The Federation for the Environment and Nature Conservation (BUND) and the German Tenants’ Association are calling for a fairer distribution of costs for energy-related modernization of rental apartments. “Climate protection in the building sector must be successful and socially fair,” said BUND managing director Antje von Broock on Wednesday.

The two associations want to reduce the so-called modernization levy from eight to a uniform three percent in order to protect tenants from excessive rent increases after apartment renovations. The levy is the share of investments that landlords can pass on to tenants each year.

At the same time, funding for renovations for landlords should be increased in order to create more incentives for more in-depth, climate-friendly modernization, the BUND and the tenants’ association suggest. Landlords should be allowed to keep the state funding in return for the reduced modernization levy.

Higher rents due to modernization surcharge

The modernization levy is eight percent. If funding is used to replace the heating system, ten percent of the costs may be passed on to the tenants. This leads to rents rising, which is particularly a problem for lower-income tenants, said Melanie Weber-Moritz, Federal Director of the German Tenants’ Association. Tenants are currently paying the brunt of energy-related modernizations. The federal government must change that.

The demand is based on the third-party model, which is intended to offer a fairer distribution of costs between landlords, tenants and the public sector. The BUND and the tenants’ association commissioned a study from the Heidelberg Ifeu Institute to calculate this model. “The results of our study show that a reduction in the modernization levy to three percent is necessary for socially acceptable renovation,” emphasized Weber-Moritz.

The study showed that energy-saving renovations for tenants with the third model remained rent-neutral, explained Peter Mellwig from the Ifeu Institute. The costs of the state funding program were not calculated.