Berlin Adopts Five-Year Freeze to Rein In Soaring Rents
Berlin’s plan to rein in the city’s rental market was approved by lawmakers, capping revenue for property owners and potentially driving investors away from the German capital. Shares in major landlords slumped.
Berlin’s legislature backed measures including a five-year rent freeze Thursday, more than six months after they were proposed by the left-leaning administration. The changes will likely come into force by the end of February, though opposition parties have signaled their intention to challenge them in court.
The initiative put forward by the Left party’s Katrin Lompscher, head of urban development and housing, is intended to ease the burden on tenants after a property boom caused rents to double over the past decade. The political intervention has spooked investors as a separate campaign attempts to force Berlin’s government to expropriate properties from large landlords including Deutsche Wohnen SE.
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Full article (Bloomberg)I have mixed feelings on this, but it's obvious we need more government intervention to solve Germany's gigantic housing problems. However, the only substantial solution is more construction of middle class housing units, more public housing and a reform of regulations. The bureaucracy makes construction way too costly and too slow.
Let's see how this plays out in the coming years. Its constitutionality is still in question though as to whether a state government can issue such rulings. Usually housing and property is a federal issue.
