DGermany’s largest real estate group Vonovia wants to reduce the heating temperature of the gas central heating at night to reduce gas consumption. The company announced on Thursday that the power would be reduced to a room temperature of 17 degrees between 11 p.m. and 6 a.m. During the day it will be heated as usual. The hot water supply is also not affected by this step. There are no restrictions when showering or bathing.
According to the company, the heating temperature should be changed as part of the routine maintenance of the heating systems before the start of the heating season. In a notice for tenants, Vonovia emphasized that with this step, as a responsible landlord, the company wanted to help save gas and limit heating costs. The night reduction would save up to eight percent of the heating effort. Vonovia owns more than 550,000 apartments in Germany, Sweden and Austria. There are also around 72,500 managed apartments.
The landlords’ association GdW also advocates a lower room temperature. If landlords lower the temperature by two degrees, landlords would then only have to guarantee 18 degrees during the day and 16 degrees at night. “I think that a lot of companies would actually do that,” said association president Axel Gedaschko on Thursday.
Interest and construction costs rise
Energy prices present tenants and landlords with a stress test in winter. The large housing companies are now warning of significant cost increases for tenants and are calling for state aid. “The situation is more than dramatic, and social peace in Germany is in massive danger,” said the industry association GdW. At the same time, increased interest rates and construction costs make the goal of building more apartments and thus taking the pressure off rents unattainable.
As a result of the war in Ukraine, energy prices rose by 37 percent by May, according to association calculations. For a one-person household, this means an additional burden of 508 euros per year compared to 2021, for four people 938 euros. However, the companies are expecting higher increases and a significant four-digit additional burden.
According to Economics Minister Robert Habeck, the federal government will use all means to ensure the gas supply. When asked about a possible collapse of the market, the Greens politician said on Wednesday evening in the ZDF program “Markus Lanz” that that would not happen. However, citizens would have to be prepared for an expensive winter. The price increases in autumn and winter would be in the four-digit range per household. “And that can sometimes be a monthly income for a family.”
Habeck and others keep calling for energy saving. According to the GdW, landlords are already informing their tenants about energy-saving heating and ventilation. It also makes sense to limit hot water to certain times, as long as everyone in the house agrees on this. Such a decision by a cooperative in Dippoldiswalde, Saxony, caused a stir.
Many housing companies have already increased the ancillary cost prepayments. Nevertheless, some of the housing companies could face liquidity bottlenecks that threaten their existence, warned the GdW. Tenants and companies should not be left alone in this situation. “In this emergency situation, the state must live up to its social responsibility.” The association proposed state aid funds to limit additional costs.
The GdW primarily represents cooperatives and municipal housing companies, but also listed industry giants such as Vonovia. The members come to about 30 percent of the rental apartments in Germany. “We mainly rent to people who don’t have that much income,” said Gedaschko. They could not afford the high energy prices.
Price explosion, material shortage, staff shortage
According to its own account, the industry is in a hurricane of supply chain problems, changing subsidy conditions, rising interest rates, a shortage of skilled workers and materials and skyrocketing prices. Building is about twice as expensive today as it was in 2000.
In order to earn the necessary money, companies would have to calculate a monthly net cold rent of well over 16 euros per square meter, calculated the GdW. Many members stopped building because of this. “The government targets of 400,000 new homes per year are waste,” said Gedaschko.
According to a survey of the companies organized in the GdW associations, 70.7 percent of them wanted to give up or postpone new construction projects. In particular, the state must become more involved in social housing construction. Five billion euros are required annually, financed by the federal and state governments.
The GdW represents around 3000 housing companies, some of which are in municipal, private or public hands. They manage six million apartments with over 13 million residents. In 2022, for the first time in a long time, socially oriented housing companies such as cooperatives are expecting total investments to fall by 5.7 percent to 19.3 billion euros. At nine billion euros, around one billion euros less will probably be invested in new construction. The GdW companies completed almost 29,000 apartments in 2021, ten percent fewer than in the previous year. This decline will continue in 2022.
