In cities all over the world housing people is an issue and some cities have it worse than others. In Berlin, where things weren’t awful they decided they waned to stop a downward trend that cropped up in the rental market. Renters were confronted with a market that was inhumane and the city took action.
Barely a month after the German capital introduced a new set of rules that limits rent increases within a given area, figures collected by ImmobilienScout24 show that the average cost of new Berlin rental contracts has dropped 3.1 percent within a month. This can’t be written off as an example of a general countrywide downward trend. In other German cities where such laws haven’t yet been introduced, rents have remained more or less static. This is good news for the legislators of Berlin’s Senate as their new law is doing exactly what they promised the electorate that it would.
The new law introduced on June 1st—called the mietpreisbremse or “rental price brake” in German—works like this. An overseeing body fixes a standard median rent per square meter for each city district, using figures based a biennial state census of rents. No new rental contract within the district is then permitted to charge over 10 percent more than this amount. This still means that price increases for new rentals are possible, but if they come, they happen far more slowly.