Consequence of inflation – expensive housing: SPÖ wants to freeze rents until 2025


The high inflation and the energy crisis are increasingly hard on tenants. Value protection clauses are coming into force in many leases and there are also sharply rising operating costs. Indicative and category rents increase with inflation. Inflation recently stood at 10.6 percent (November). The SPÖ is now pushing to freeze rents.

Thereafter, increases should be based on the policy interest rate rather than the consumer price index (CPI). These points should be discussed at the next building committee on Jan. 24, according to the APA. Specifically, according to the ideas of the SPÖ, “all rents should be frozen until 2025”. There should therefore be no more rent increases for the next two years.

In the period after that, index adjustments should no longer be based on the consumer price index (CPI), i.e. inflation, as is currently the case, but on the policy rate of the European Central Bank (ECB) – but they should be “capped at a maximum of two percent “. The central bank’s official inflation target is 2 percent. Corresponding requests from the SPÖ should be on the agenda of the building committee at the end of January. Legislative amendments are required for implementation.

Base rate instead of CPI as a guideline
In any case, according to the SPÖ, inflation should be capped as a guideline for index adjustments. This is because tenants currently pay in this way twice: once directly via the high gas prices on the energy bill and a second time indirectly via the increased rents due to the higher CPI.

An attempt has already been made to curb the huge rent increases by the Austrian Tenants’ Association. In the fall, in the face of ever-increasing inflation, the president, Georg Niedermühlbichler, had demanded both a rent cap and an abolition of value retention clauses in the government’s contracts so that full-blown inflation would no longer affect rents. According to him, rent increases in Switzerland will be limited to 40 percent of inflation. This is also necessary in Austria.

Various countries with caps
According to the Upper Austrian Labor Chamber (AK OÖ), there are already international measures in several countries to limit rent increases. Austria is still too late. Scotland has banned rent increases until inflation has calmed down, the AK said. Spain and Portugal have capped rent increases at 2 percent a year. And France also limited the rent increase – to a maximum of 3.5 percent per year.

Facing the highest inflation in 70 years, the president of AK Upper Austria, Andreas Stangl, recently called on the federal government to legally influence rents, “just as other countries have already done”. Rent caps and the suspension of index adjustments are necessary as long as inflation is this high, he stressed.

ÖGB chairman: “Nothing has happened so far”
So far “nothing has happened at all” with the inflation-reducing measures demanded by the Austrian Trade Union Federation (ÖGB) in March – notably a rent freeze and a reduction in VAT on everyday goods, ÖGB president Wolfgang Katzian criticized for the Christmas vacation. The only response was the ECB’s interest rate hike – and that will still cause loan repayment problems.

In the SPÖ’s current housing policy program, which was unanimously decided by the party board in the autumn, rent reductions are also the declared goal. According to the party’s position, housing – especially rent – should not exceed 25 percent of household income. The SPÖ has also been fighting for some time for universal tenancy law, which should cover all types of rent. This is intended to establish rental ceilings for the whole of Austria.

‘Legal intervention is also needed’
“Housing is a basic need and should not be left to the market and speculation,” emphasized SPÖ Vice-President Jörg Leichtfried. The population must have access to “affordable” housing. “Legal action must also be taken.”

Source: Krone


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