Millions of Berlin Tenants Await ‘Rent Cap’ Ruling

Tenants across the German capital are awaiting a Constitutional Court ruling on Thursday that could drastically affect the rent they pay.

At issue was the so-called “rent cap” legislation in the capital, which came into force in February 2020.

Since then, the rents of around 1.5 million flats in Berlin have theoretically been frozen at June 2019 rates.

If a flat is vacated and put back on the rental market, landlords must adhere to the cap based on the previous rates rather than bumping up the costs.

Between 2022 and 2025, rents were permitted to rise annually by a maximum of 1.3 per cent.

The rent cap has been highly controversial, with critics blaming it for reducing the housing supply and stifling the rental market, even as rental rates have on average gone down.

In some cases, landlords have tried to agree higher “shadow” rents, arguing that the legislation was being challenged in the courts.

If it is deemed unconstitutional, rents that have been frozen could be hiked back up.

The rent cap is unique to the German capital, where a left-wing coalition has been in power under Mayor Michael Mueller.

Mueller has described the law as a necessary breather for tenants struggling to deal with the soaring cost of renting property in the city.

The challenge in the Constitutional Court was brought by centre-right and liberal parties, who argued that the city’s government had exceeded its powers by changing tenancy law, which was normally decided on a federal level.