The Berlin Senate’s recent announcement that they intend to adopt a rent cap seems to have caused the capital city’s landlords to run scared. Now, an owners’ association is urging its members to increase their rents before time runs out.

Berlin association urges rent increases

The banner is emblazoned across the top of the Haus und Grund owner's association website: "The last change to increase the rent will potentially end on 17 June 2019." Below that is a timer, counting down the exact number of days, hours, minutes and seconds until June 18.

The cause for alarm? Next Tuesday, the Senate will meet in Berlin and most likely vote to pass a law that landlords are understandably not very keen on: a landmark paper, which will prohibit rent increases in the city for the next five years. It is thought that the ruling could affect some 1,5 million apartments in the capital.

Rent caps “penalise” Berlin’s scrupulous landlords

This move, Haus und Grund argue on their website, “Penalises above all landlords who have not exhausted all the possibilities of rent increases in the past” and fails to distinguish between “profit-orientated housing companies and private, small-scale owners.” Rather than targeting international financial investors, they claim that the Senate’s proposals will only hurt the city’s long-established, well-meaning landlords.

Property owners in Berlin are permitted to increase the rent by up to 15 percent within three years, up to a maximum comparative limit, but many have not done so. Haus und Grund therefore encourages landlords, who have not yet done so, to increase their rents to “defend” themselves and protect their properties as much as possible.

Rental caps may be retroactively enforced

Berlin’s Senator for Urban Development and Housing, Katrin Lompscher, said that the call was a “devastating signal” of the demotion of tenants to mere bargaining chips in the eyes of the housing lobby. The president of the German Tenants’ Association, Franz-Georg Rip, deemed the move “irresponsible” and remarked that Haus und Grund’s actions merely confirmed the need for cap rents in order to protect the rights of tenants.

Rip also said that the Senate is exploring the possibility of enforcing the rent cap retroactively to a specific deadline, such as June 1, so that any subsequent increases would be rendered void. He advises anyone who receives a rent increase in the coming days to have its legality checked by the Berlin Tenants’ Association.

Rent cap to cool Berlin housing market

Although the housing market in Berlin has been overheating for some time now, with average prices per square meter rising above 10 euros cold, there are some signs that it is beginning to cool off. Between 2015 and 2017, rents rose by 4,6 percent per annum, compared with just 2,5 percent between 2017 and 2019, according to the most recent rent index.

Introducing a rent cap is just one of a whole host of recent measures proposed to bring prices under control. It is not only being considered by Berlin, but is also being debated in other German cities: while a similar proposal has recently been blocked by the SPD in Hamburg, the tenants’ association in Munich is demanding a referendum on the subject.