The city's own landlords raised rents last year despite cap

Berlin's six state property companies passed on upgrade costs and increased the cost of new apartments but rented the majority of properties to the needy.

Degewo, one of six public residential property companies. 
Degewo, one of six public residential property companies. Benjamin Pritzkuleit

Berlin - The capital's own rental agencies raised rent an average 1.1 per cent last year despite the now-defunct rent cap, a new report showed Tuesday.

Rents at the approximately 333,000 publicly managed apartments rose from €6.22 per square metre at the end of 2019 to €6.29 at the end of 2020, according to the report, which was prepared by Wohnraumversorgung Berlin, a public agency. Meanwhile, the average rent on new leases at the state-owned landlords fell to €7 from €7.43 because the rent cap offered the rental agencies less wiggle-room.

Wohnraumversorgung is the agency tasked with ensuring that Berlin's property companies follow the intentions of the city-state's politicians as established by a 2017 cooperation agreement. In the agreement, the landlords promised to increase rents less than legally permissible and also rent a certain proportion of their apartments to people with a Wohnberechtigungsschein, or WBS, which grants them access to subsidised housing.

The rental increases include higher rents on 134 apartments built after 1 January 2014, which were exempt from the Mietendeckel rent cap to encourage new construction. The state-owned property companies also boosted rent on 12,271 other flats because of upgrades, which tenants either agreed to or are covered by local and federal rental laws. The increases were primarily due to the installation of mandatory smoke detectors, which only had a minor impact on rent.

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Rent reductions

Tenants in 10,681 of the 34,566 subsidised social apartments also saw rent increases, which the report said were due to regular adjustments of management and maintenance costs. The adjustments are made every three years. However, if tenants pay more than 30 per cent of their household income for cold rent (before side costs), they can apply for a rent reduction. Last year, 107 tenants made use of this option with 87 applications approved and 20 rejected.

While the existing rents of the six state-owned companies were 39 cents per square metre below the comparable rent index rent of €6.68, new rents were almost 30 per cent below the market average €10.14 per square metre.

A target of allocating 60 per cent of the apartments that become vacant each year to WBS-eligible households was exceeded in 2020. The state-owned landlords even achieved a rate of 62.2 per cent - equivalent to 8,940 apartments.

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