MP Kretschmer and the ministers of state are sitting at the cabinet table in the Saxon State Chancellery (© Matthias Rietschel)

The city of Leipzig is a municipality in which the provision of adequate rented housing to the population is particularly at risk. The cabinet of the ministers of state of Saxony considers this to be the case; a motion of the city administration of Leipzig, justified in this way, was therefore complied with at the cabinet meeting on 9 January 2018. The Saxon state government announced to that:

"Cap for rent increases in Leipzig passed

The goal of the cap is that rents can only be increased by 15 percent within 3 years up to the standard local comparative rent. Without a capping limit, up to 20 percent is possible. In contrast to the rental price brake, the capping limit only affects existing tenancies. The regulation is intended to limit the displacement of economically weaker tenants from desirable residential areas and to make housing affordable for a broader section of the population.

The City of Leipzig has applied for a so-called capping limit ordinance. The aim of the ordinance is to include the city of Leipzig in the capping limit ordinance, just like the city of Dresden.

Background: The possibility for the federal states to lower the capping limit in areas with endangered housing provision was introduced by the German Tenancy Amendment law in May 2013."

In Dresden, the cap has been in force since 10 July 2015, for the time being until 2020. Leipzig followed after a long period of to and fro in the city council meeting on May 17, 2017.

The decision was taken to lower the cap on existing rents to 15 % internally. This was based on a proposal by the Greens, which has been submitted continuously since 2013. The mayor of Leipzig had to submit the corresponding application to the Saxon state government now in order to get the decision made legally binding. The mayor itself had also voted for the lowering. The proposal was approved by the Greens, the Left Party and the Social Democrats with 32 votes in favour, 28 against and 1 abstention.

The application even contained a single sentence explaining why this can be expected of the landlords, namely:

"In view of the currently low interest rates and moderate inflation, a reduction of the capping limit is at present entirely justifiable, also taking into account the interests of landlords."

Irrespective of the postulated threat to the provision of housing in the city, the administration is still advertising job offers in january 2018 with the statement: "A job awaits you in the heart of a city with more than 590,000 inhabitants, which is characterised by a high quality of life, social and cultural diversity and offers attractive housing at comparatively low prices."

The regulation has now been in force since 18 February 2018 and will initially apply until 30 June 2020.

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