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Regulating Berlin’s rental market splits city in two

March 06, 2021

Berlin's Rent Controls Are Proving to Be a Disaster — Andreas Kluth

If populism on the political right corrupts democracies, populism on the left ruins economies. For the latest evidence take a closer look at the housing market of the German capital, Berlin.

A year ago, a rent cap took effect in the city that was unprecedented in Germany. For all apartments built before 2014, rents were frozen at whatever they were on June 18, 2019. Tenants in those units can also force landlords to lower rents defined as "excessive."

This reform came courtesy of the city state's "red-green-red" governing coalition between the three left-leaning blocs in the German political spectrum: the Social Democrats, the Greens and the Left (which descends largely from the Communist party of the former East Germany).

That heritage seemed to set the tone of the campaign that preceded the legislation. At times it descended into a competition between the coalition partners about who could play the most demagogic class warrior, rhetorically pitting pitchfork-wielding tenants against let-them-eat-cake landlords. It's probably no coincidence that there's even a separate grassroots effort for a ballot initiative to expropriate large property-owning companies.

Read the whole thing.

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