Berlin Officially Introduces a Rent Cap to Keep Renters from Being Screwed

Berlin is an incredibly affordable city compared to other European capitals or major cities across North America.

When this all of a sudden became mainstream news around half a decade ago, everyone and their best friend began packing their bags and moving to the German capital. Berlin became the ‘it’ city of the world, eventually plateaued, sold out, and is apparently already over. So they say.

But the influx of newcomers is as high as ever, and the cost of living follows a steady upward trajectory. Rents have exploded in recent years – doubling over the last 10 years, and rising 9 per cent between 2013 and 2014 alone – but are still on the cheap side for most Brits, Aussies, and Americans who are accustomed to paying much more for apartments. The overall cost of living in Germany is also comparatively low.

Pre-hype Berliners, meanwhile, are being suffocated by the rising rents. Finding an affordable apartment has become a nightmare situation in a city that’s home to notoriously low wages, a surprisingly high unemployment rate, and a considerable low-income population.

Google ‘Berlin gentrification’ and you’ll see just how major an issue this is.

Yesterday, Berlin became the first German city to enact legislation that could potentially curb the problem. As of June 1, landlords will be barred from increasing rents by more than 10% above the local average. They’ll also no longer be able to charge commission for units, which, when combined with a damage deposit of up to three months’ rent, forced many to commit a huge sum of money up front. The rent ceiling is critical because of the disparity between the rent paid in existing contracts and new contracts.

“We don’t want a situation like in London or Paris,” said Berlin Tenants’ Association Managing Director Reiner Wild. “The reality in Paris or London [and especially New York] is that people with low income have to live in the further-out districts of the city.”

Several loopholes have heaped skepticism on the initiative, but the rent cap is the first major move towards solving an issue that politicians have been grappling with for over half a decade.

Certainly not an easy task for a city that gains 40,000 more inhabitants annually.