Berlin Finds Success in Rent Control Laws
The “rental price brake,” introduced on June 1st, is the city’s most comprehensive tool to date for keeping rent affordable.
By Feargus O'Sullivan
Berlin’s brand new rent control laws are already bringing down costs. That is the conclusion announced yesterday by Germany’s number one real estate site after tallying its latest figures.
Barely a month after the German capital introduced a new set of rules that limits rent increases within a given area, figures collected byImmobilienScout24 show that the average cost of new Berlin rental contracts has dropped 3.1 percent within a month. This can’t be written off as an example of a general countrywide downward trend. In other German cities where such laws haven’t yet been introduced, rents have remained more or less static. This is good news for the legislators of Berlin’s Senate as their new law is doing exactly what they promised the electorate that it would.
The new law introduced on June 1st—called the mietpreisbremse or “rental price brake” in German—works like this. An overseeing body fixes a standard median rent per square meter for each city district, using figures based a biennial state census of rents. No new rental contract within the district is then permitted to charge over 10 percent more than this amount. This still means that price increases for new rentals are possible, but if they come, they happen far more slowly.
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