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Berlin rent cap overturned by Germany's top court
April 21st 2021
By DW
Germany's constitutional court has decided that the Berlin rent cap violates Germany's constitution. The cap was one of the most-debated laws in the country.
Germany's constitutional court in Karlsruhe has ruled that the Berlin state government had no right to impose a rent cap in the German capital.
The court ruling found that since the federal government had already made a law regulating rents, a state government could not impose its own law that infringed upon that, and said the Berlin rent cap law was therefore null and void.
The constitutional complaint had been brought in May 2020 by Bundestag parliamentarians from the conservative Christian Democratic Union (CDU) and the pro-business Free Democratic Party (FDP), who both welcomed the decision on Thursday.
Kai Wegner, a spokesman for the CDU federal parliamentary group, called the decision a "sensitive defeat" for the Berlin government, who he blamed for making "a false rent cap promise" to the city's renters.
" In the long-term, only a sufficient supply of housing can secure affordable rents."
But the Berlin government had called the rent cap a "breathing space" for tenants while new housing could be built.
Soaring rents
Berlin's rent cap meant that rents for 90% of Berlin's apartments were frozen for five years at their June 2019 level. New rents could not go above that level, and as of November 2020, any existing rents that were still above that level had to be reduced.
The Berlin rent cap has been one of the most debated laws in Germany over the past few years.
Campaigners argued it was a vital way to preserve affordable housing in the German capital, where rents have been soaring for years. The German Property Foundation (ZIA) calculated last year that rents in new contracts in the city had risen 27% from 2013 to 2019 alone.
The federal government imposed a "rent brake" in 2015, which allowed landlords to raise rents by 10% above the local market level. According to the constitutional court, the existence of this law among others meant that Berlin could not impose its own regulation.
Since the rent cap came into effect on February 23, 2020, it has caused uncertainty in the German capital's housing market, largely because landlords took to putting a "shadow rent" — higher rents that tenants would have to pay in case the court found the rent cap unconstitutional — in their rental contracts.
Renters associations have called these shadow rents unlawful.
Thursday's decision could mean a windfall for landlords as rents are instantly raised by hundreds of euros a month, on top of which landlords could now demand their tenants back-pay higher rents for the past year.
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