Berlin tenants undaunted by recent court ruling that undoes a rent cap

Jenny Stupka’s rent for her house share in the Wedding district of Berlin rose by 40% in under six years. 

The price hikes suddenly halted after the Berlin state government introduced a rent cap in 2019. 

But Germany’s constitutional court ruled last week that since the federal government already had laws in place regulating the rental sector, the Berlin state’s rent freeze bill infringed on those laws.

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Now, Stupka faces not only a surge in her monthly rent, but also back payments to her landlord for the time the cap was in place. The change in law means almost half of Stupka’s salary will soon go to rent, she said. 

“One of the most outrageous consequences of this judgment is that a lot of households will have to pay back huge amounts of money now.” 

“One of the most outrageous consequences of this judgment is that a lot of households will have to pay back huge amounts of money now,” she said.  

Stupka, who is a campaigner with Deutsche Wohnen & Co. Enteignen, which advocates for renters in Berlin — 85% of the city’s population rents — said that many new tenants, in particular, will no longer be able to afford to pay for where they live. 

Tenants’ organizations in other parts of Europe have been watching how the law has been enforced in the German city.

Barbara Steenbergen, head of the EU liaison office with the International Union of Tenants, said other countries should take heed of what’s occurred in Berlin and avoid similar missteps: “I think other countries, other cities, can learn from what happened in Berlin and possibly do better.” 

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But Steenbergen said it’s not all bad news for tenants. The rent freeze itself was not deemed unconstitutional, rather the Berlin government’s bill introducing it was. This has given Steenbergen and Stupka hope that they can put pressure on the national government to consider a nationwide rent cap. The move is likely to be popular among renters. One recent survey of tenants and landlords in Germany shows more than half are in favor of a rent freeze policy; 30% are opposed. 

One of those against the measure is Christian Osthus, vice director with IVD, which represents over 6,000 real estate agents and property managers in Germany. Osthus wasn’t surprised by the court ruling, although he said he doesn’t agree with asking tenants to make back payments.

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He argued that the building of new houses in Berlin stalled while the cap was in place because developers took their business elsewhere: “I know from several investors that they shifted their investments to the rural areas, to the suburbs of Berlin and some went to other cities, too.”  

Osthus said Germany already has sufficient rent control laws in place, in part, as a result of the “Mietpreisbremse” or “rent price brake” that was introduced in 2015. The measure aims to prevent landlords from increasing rents by more than 10% of the local average. 

Tenants groups say the regulation doesn’t often work, as many landlords simply ignore it. Rent prices in Berlin are notably lower than in many other major European cities, but Steenbergen said it’s an unfair comparison. Berliners earn far less than their European counterparts, she said.

“Do not forget, we do not have the same salaries in Berlin like you have in New York or London or Paris or even in Munich or Frankfurt. In Berlin, the salaries are very, very low.”

“Do not forget, we do not have the same salaries in Berlin like you have in New York or London or Paris or even in Munich or Frankfurt,” she said, adding, “In Berlin, the salaries are very, very low.”

Germany’s next general election scheduled for late September has given tenants’ rights campaigners hope that political parties will take up their cause. A coalition of left-wing parties, the Social Democrats (SPD), Greens and Die Linke passed the bill in Berlin. But it was members of parliament from the center-right bloc, the Christian Democratic Union (CDU) and Christian Social Union (CSU), along with the pro-business Free Democratic Party, who opposed the law and led to its court challenge.

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Opinion polls show that support for Angela Merkel’s party, the CDU, has fallen since last year, giving left-wing parties hope they may have a shot at power. The chancellor is also due to step down this year, which may further weaken her party’s standing.

Osthus said the pandemic is a big issue for politicians and voters right now, and will dominate the political agenda over the next five months.

But Stupka believes rent control will feature prominently in the election campaign. Stupka’s group, Deutsche Wohnen & Co. Enteignen, is also campaigning for a referendum to be held to expropriate private housing — forcing companies that own over 3,000 private apartments to return them to the city of Berlin for social housing. 

Deutsche Wohnen is one of the largest property owners in Berlin and one of Stupka’s chief targets — hence, her campaign’s name. The court decision to overturn the rent freeze bill in Berlin has brought many new supporters to her campaign, she said. 

Steenbergen acknowledged that there’s a way to go about bringing some political parties on board. But she said that the campaign is only getting started: “The story is not yet over. I think the opposite is true. The story is just beginning.”