can also play its part. This includes in particular the designation of building land. Of course, redensification, adding storeys to buildings, building over car parks, supermarkets, etc. are a perennial issue and should all be considered, but this is not the big picture. We won't be able to do it without land, we finally need to be prepared to designate it as building land. One point that particularly annoys me: vacancies. In June 2024, the census revealed a figure that made me shudder. It was reported that 14,233 flats were vacant in Cologne as of 15 May 2022! Of these, 5,174 had been vacant for twelve months or longer. The average number of people in a Cologne household is 1.87 (source: City of Cologne - Living in Cologne. Facts, figures and results). 5,174 vacant flats would therefore mean living space for almost 10,000 people. There may be many reasons for vacancies. But one thing is clear: the city must consistently record them and hold owners accountable. Living space is too valuable to be left to gather dust unused. Social conservation statutes, popularly known as neighbourhood protection statutes, continue to be neglected in Cologne. We don't even have a handful. Other metropolises are far more proactive. Berlin has over 60, Hamburg over 40, Munich more than 20. If you really want to prevent the population from being displaced from their neighbourhoods, you have to use this instrument. Let's not kid ourselves: There are neighbourhoods in Cologne that have long since been gentrified. The city simply failed to act in time. Let's summarise: It takes courage, determination and better cooperation between the federal, state and local authorities. We can no longer afford to stand still. Nevertheless, I remain an optimist, because there is no alternative to action. But optimism alone is not enough. Actions must follow words. Not tomorrow - now!

Yours sincerely,
Yours, Franz-Xaver Corneth