Tenancy Laws in Berlin How Rent Control Impedes Residential Construction, Creates Black Markets, and Harms the Poor
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Abstract
Berlin is facing large increases in rent levels over the last decades. To overcome pressure on the market, the Senate of the city has repeatedly introduced rent controls. While the German Constitutional Court has found the latest rent-controlling legislation, the Price Ceiling Act of 2020 to be violating German constitutional law and hence invalid and void, there is strong economic evidence for why rent controls do more harm than good and after all even lead to a decrease in housing provided. To provide for affordable housing, the City of Berlin needs to pursue other measures that stipulate the construction of new housing: the increase and acceleration of the granting of building permits, release of shallow land and actively engage in municipal construction.
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