Changes in Berlin

After reading the article “Berlin becomes first German city to make rent cap a reality”, I learned about the policy that Berlin government made to limit rent rise in the area and make the life of low-income people easier. This law was originally only applied to existing tenants, but now is extended to new contracts. In details, it prohibits landlords from increasing rent more than 10% above local average.

eAverage rent in German has increased a lot in the past 10 years, from 5.5 euros per square meter to 9 euros per square meter. And local Berlin housing market is always very strong as they have around 40,000 more new comers every year. Although the rent in Berlin is still lower than other cities in German, the average income of Berlin people is also lower, thus the law is well-welcomed by local people. The article mentioned a couple of examples of local people have difficulty in find a cost-effective place to live. For example, a couple with an 18-month old son lives in a one bedroom apartment. They would like to have a bigger plac
e to live for their son to have his own room. But they are not financially competitive as other tenants which leave them a difficult situation. And quite a few people can’t afford moving to new place because the rent for a new place will be much more than their old place. I think local government made the right call, before things get worse, this law can help people settle into the place they like to stay, with reasonable rent that they can afford. The law is also an indication that local government starts to address income inequality and poverty issues, and prevent abusive landlord behaviors.

Assignment 4-8, Commummity Development/Gentrification, ,

1 Comment

  1. This is interesting in how it widely contrasts compared to the US and I imagine many (especially people who earn lower income) would prefer this rent model. When comparing Berlin to New York, New York has rent rise that reaches far north from 10%. And while there is rent control, it only supports those who were grandfathered into it. Another downside is that these programs are also being attacked because of how it would profit. I agree with Yi that this model also addresses inequality by making housing less of an issue, since lack of affordable housing is one of the larger causes of poverty and separation.

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