The new bill on the rent ceiling, which the Black-Green government agreed on, has received sharp criticism from the opposition parties SPÖ and FPÖ and from the tenants’ association. Criticism is expressed, among other things, that the amendment contains hardly any improvements.
In the longer term, there is even fear of a “systematic deterioration of the situation”. The government’s proposal for a rent ceiling will be discussed in the building committee on Tuesday.
SPÖ: The increase has just been postponed
“Nothing has changed at all for target rents compared to the previous government draft,” the SPÖ criticized in a press release. “Guideline rents would not have been increased in 2024 anyway – not even under the current legal situation.” Moreover, according to the government proposal, the increase in category rents may only be postponed and not suspended.
“The 2.5 percent limit on rent increases that the government is talking about does not appear anywhere in the entire text of the law,” lamented SPÖ club president Philip Kucher.
FPÖ: too little, too late
For the FPÖ, the rent ceiling comes too late; After all, high inflation is already priced into the rental prices. As previously announced, the FPÖ does not agree with the black-green rent ceiling, the PVV announced in a press release. Instead, a separate package of measures was introduced in the building committee.
The tenants’ association sees improvements in the short term, but in the long term there is a systematic deterioration for many tenants. “The presented rent ceiling is one step forward and four steps back,” complained Georg Niedermühlbichler, chairman of the Austrian Tenants Association.
Tenants’ association with damning verdict
“A step forward because the government’s actions finally admit that rent levels in Austria have become a problem. Four steps back because it is regrettable that firstly, even after years, no solution has been found for unregulated rental contracts, secondly, category tenants, thirdly, benchmark tenants and fourthly, cooperative tenants are systematically worse off than before due to the annual increase.
The presented package stipulates that regulated rental prices will in future be increased annually by the inflation rate, instead of only every two years as before. Opposition parties and the tenants’ association complained that the 5 percent annual increase limit was also too high, as experts estimate inflation is likely to be significantly lower next year.
There was also unanimous criticism that, contrary to announcements to the contrary, the free rent did not also fall under the rent ceiling. Moreover, company rents were forgotten.
The government wants a ceiling of five percent
The ÖVP and the Greens want to limit rent increases for legally regulated rental agreements to a maximum of five percent within two years in 2024 and 2025. This applies to category, benchmark and community rents, which affect approximately 590,000 households, according to government figures.
For non-profit apartments (approximately 660,000 households), where rents would rise particularly sharply in 2024 based on inflation in 2022 and 2023, the increase should be limited to five percent. In subsequent years, increases must be limited to a maximum of five percent.
New scheme from 2027
A new valorization system will apply from 2027. The inflation of the previous year may no longer be used for rent increases, but for the average price increase over the past three years. If this value exceeds five percent, tenants only pay half of the excess.
According to the coalition, a total of three quarters of all rental apartments should benefit from the ceiling. Free rental contracts, more than 400,000 households, are not covered by the measures.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
