Real estate : 340,000 flats too expensive under rent control law
The second stage of Berlin's controversial rent cap is coming. The city's new urban development boss says even public owned housing sometimes charges too much.
Berlin - The next stage of the rent cap will comes into effect on 23 November this year, making the rents of an estimated 340,000 apartments in Berlin illegally high, Sebastian Scheel (Die Linke), the new head of urban development, said in an interview with Berliner Zeitung.
Most landlords will adjust rents voluntarily, he said: "Maybe 20 per cent won't reduce an excessive rent." Renters must then inform Berlin officials before the city can take action – they would otherwise have no knowledge of the violation, he said.
The first stage of Berlin's Mietendeckel rent cap came into force on February 23, freezing rent on about 1.5 million older rental apartments in Berlin at the level of 18 June 2019. The law also introduced top rents of between €3.92 and €9.80 per square metre before additional costs. Surcharges or discounts are possible, depending on the apartment's standard and location. The law only applies to buildings built before 2014.
The second stage, starting November 23, forbids what the law sees as excessive rents – rents that exceed defined upper limits by more than 20 per cent. Landlords must then reduce rents to the legal limit.
Scheel said even state-run housing companies charge rents that will become illegal in November. Scheel has been in the position less than a month after taking over Katrin Lompscher (Die Linke) who resigned after it emerged she had failed to declare certain income on her taxes.
The politician said Berlin is ready to tackle rent cap violations and various neighbourhoods have filled 48 positions created to handle complaints. The city administration will also add 130 new bureaucrats.
The rent cap is controversial and several suits are awaiting a ruling at Germany's constitutional court. Berlin claims it has a right to set rent policy while the federal goverment says only it has such powers.
Scheel defended the decision not to suspend the rent cap until a ruling had been made.
"Nobody brought up the idea of temporarily suspending it," he said. "The rent cap is a valid law."
The first step of the rent cap went into effect on 23 February and the city has yet to issue any citations based on the law. The regulation includes exceptions for landlords who prove they need the money. Statistics show 1,112 applications for exceptions have been submitted with just 63 approved so far.