Berlin Senate decides to freeze rent prices for five years

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After months of discussions, the Senate of Berlin has introduced a law to cap rent prices in the capital. The sharp rise of the cost of housing in recent years has led the city government’s red-red-green coalition to freeze all rent increases for five years. This will apply to around 1.5 million flats, which were built before the year 2014. The law is to be finally passed by the city parliament by the beginning of 2020 and will apply retroactively from 18 June 2019.

In the tagesthemen, the governing mayor Michael Müller defended the idea. It is necessary as it is “giving tenants a break”. “It is new legal territory,” he said, justifying the step with the insufficiency of measures previously taken. “We must protect the tenants in large cities better.” Müller reacted calmly to the sometimes fierce criticism of the idea: “New instruments are often controversial.”

Hamburg vs. Berlin

Among the opponents of the rent cap is Müller’s fellow SPD politician Peter Tschentscher. Hamburg’s first mayor said: expropriations and rent freezes would not lead to more housing, but rather undermine private investment in new housing. He pointed out that his city had slowed the rise in rents by other means. For example, the construction of more than 50,000 new flats had greatly relieved the pressure on the housing market.

Müller opposed this view in the tagesthemen. Berlin is also building many new apartments. In the past years, there had been about 60,000, currently 16,000 more per year. “But it should be 18,000 to 20,000 flats,” said Müller, adding with a view to Hamburg: “Measured in terms of size and number of inhabitants, we are not far apart.”

Criticism of rent cap idea

The Berlin CDU called the rent cap a “populist measure”. The law would not be upheld by the Constitutional Court.

The real estate association IVD sees a return to “socialist housing policy” and called the move irresponsible, expecting legal disputes and uncertainties for many years, which would paralyze housing construction in Berlin.

The tenant association spoke of a historical chance to secure affordable rents for large parts of the population.

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