Anyone who has tried to find an apartment to rent long-term in one of Germany's big cities knows that it isn't easy — even with an above-average income and impeccable credentials. Browse through online property portals and you will likely find hundreds of apartments on offer in the most sought-after districts of cities like Berlin, Munich and Hamburg.  

But look more closely and the majority of those will be short-term, furnished rentals charging well above the standard rates landlords can ask for open-ended leases on unfurnished apartments. That's because an increasing number of landlords are using short-term leases and furnishings — however basic — to justify higher rents and circumvent rent control laws.  

Furnished apartments cost on average twice as much as regular apartments in the German capital, according to a study by Investitionsbank Berlin (IBB).  A fully-furnished, 20-square-meter (215-square-feet) apartment in the newly built Haven's Living apartment complex in the Berlin district of Charlottenburg is currently advertised for €1,349 ($1,600) per month — over €67 per square meter.

New plans for the rental market

Now the Justice Minister, Stephanie Hubig of the center-left Social Democrats (SPD), wants to protect tenants from this type of exploitation. The first draft of the proposals, have been seen by public broadcaster ARD, they include the following points:

• Landlords must disclose how much has been added to the rent for furnishings. The surcharge for furnishings should be "appropriate" to the purchase price and current condition. 
• There will be a flat rate of 5% of the net rent (excluding utilities) for fully furnished properties.  
• Short-term rental leases will only be exempt from rent control if they are rented for a maximum of six months or less. Tenants will also be required to state why they wish to rent short-term.
• Annual rent increases to so-called "index-linked rents," which are tied to the rate of inflation, would be capped at a maximum of 3.5%.  

Increase in furnished rentals on offer 

"As is so often the case in politics, this is a middle ground [solution]," said Armin Hentschel, a sociologist and director of the Institute for Social Urban Development (IFSS) in Potsdam. 

Hentschel is one of the authors of a 2025 IFSS study on the Berlin rental market commissioned by the Berlin Tenants' Association (BMV). It found that furnished apartments already accounted for more than 40% of all rental listings within Berlin's S-Bahn Ring in 2018. That had risen to 52% by 2022.  

Although rent control law also applies to furnished apartments, in most contracts the surcharge for furnishings is not itemized separately and regularly abused — simply providing a bed, table and chairs can drive rents sky high. 

Increase in short-term rentals and Airbnb

Another huge problem in Berlin is the abuse of the temporary use clause, which exempts short-term rentals from tenant protection and rent control laws. Only 7% of the rental agreements reviewed in the IFSS study were for a fixed term of six months or less.  

These types of rentals have fast become a business model: the vast majority of those who rent out short-term furnished apartments are professional agencies with multiple apartments that repeatedly list them on the relevant platforms. Only about 25% are private individuals who, for example, rent out their home for a limited time due to travel or work abroad, according to the IFSS study. 

The rapid rise of rental platforms such as Airbnb meant renters in Berlin were being squeezed as landlords opt to rent out properties on a much more lucrative daily or weekly basis comparable to hotel prices. "We're also talking about tourists who are now being catered for from parts of the ordinary rental sector. People are competing with the long-term residents, which doesn't make sense," Hentschel told DW. 

A look at history for ambitious policies to tackle the housing crisis 

Alexander Reisenbichler, a political scientist at the University of Toronto and author of the book "Through the Roof: Housing, Capitalism, and the State in America and Germany" agrees that the Justice Ministry's proposals are a "step in the right direction" but would not solve the housing crisis in Germany. "Politicians are not willing to invest in affordable housing at the scale needed to solve the problem," he told DW. 

Germany had been here before when it faced a massive housing and affordability crisis in the post-World War II years, Reisenbichler explained — a crisis it solved with ambitious policies and large-scale investment in social housing.

In 1975, there were around 5 million social housing units in West Germany alone. That figure is now down to just 1 million across reunified Germany. 

"It seems that today we're not able to muster the political will and adopt smart policies as we did in the past," Reisenbichler said. "There's no question that this is financially costly, but it makes a real difference for people. It's a way for mainstream parties to take people's concerns seriously and to counter the growing popularity of the AfD [Alternative for Germany]."

 

Tenant and landlord groups are skeptical

The German Tenants' Association (DMB) has said it "wholeheartedly welcomes" the draft proposals, which it considers "an absolutely crucial and long-overdue proposal for better tenant protection." It said that the proposed six-month limit on short-term rentals was "a step in the right direction," but wants tighter regulations on the number of short-term rentals each landlord may be permitted to offer.  

However, the proposals have drawn criticism from the German Property Owners' Association (Haus & Grund) which called it "a further attack on the functioning of the rental housing market" and "a vote of no confidence" in private landlords. It predicts that new rules regarding surcharges on furnished apartments would mean a massive increase in bureaucracy and "reduce the availability of flexible housing options."  

Meanwhile, renters in Germany will have to wait a while before the latest proposals become law: they must first go through consultations with various associations, then be approved by the cabinet before heading to the Bundestag.

The Justice Ministry has not committed to a specific timeframe.  

Edited by Rina Goldenberg

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