Germany is showing the world how fair rents can make everybody happy. Could it take off in the UK?
Imagine in a world where private rental prices for apartments stayed static for more than a decade. Where landlords couldn’t either raise your rent or kick you out without permission from the other tenants in your block. Imagine a world where the rent you paid went towards helping more and more people get into the same ideal renting situation as you.
Not in the UK, of course. England is one of two contenders for the origin of capitalism (the other being Holland). And it was a pair of Germans, Karl Marx and Friedrich Engels, who collaborated to co-author The Communist Manifesto, and put forward the idea that capitalism contained the seeds of its own destruction.
So it is fitting that the new model of renting, which excludes the landlord class and promises fairer, lower rents to tenants, is gaining traction as a result of collaboration on the other side of North Sea.
We are, of course, talking about The Mietshäuser Syndicate. It sounds sinister, and for all we know, it might very well be, but it is buying up property for its members all across Germany, and taking houses and apartment blocks permanently out of the reach of professional landlords.
It sounds weird and wacky, and, we’ll be honest with you, the concept was quite difficult to understand from this BBC article which brought it to our attention this morning.
The story focuses on a single apartment block in Munich called Ligsalz8, and we recommend you read it. If you’re in a hurry, here are the key points:
- Tenants form housing associations for an individual building
- The associations join with The Syndicate to form a limited company.
- Tenants pay their rent to the limited company.
- The limited company buys the building
- Once loans are paid off, the rent remains the same, unless the association votes otherwise.
- While the association can vote to re-sell the property, the Syndicate can veto this.
Does that sound realistic to you? Does it sound like something that could actually happen?
Well it has, and by all accounts, it seems to be working. Tenants in Ligsalz8 are paying the same rent now that they were in 2008, while elsewhere in the same suburb, rents have more than doubled.
The obvious question is, After all the loans are paid off, how come the tenants are still paying rent and don’t own their own flats?
The answer is simple. It’s a scheme which relies on goodwill and principles. Specifically, the principle of not ripping as much out of your fellow man as you possibly can.
As far as we can ascertain, from The Syndicate’s website, funds raised by rent are used to finance other building purchases, enabling more tenants’ associations to set their own rents, and make decisions about how they live.
It’s a commitment to a fairer, more equitable society. One where capital doesn’t always get its own way, and where private landlords are quite simply cut out of the system.
Thanks to crowdfunding, bank loans, microcredits, and rental income, The Syndicate has helped to acquire hundreds of properties In the ten years since was founded and has even spread into other European nations.
There’s a certain degree of trust involved. To join the Syndicate requires a minimum deposit / donation of 250 Euros. The maximum they will accept from any individual is 100,000 Euros over a 12 month period. They take steps to avoid being, “obliged to create a sales prospectus or an investment information sheet.”
And each property they help to buy takes one off the market not only for private landlords but also for potential homeowners.
If the Mietshäuser Syndicate continues to grow as successfully as it has over the last decade, privately owned properties will eventually be a thing of the past.
Just like Marx and Engels would have wanted.
Disclaimer: We don’t speak German, and we relied heavily on Google Translate to read documents on www.syndikat.org. We cannot vouch for their accuracy, but we’re fairly sure we got most things right.