Berlin, First German State to Introduce A Rent Cap

Good news for long term residents in Berlin: the local government has confirmed that from now on housing in the city will be rent controlled. Although previously landlords were prevented from raising rents on old contracts more than 10% above market rates, today’s ruling means that this rule will now also be applied to new contracts.

This is likely to prove to be hugely popular with the city’s long term residents, many of whom have been forced to remain in their rent controlled flats regardless of their changing circumstances. As of today, old contracts coming on to the market will be subject to rent controls, something the council hope will go some way to controlling rental prices in town.

In a city which has seen the average per-square-metre cost of renting go from 5.50€ in 2005 to closer to 9€ today, there is no doubt that Berliners are starting to struggle with rising rents. The ruling, which comes into force immediately, seeks to rebalance things in favour of the city’s renters who make up nearly 85% of all residents, as compared with 50% in London. In an effort to off-set the effects of more than a decade of gentrification that has seen the city transformed, for better and for worse, the rent cap is a positive move for locals and newcomers to the city alike.

In the past two years the average rent in Berlin has increased 7.9% but this figure masks some of the sharpest increases which has meant that some areas are increasing unaffordable (think Prenzlauerberg and Kreuzberg) for the majority of the city’s low and medium-income residents and are pushing locals out toward Wedding, Reinickendorf and Lichtenberg. This pressure on average-income residents to move out of the city centre was something that was once of the first indicators of a housing crisis for locals in London and Paris, and Berlin’s government has proved itself to be responsive to the needs of its residents and a desire to distinguish Berlin from other European big cities by putting renters first.

For locals that has long bemoaned the effect of newcomers to their city, the rent cap should be a welcome balm for an old wound, and for newbies, the dream of low Berlin rents can live on a little longer. For locals and the 40,000 new residents that Berlin welcomes to its burbling mix of cultures, classes and nationalities alike, however, the rent cap represents a move in the right direction: a renter-orientated policy move that reaffirms Berlin’s position as a progressive European capital.

By Sarah Coughlan
Sarah Coughlan is the managing editor of Berlin Logs.
You can find her at: where she hides her academic proofreading business.

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