Germany’s second largest private real estate group, LEG, prepares tenants for hard times. “I believe that in the current war situation, the population in Germany must be made aware that renunciation is now the order of the day,” LEG boss Lars von Lackum told the “Handelsblatt”. “And that will be a renunciation of heat – you have to say that politically.”
Putting on an extra sweater in your own four walls may not be enough. “A warm blanket will probably be needed.”
Von Lackum stressed that it was important for Germany as an industrial country to find ways to keep its own economy productive during the gas crisis. That is why politicians must now quickly pour the people clean wine and make it clear that renunciation is necessary. “We don’t benefit if we’re all warm privately, but nobody goes to work anymore because the companies are shutting down production in droves.”
“We need a legal way for the winter to be able to lower the temperatures more than before,” said the manager. “Without hard decisions, we will run into big problems in winter.”
The decision must be made quickly. Because the conversion of the heating systems will take months.
The industry leader Vonovia had already announced at the beginning of the month that it wanted to save gas and reduce the heating output in many of its apartments at night. “In order to save as much gas as possible in our stocks, we will successively introduce a night-time lowering of the heating temperature for the gas central heating systems in our stocks,” Vonovia had announced.
Vonovia reduces the heating output between 11 p.m. and 6 a.m. to 17 degrees Celsius. During the day and in the evening hours, the tenants could continue to heat as usual.
55 percent of the heating systems in Vonovia’s portfolio are supplied with gas. Vonovia boss Rolf Buch had warned against significantly increasing utility bills in view of the rapidly increasing energy costs in the wake of the Russian invasion of Ukraine and the sanctions from the West.
The LEG boss expects that the tenants of the housing giant will have to pay “an additional one to two months’ rent” in the utility bill next year due to the high gas prices. “It will overwhelm many financially,” he warned.
As in the Corona crisis, LEG will offer installment payments or something similar, but that is only temporary help. “We assume that up to 20 percent of tenants nationwide can no longer get the problem with energy prices under control financially alone,” von Lackum warned.
A moratorium on layoffs is therefore a sensible measure. In the end, however, the situation would not be manageable without state aid.