The German Property Federation (ZIA) has explicitly welcomed the announcement by Federal Minister of the Interior Alexander Dobrindt regarding a planned Investment Protection Act. The initiative aims to link interventions in the form of socialisation to particularly strict legal criteria and to define clearly the constitutional framework under Article 15 of the Basic Law.
ZIA President Iris Schöberl described the initiative as encouraging news for house hunters as well as private investors. In the association's view, reliable legal framework conditions and predictable property-related risks form the foundation for long-term capital in existing properties and new-build projects. Reliable property protection establishes the necessary basis for continued investment in new residential construction, benefiting the entire business location.
High hurdles for interventions in private property
The key points set out in the draft bill define the socialisation of rental homes strictly as a last resort. Such a step requires its compelling necessity to be explicitly and comprehensibly demonstrated. It must also be verifiably established beforehand that all alternative instruments to ease pressure on the housing market have been fully exhausted.
- —Proof of the compelling necessity of an intervention as a final remaining resort
- —Prior exhaustion of all construction-related and subsidy-policy instruments for creating housing
- —Determination of any compensation strictly based on the market value established by independent expert appraisals
- —Immediate and full compensation payment in cash
Regarding financial compensation, the key points stipulate bindingly that compensation must without exception be paid on the basis of actual market value. To protect owners' interests, this value must be determined by an independent appraisal. In addition, payment must be made in full and directly in cash to rule out financial disadvantages for the affected property holders.
Call for swift legislative implementation
Iris Schöberl urged that the outlined key points now be converted into legally sound legislation without delay. The most effective tool against persistent housing shortages and rising rents remains the actual expansion of building activity. Rather than protracted debates over socialisation, politicians must noticeably accelerate planning approval processes and provide targeted support for new construction.
