Berlin Rent Cap Overturned, Leaving Many Scrambling to Make Ends Meet

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In February of 2020, just before lockdowns started to become the norm in Europe, Berlin’s city government passed a law capping the rent levels in the city at their rates from June 2019. The idea behind the law was that it would serve to keep the cost of living in the city more manageable for a wider demographic of people.

However, this week, the German Federal Constitutional Court overturned the law, saying the city didn’t have the authority to impose such a cap. Now, people living in privately-owned housing developments that they rent out are facing down two grim financial prospects. For one, their rent is going up, starting next in May, often by as much as 300 euros per month. For another, many renters will also be facing a staggering bill of back-owed rent, as the law was overturned in a retroactive manner.

This means that someone who had their rent reduced by 200 euros per month will now owe their landlord 200 times the number of months they lived in the rental property under the overturned law. Many people in Berlin are frustrated with this outcome, and some have called on the city or federal government to intervene.

Federal Rent Cap Discussion

Berlin’s city government has said that it passed the rent cap after seeing no action from the national government on affordable housing. After the court overturned the law, Berlin’s Housing Minister, Sebastian Scheel, tweeted that he felt it was now up to the national government to stop dragging their feet and create a federal standard for rent control.

Many in Berlin are skeptical that this will be happening any time soon, however. The federal government has not made rent control a priority in recent years, and the country is still in the midst of a public health crisis. In the meantime, the back payment bills are piling up.

Is Anyone Exempt?

Some property owners have elected to not collect the back payments. However, every renter who is living in a privately-owned property will see their rent go up to 2021 levels, from 2019 levels, a hike that is likely to be difficult for many people to balance with their income.

The government is offering some help for renters, however. Berlin’s senate has offered some lower-income renters the option of taking out loans from the city and has also authorized grants for some special cases. In the meantime, however, millions of people in Berlin are now seriously considering if they can afford to stay in the city.