SPÖ wants to suspend increases until 2024 and then make them dependent on the key interest rate of the European Central Bank.
Category and reference rents in old buildings have already been noticeably increased twice this year. A further increase will follow at the beginning of next year. One reason is the pandemic, which led to the inflation-dependent adjustment being suspended by law in 2020 and 2021. On the other hand, the rate of price increases is particularly high this year. The combination of both factors is now leading to high burdens for these approximately one million old building tenants. There are also around a million more contracts on the open market, increases for which are also dependent on inflation. The SPÖ now wants to protect tenants from further burdens again.
Specifically, there should be no more rent increases in the next two years. In the period after that, index adjustments should no longer be based on inflation, as is now the case, but on the key interest rate of the European Central Bank (ECB). However, there should be a cap of two percent. This is also the central bank’s official inflation target. Corresponding applications by the SPÖ should be on the agenda of the building committee at the end of January. Legislative changes are required for implementation.
According to the Chamber of Labor in Upper Austria, there are international measures to limit rent increases in several countries. Scotland, for example, has banned adjustments until inflation calms down. Spain and Portugal have capped rent increases at 2 percent per year. France limited rent increases to a maximum of 3.5 percent per year. In Switzerland, rent increases have been limited to 40 percent of the inflation rate.
The SPÖ has also been campaigning for a universal tenancy law for a long time, which should cover all types of tenancy. Austria-wide upper rent limits are to be set. “Housing is a basic need and must not be left to the market and speculation,” emphasizes the vice-chairman of the SPÖ, Jörg Leichtfried.
The FPÖ welcomes the SPÖ’s proposal, but at the same time points out that the Vienna city government itself has increased the benchmark and category rents in municipal housing this year. Therefore, the initiative is not credible.
In fact, according to the real estate industry, there is no obligation to raise it. According to their information, around half of all rental apartments are owned by state or non-profit landlords. These could do without adjustments. The industry also constantly points out that the increases would serve to maintain or refurbish the objects. In particular, thermal renovations and new heating systems would require high investments in the next few years.