Bye-bye, berlin rent cap!

Bye-bye, berlin rent cover!

Demonstration against "rent madness" on 6. April 2019 in berlin. Image: leonhard lenz, cc0 1.0

The federal constitutional court has denied the state of berlin the competence to regulate rent levels by law. Now good advice is expensive

The party is over, the hangover was allowed to be enormous. The federal constitutional court has declared null and void the law limiting rents in the housing sector in berlin (mietenwog bln), which came into force in february 2020. Not only in parts, with options for a "rectification", but fundamentally and without hindsight.

For the affected tenants this is a shock. The rent cap, passed by berlin’s house of representatives in january 2020, promised protection against further rent increases for at least five years and, in its second version, which has been in force since november 2020, opened the door to new tenants. Stage also the possibility of lowering excessive rents.

For a total of 1.5 million rental apartments, the highest rents were set according to building age and equipment characteristics, and these rents were also binding for new leases. Only new buildings were exempt (as of 2014)

A rocky road from idea to law

The rent cap was the most important reference project for the red-red-green government. It all started in november 2018, when peter weber, a lawyer specializing in tenancy and housing law, published an article in a legal journal that, referring to the 2006 reform of federalism, outlined the possibilities of regulating rents at the state level. The left party and grune were initially skeptical.

On the other hand, some spd politicians saw an opportunity to distinguish themselves as advocates of tenants’ interests. In january 2019, eva hogl, then a member of the berlin bundestag and now the federal defense commissioner, published a guest article in the tagesspiegel outlining the outlines of a possible law for a rent moratorium lasting several years.

However, the real estate lobby, which is traditionally well networked within the spd, immediately mobilized and tried to overturn the advance. The left then jumped into the breach and took the lead in the movement. Eventually, the spd and the greens got on board, realizing that the rejection of a thorough rent regulation would be difficult to communicate even to their own clientele. For the spd, it was also important to prevent worse damage in their eyes, because just at this time, the initiative, which was quite popular among the population, also caused "german housingco expropriation", the project, which is currently collecting signatures for a petition for a referendum, is causing a sensation. The rent cap, which was viewed skeptically in parts of the spd, was the price the party had to pay to keep the unpopular initiative at bay.

It is not surprising that the opposition parties cdu and fdp, as well as the real estate industry, ran up a storm against this law and filed constitutional complaints in karlsruhe after it was passed. It flared up a "expert opinion", the main ie is whether the state of berlin has the legislative authority to regulate rents at all. A question, which the verfangsgericht now categorically denied.