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  • Berlin's parliament on Thursday passed a controversial law to freeze rents for the next five years in a bid to combat soaring rents and rapid gentrification in the German capital. Once described as "poor, but sexy", Berlin has seen its housing costs double over the last decade as employees lured by the strong job market move into the city. The new law, expected to come into effect in mid-February, will cap rents until 2025, after which any increases will be limited to 1.3 percent per year in line with inflation. According to the city's department for urban development and housing, it will affect over 1.5 million apartments. Exceptions include social housing and new apartments built since 2014. Some particularly high rents could even be lowered after the first nine months of the freeze, while landlords who break the rules could face fines of up to 500,000 euros ($550,000). The rent freeze, passed by a slim majority of 85 votes out of 150, is a flagship policy of the local governing coalition of the centre-left SPD, the Greens and the far-left Linke parties. But it has faced fierce opposition from other political parties and the property sector. The conservative CDU has already indicated that it intends to challenge the law in Germany's constitutional court. Others fear that the freeze will simply discourage developers from building in Berlin and ultimately worsen the capital's housing crisis. According to the property website Immowelt, Berliners spend a quarter of their income on housing costs. Only 18.4 percent of the city's roughly four million residents own their own property, one of the lowest rates in Europe. For now Berlin is the first and only of Germany's 16 federal states to introduce a rental cap. Yet the SPD, which is also the junior coalition partner in Chancellor Angela Merkel's federal coalition, has pledged to champion rent controls nationwide. kih/mfp/har
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  • Berlin passes five-year rent freze law
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