The German Mietspiegel is a database to determine typical local market rents consisting of newly offered and ongoing contracts. Last year, the German government enacted a new law called „rental brake“, which caps rental prices of re-lettings at the level of a local Mietspiegel in declared areas. Prior to the rental brake, the Mietspiegel only affected rent increases for sitting tenants, whereas the Mietspiegel is now likewise material to initial rents.
This triggered a large and public debate on the proper methodology on creating a Mietspiegel and its database. Some authors call for asking prices as a new database and justify this modification with larger number of cases at little costs. Others supported the idea of an official rental databank. In our paper, we argue against such changes due to legal requirements and potential shortcomings of asking rents. Instead, we emphasize the need of adequate sampling and regression methods to create a Mietspiegel scientifically.
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