Anyone searching for a new home and wanting to live in one of Germany’s large cities can certainly confirm how difficult it is to find a suitable apartment or house at affordable prices. In many cities, such as Cologne, housing is extremely scarce. Far too few apartments are being built, while demand continues to rise steadily each year, a trend that is expected to continue in the future. According to a study by the Cologne Institute for Economic Research, the demand for new apartments in Cologne has not been met even halfway since 2016, with only 46 percent of the required housing built. The situation is similar in Mettmann, near Düsseldorf, at 49 percent. Between 2016 and 2018, around 3,100 apartments were built annually on average, while the actual need was estimated at about 6,900 apartments. The reasons for this discrepancy are diverse: the strong influx of people, shortages in staff at building authorities, and strict regulations contribute to this situation.
Additionally, large cities, especially Cologne, seem to be very popular among tourists. Many entrepreneurs and landlords have recognized this, and as a result, many properties are being rented out exclusively as holiday accommodations, for example, through platforms like “Airbnb,” “Booking.com,” or “FeWo-direkt.” In recent years, short-term rental of residential properties has become an increasing problem in certain parts of Cologne, such as the city center, Südstadt, and Deutz, according to the city of Cologne. However, for a long time, the city did nothing about it. It wasn’t until April 10, 2014, that the NRW Housing Supervision Act (WAG NRW) was enacted, and on July 4, 2014, the Housing Protection Ordinance, which was valid until June 30, 2019, came into effect. On May 31, 2019, the Housing Protection Ordinance was revised and extended for another five years, effective July 1, 2019. The law to strengthen housing in NRW (Housing Strengthening Act), which came into effect on July 1, 2021, eventually replaced the aforementioned Housing Supervision Act. On June 24, 2021, the most recent Housing Protection Ordinance was issued under § 12 of the Housing Strengthening Act. This new ordinance made it significantly more difficult to use apartments for purposes other than long-term residence. According to a study, Cologne will grow by almost 41,000 households by 2040, while up to 22,000 publicly subsidized housing units could be lost by 2036. This particularly affects people with low incomes. Publicly subsidized housing is typically cheaper than market rents—on average, the difference in Cologne is €3.09 per square meter.
The following section explains in more detail what the Housing Protection Ordinance is, what is meant by the misuse of residential space, and how the city of Cologne deals with violations of the ordinance.
What is Meant by Misuse of Residential Space?
According to the city of Cologne, misuse occurs when residential space is used for purposes other than living. This is especially the case when, according to § 7 of the Housing Protection Ordinance in conjunction with § 12 (2) of the Housing Strengthening Act:
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- More than half of the available space in the rental property is used for business or commercial purposes,
- The rental property is used for short-term rentals for more than three consecutive months,
- Residential space is eliminated,
- Residential space is altered or repurposed without permission,
- Residential space is left vacant for more than three months.
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Thus, if a rental property is used as an office or commercial space or as a vacation rental, this often constitutes misuse of residential space.
What Does the Housing Protection Ordinance Achieve?
With the Housing Protection Ordinance of June 17, 2014, the city of Cologne took its first steps to address the housing shortage and the misuse of residential space. The ordinance aims to protect against unauthorized repurposing of residential space. It applies to all privately financed rental and cooperative apartments that were used as residential space when the ordinance came into effect or have been designated as such since. Protected properties are those that are objectively and subjectively suitable and intended for living (§ 4 (1) of the Housing Protection Ordinance Cologne). Residential space is not considered protected if it has been continuously used for other purposes since before the ordinance came into effect (§ 5 (6) of the Housing Protection Ordinance Cologne), meaning retroactive measures are excluded. The ordinance introduces a permit requirement to make it more difficult and, ideally, prevent misuse in the future. Fines of up to €50,000 per unit can be imposed for violations. Since 2014, the city of Cologne has reviewed more than 1,500 apartments and imposed fines totaling €510,000. Over 400 investigations are currently pending (as of May 22, 2019). Residential space used by the owner does not count as protected space, nor do secondary apartments. From now on, all misuse of residential space in Cologne must be approved by the city (§ 8 of the Housing Protection Ordinance Cologne). Such permission may be granted if overriding public interests or particularly protected interests of the applicant exist. Permission may also be granted if sufficient replacement housing is provided. The new ordinance adds that replacement housing must be offered at reasonable terms on the Cologne housing market. Rent levels must also reflect local comparable rent in the future.
Why Are Vacation Rentals for Tourists Such a Big Problem?
It is estimated that 7,000 rental properties in Cologne are regularly rented out to tourists and business travelers, and the actual number is likely higher. These are not sublets, such as when a student goes abroad for a semester, but apartments specifically set up for short-term rentals and used exclusively for this purpose—whether for two days for tourists or two weeks for business travelers. Since 2007, more and more rental properties, especially in large cities like Cologne, have been converted primarily for this purpose. Cologne has about 550,000 apartments, but this number is already insufficient. When thousands of rental properties are permanently used for short-term rentals, even though the city of Cologne has a well-developed network of hotels and other accommodations, the housing shortage worsens. Furthermore, rents in Cologne continue to rise sharply and become unaffordable for many people. In summary, the city of Cologne is increasingly reviewing rental properties, meaning that high fines are to be expected for violations in the future.
What Should You Do If Accused of Misuse of Residential Space?
In any case, you should respond and not miss any deadlines. First, check whether the ordinance even applies to the property in question. According to § 5 No. 6 of the Housing Protection Ordinance, short-term rental of residential space is not protected under § 4 of the ordinance if it has been used for other purposes before the periods specified in § 3 of the ordinance. The inclusion of § 5 No. 6 in the ordinance was intended to give due consideration to the principle of protection of existing rights under public law. Protection of existing rights is a legal principle derived from Article 14 of the Basic Law. It grants a legally established status and its use a certain degree of enforceability against new, possibly conflicting laws and requirements.
Additionally, in Cologne, you can apply for a negative certificate for the future. This confirms that no permit is required for the misuse of residential space (§ 12 of the Housing Protection Ordinance Cologne) and provides planning certainty, for example, that the rental property may continue to be used commercially. Moreover, you should explain your communications in detail and clearly to ensure that city staff can handle your case quickly and smoothly.
There is no general answer to this question, as each case may differ. It is advisable to consult a lawyer who can thoroughly examine your case, advise you specifically, and help you avoid high fines.
Is a Building Law Change of Use Application Required When Changing the Use of Residential Space to Short-term Rentals?
When a building is used in a way other than originally permitted, this constitutes an unlawful use. If you wish to change the permitted use to a different type of use, an application for a change of use must be submitted. Otherwise, the relevant building authority may issue a building regulation notice and prohibit the changed use.
In the case of short-term rentals, a distinction must be made between residential use and lodging use for each building. Living is characterized by self-management of household chores, domesticity, and privacy, as well as sufficiently large and equipped rooms. Unlike lodging, residential use is also intended to last for a certain period. Lodging, on the other hand, is characterized by shorter periods of use, less privacy, smaller rooms, and fewer amenities. Payment methods also play a role in this distinction.
Thus, if lodging exists where only residential use was previously approved, an application for a change of use must be submitted to the relevant building authority.
Important Note: The content of this article has been prepared to the best of our knowledge and belief. However, due to the complexity and constant evolution of the subject matter, we must exclude liability and warranty. Important Notice: The content of this article has been created to the best of our knowledge and understanding. However, due to the complexity and constant changes in the subject matter, we must exclude any liability and warranty.
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Lawyers in Cologne provide advice and representation in tenancy law.