Rent cap places a burden on the Berlin housing market

Dr. Franz Eilers und Saskia Kalweit, vdpResearch

The Law Revising the Statutory Provisions on Rent, which came into effect in Berlin one year ago and is more commonly referred to in Germany as the “rent cap”, places certain groups of tenants at a disadvantage and is a disincentive to modernization measures, including those intended to save energy. In order to ease Berlin's housing market and curb the rise in new contract rents, the pronounced construction overhangs would have to be reduced. These are the findings of a recent study conducted by vdpResearch GmbH and published as part of the “vdp-Spotlight” series, which is issued by the Association of German Pfandbrief Banks (vdp). The study first examines policymakers’ motives behind the law before considering whether these political objectives are being met.