There has been a lot of publicity recently about the rent cap in Berlin, that was prohibited by the constitutional court. But a much better solution has already been in place since 2015, and can be easily applied to lower your rent considerably. Strangely enough, many Berliners seem to have never heard of this law.
Like many other European capitals, the Berlin real estate market is overheated. In general, populations of big cities tend to grow at this moment. Additionally, the rents in Berlin have historically been low, because it was a relatively poor city during the Cold War with a badly-maintained inventory of real estate.
Now it has become the capital of Germany again, and with a booming tourist industry, the city is changing fast. Renovation projects are happening everywhere, and new construction is progressing at a similar frantic pace. Demand though is massive, both for rental housing and for buying houses.
In stark contrast to the rest of Germany, the proportion of ownership vs rent has always been low. This has created a vast pent-up demand, especially since Berlin is booming economically. This has caused property prices to soar, including the rents.
The big problem has become gentrification. Landlords try to evict old tenants with low rental prices, to renovate the building and crank up the prices. It forces people to move away from their long-time neighborhoods, and causes lots of insecurity. Not only in Berlin by the way, but also in other expensive cities such as Munich, Düsseldorf and Hamburg.
That is why the federal government approved the Mietpreisbremse (rent brake) law in 2015. It is a relatively simple formula to determine the maximum rental price. A tentant can go to his landlord if the rent is higher and demand the lower price.
Scared of landlords
Problem solved? Not really. Either were most tenants unaware of the new law, or they were too scared (as in my case) to get into trouble with the landlord. Yes, that is how sick and unhealthy the Berlin real estate market has become.
Strangely enough, the government also decided to not enforce the law themselves. They shifted the burden to its citizens. Which basically enables the real estate capitalists to keep on making insane profits.
Failed rent cap
Discontent with the ever-increasing prices was boiling over though. So the state of Berlin implemented the Mietpreisdeckel (rent cap) in 2019, designed to freeze the prices for five years. Having a huge PR campaign around the rent break would have been much easier and effective.
Especially as there were two major fuck-ups with this new law. The maximum prices were much higher in lots of cases than the Mietpreisbremse, so it didn’t help as much as the other law. And, more importantly, the Constitutional court decided the law was invalid because a single state can’t decide to change the rules for real estate prices.
What next? Well, the rent break is still valid of course, and a much better tool as well. So in my case I conquered my fear of getting into trouble with the landlord. I became member of a Mietschutzverein (tenant protection association, this is mine), talked to a lawyer, used sample letters and told the landlord he should lower his rent.
The calculation is pretty simple. The city of Berlin has a calculator (called Mietspiegel) where you can enter your address and size of your house. It calculates the average rent, you fill in some more details and then you have the specific rent for your dwelling. The maximum price is 10% higher. But in my case that was still 110€ (or 20%) lower than my current rent.
In other words, this one letter to my landlord will save me 1.320€ per year. Unfortunately, the law is not valid backwards (this would have saved me 7.000€ since 2016), though an updated version does give tenants that option for 30 months for contracts signed from 2020 onwards.
Friends are surprised
My landlord accepted my proposal, with some minor changes. When I told friends about this, they were surprised. And calculations show that they can also lower their rents by 20 to 30%. In other words: the Mietpreisbremse is an excellent tool.
It makes you wonder why most people don’t know of its existence. And the more Berliners implement the law, the likelier it becomes that landlords will accept it as the reality.
The law is extremely necessary: my neighbors are leaving for example. The new proposed rent is 20% higher than the old price, and 50% (250€) higher than the maximum according to the calculator. The landlord gambles that the new tenants don’t pull the rent break. You can call that smart business. Or it’s the equivalent of driving 180 km/h where 120 is allowed: you’re breaking the law.
Spreads the word
So tell about this to friends and colleagues. This is not the only solution for the real estate problems in Berlin, but it is a major part of the puzzle. Housing is a basic right and not an investment opportunity. There is a massive campaign underway to demand a referendum on resocializing a lot of rental houses. But with the Mietpreisbremse the solution is already there to a great extent. And if the city starts to encourage not-for-profit house construction at a large scale, the other half of the solution puzzle would be there as well.