The head of human resources at Germany’s largest landlord, Vonovia, Ruth Werhahn, has publicly challenged the current iteration of the government’s rent control measures, highlighting the unintended consequences of a well-intentioned policy. While acknowledging the necessity of some form of social regulation in the face of a critical housing shortage, Werhahn argued that the existing rent cap fails to adequately address the needs of those most vulnerable.
“The rent control currently in place is socially blind” she stated in an interview with Funke-Mediengruppe. “It should primarily protect individuals with lower incomes, not provide blanket protections across the board”. This criticism reflects a growing concern within the real estate sector that the rigid application of the rent cap is stifling investment and innovation while failing to effectively target those in genuine need.
Despite her disapproval of the current rent control framework, Werhahn voiced support for government efforts to crack down on exploitative rental practices, advocating for sanctions against landlords who capitalize on the precarious housing situation. She stressed that punitive measures targeting “rent gouging” should be implemented to prevent opportunistic price manipulation.
However, Werhahn strongly maintains that the ultimate solution to the crisis lies in significantly increased housing construction. She emphasized the debilitating effect of the housing shortage on both individuals and the German economy, arguing that new builds are the crucial lever needed to alleviate the pressure. “The lack of housing is putting a serious strain on people and the economy” she asserted.
Werhahn also connected the recent expropriation initiative in Berlin – which sought to seize properties from large landlords – to the city’s escalating difficulties in providing affordable housing. She attributed the initiative’s emergence to the frustration and desperation of Berlin residents struggling to find suitable accommodation, reiterating that increased construction remains the key to resolving the underlying problems.
“If we address the problems of German citizens, it will strengthen social cohesion” she added, framing Vonovia’s own construction efforts as part of the solution. Interestingly, Werhahn dismissed any suggestion that the criticism stemmed from dissatisfaction among Vonovia tenants, claiming unusually high levels of tenant satisfaction within the company’s portfolio. This assertion, however, is likely to be met with skepticism given the considerable public scrutiny surrounding Vonovia’s business practices, adding another layer of complexity to the ongoing debate over housing policy in Germany.