The Political Nature of the Rent Table

Published on 2014/05/13
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The original purpose of the rent table is to reflect the market situation on the ground. However, any market player in the field who is familiar with the methods applied to create a rent table knows that this is not the case. Rent tables are political instruments – or at best compromises negotiated with the industry associations.

Time and again, the fact has caused much chagrin and prompted legal action, yet all of this pales compared to the significance that rent tables will arrogate with the introduction of the rent freeze. The rifts will deepen, and so will the conflict. We will see an increase in the number of law suits devoted to the question whether or not fair methods were used to compile a given rent table, and whether or not it reflects the facts it was intended to deliver.

There is reason to fear that the introduction of the rent freeze will be succeeded, in the next stage, by a law dictating the methods for compiling rent tables. What the Social Democrats and the DMB German Tenant Union want for the future is to let the rent rates of the past ten years enter into the rent table. If this came to pass it would wipe out the rent table’s relevance for good, because it would reduce rent tables to a purely political instrument whose sole purpose is to keep rent rates artificially low. It is perfectly absurd to start by enacting a rent freeze and to define its key terms underlying the new law in a subsequent step.

About the Author

Dr. Rainer Zitelmann is one of the leading experts for the strategic positioning and communications of companies.