New rent regulation in Berlin

The new law prohibits landlords from charging new tenants more than 10% above local average prices

Germany passed a law setting a new regulation on housing rent in Berlin trying to control the fast and sudden rise of rent prices in a city that still is one of the most affordable capitals in Western Europe.

Under this new law, landlords are restrained from asking new tenants more than 10% above the local average price. The system, although already in place in other cities in Europe, is a first for Germany and symbolic for Berlin.

This new step in the regulation is seen as crucial for lower income inhabitants as the average renting price across the city increased of more than 50% during the last decade. For many longtime Berliners, moving from their apartment has become impossible as they can simply not pay for it.

The housing bubble is a consequence of several factors. As the city became attractive due to its affordability in a time of financial crisis and its reputation of creative hotspot, an important influx of wealthier new residents boosted prices. The investments made by international property developers who regarded the German capital as a safe haven in an uncertain European context also had their fair share of responsibility in the inflation. In addition to this, the city suffers of a lack of new affordable housing. It was estimated that Berlin needed to build up to 12,000 housing units every year to contend with a growing population coming from all across Europe looking for better life opportunities.

The government hopes that the new law will have positive effects on the previous alarming situation. Proper, affordable housing is a primary right for locals as well as for international students, artists and vagabonds.

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