There is also a minor incentive problem here, mainly that a landlord can/will often offload the running costs, Nebenkosten, to the renters indefinitely.

That means they are sometimes economically incentivized to choose an option with lower initial cost but a higher running cost. Governments can/do bend these incentives via taxes but it can be hard/expensive to renovate old complexes (and that part cannot directly be offloaded by the landlord).