In Short
The Situation: Over the past decade, Berlin has
experienced a significant rent increase for residential space
though rents still remain significantly lower than rents in other
European capitals. On January 30, 2020, the Parliament of the
Federal State of Berlin adopted a law to freeze rents ("Rent
Cap Act") in Berlin which came into force on February 23,
2020.
The Result: Rents for residential space
completed before January 1, 2014, are frozen on the level of June
18, 2019 ("Effective Date"). Maximum rent amounts are
introduced for residential space, taking into consideration the
year of construction, standard of comfort, and the residential
area.
Looking Ahead: The Berlin government expects
that the Rent Cap Act will help to cool down what commentators
argue is an overheated market for rented residential space. Critics
say that this regulation will not create more residential space but
will discourage investors and developers and make the
