Marcus Cieleback, of real estate agent Patrizia Immobilien AG, is sceptical, calling the law a “result of political populism” and claiming it will only weaken the position of renters.
“You need to consider that 25 years ago Berlin was a non-existent market economy. It lost a generation of rental increases and salary increases due to the Berlin Wall and its aftermath. In 2014, politicians saw that the rents had increased suddenly by 20-30% from 2013, and insisted they had to be capped, but in fact the rent increases were only catching up to normal levels.
“Ultimately, the rent cap will result in a lack of proper investment by landlords in the property. It will boost the building of luxury apartments [where higher yields can be made] and discourage the building of normal standard housing [relatively expensive due to energy regulation], which will not help the housing shortage,” he said.
Others say the rent controls have also caused rent rises in hitherto less desirable districts as landlords have taken the advantage of being allowed to justify a 10% increase where they might previously have increased it by less.
Despite the conflicting views on the success of the rent cap in Berlin, it has since been copied by Hamburg, and no fewer than 166 towns and cities in the states of Bavaria and North Rhine-Westphalia. Other states are to follow by the end of the year.
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- Snakes and ladders for tenants as Berlin rent cap starts to bite | World news | The Guardian, Thursday, August 20, 2015 - 10:07