The Berlin Senate on Tuesday approved a five-year rent freeze designed to tame soaring housing costs in the German capital, bowing to pressure from residents angry that their city has become unaffordable.

In practice, this means rental rates will remain in place on 1.5 million of the city’s 1.9 million homes.

To enforce the rule, tenants who sign new contracts could have them checked by the city to verify that rents have not been raised illegally. Meanwhile, existing tenants who pay a rate that the city deems too high could apply to have their rent lowered. (It hasn’t been decided yet what rates are considered too high.)

The Senator for Urban Development and Housing in Berlin, Katrin Lompscher, said the five-year freeze, which was originally planned to take effect in January 2020, would apply retroactively from June 18. 

The corporate landlords say that the rent freeze will discourage new building to take up demand; historically, Berlin managed this dynamic through the construction of public housing. The rent freeze exempts new buildings.

By freezing rent increases altogether, things will surely get tougher for landlords. Any renovation plans will now have to be approved by the city to ensure that they are genuinely needed. 

Once the new law is in place, renovations will be permitted on the condition that they do not raise the monthly rent by more than €0.50 per square meter. Permits would be granted easily, meanwhile, for such basic essentials as heating system renovation.

Berlin rents have doubled in a decade, rising 7% last quarter alone. Rents nationwide are climbing, and there is a movement for a national rent freeze.

Author: red