In an effort to slow the gentrification of the city, Berlin is freezing or lowering rental prices on over 1.5 million apartments for five years. The measure was approved Thursday, January 30, 2020, by lawmakers, and will take effect next month, to the delight of many, especially lower-income and older residents, who are being forced out of their homes by rent increases.
As reported by The New York Times, Katrin Lompscher, Berlin’s senator for city development and living, said, “We have created an instrument that will stop the partially absurd price developments for the next five years. It is up to politicians to create the basic conditions for lower- and middle-class earners to be able to afford to live in Berlin.”
The law will cap rents in the city at 2019 levels, and also limits how much can be charged based on the apartment’s condition and amenities. According to Lompscher, the aim of the freeze is to ease the pressure on renters during a period when rental prices are skyrocketing.
Critics, however, believe that the freeze goes against the country’s Constitution, which holds that rents can be set by the federal government. Jürgen Michael Schick, the president of Germany’s Real Estate Association, said, “The rent cap is equivalent to an expropriation and is a catastrophe for Berlin’s real estate market. Limiting and reducing the income from rents will create uncertainty for investors and will ward off real estate developers from investing.”
The tenants of those apartments, however, probably aren’t too sympathetic to Schick’s investment concerns.