Interview with Christian Deutsch “Modernization is a contribution to climate protection”

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Many tenants ask themselves: When is a building renovated, when is it modernized - and why? In an interview, HOWOGE expert Christian Deutsch talks about the differences, motives and financing of various measures.

Repair, renovation, modernization – what is the difference?

If it is a matter of minor repairs within the apartment or building, it is referred to as maintenance. The classic example is a dripping faucet. Larger measures that restore an apartment or building to its original condition are part of renovation. This involves, for example, removing defects or damage to the building structure. This can affect the facade, roof, balcony, sewage pipes, electrics or floors. Put simply: if something breaks, it is repaired. Modernization, on the other hand, improves the condition of the property.

That means?

These are measures that improve the quality of living or save energy and water in the long term and thus make a contribution to climate protection. This could be, for example, replacing the old oil heating system with an energy source from renewable energies. Modernization is therefore always about upgrading. Replacing broken windows is a repair. Replacing broken windows with new soundproof windows with double-glazed glass is a modernization.

And then there is also the energy renovation ...

Yes. An energy renovation is usually the modernization of a building to improve energy consumption, for example for heating, hot water and ventilation - so ultimately also a form of modernization.

When and why does HOWOGE decide that a building will be modernized?

As part of Berlin's climate protection policy, there is a concrete modernization roadmap that reflects the various requirements for climate neutrality. Our long-term goal is to make HOWOGE apartments and buildings climate neutral by 2045. The key starting points for this are increasing the energy efficiency of our buildings, using renewable energies and saving energy. Climate protection is therefore an important decision factor for the modernization of a building.

What else will be decided?

The high demand for affordable housing combined with the sharp rise in construction and financing costs are two of the biggest challenges. This means that we must also decide whether and when to modernize based on economic criteria.

Does such a measure automatically mean a rent increase?

No. If the renovation does not include any improvement to the current standard in accordance with Section 555b of the German Civil Code, there will be no rent increase. If modernization measures are part of the renovation, these will be implemented proportionately in accordance with the cooperation agreement “Affordable rents, new housing construction and social housing provision”.

Does that mean that the tenants are responsible for modernization?

When allocating modernization costs according to Section 559 of the German Civil Code, the maximum increase in rent is two euros per square meter of living space per month within six years. In the end, however, it is often less.

What do you mean?

When the costs are allocated to the rent, the noticeable energy savings in the second rent, i.e. the operating costs, are not yet taken into account. Here, however, the tenants themselves have the leverage. As a company, we can only provide the basis for a good ecological footprint with our measures. The use of the building by the tenants is then crucial for the actual energy balance. We can insulate our buildings and equip them with the latest energy technology, but if the triple-glazed windows are left tilted and the heat escapes, the positive energy effect fizzles out.

How and when are tenants informed about modernization?

Tenants are informed in writing no later than three months before the start of a modernization by means of a so-called modernization notice. The notice must describe the nature and expected scope of the measure in key features. In addition, the expected start and estimated duration of the modernization measure must be set out. The expected rent increase after completion of the measure is also part of the information - with a possible deviation of ten percent.

To person

Name:Christian Deutsch Position:Head of Asset Management In the company since:01/2024