Berlin Poised For Rent Freeze To Curb Rocketing Rates

Berlin, (UrduPoint / Pakistan Point News - 18th Jun, 2019 ) :Berlin authorities will decide Tuesday whether to freeze rents in the booming German capital over the next five years, in what would be their latest bid to halt runaway gentrification.

Once described as "poor but sexy", Berlin has seen its housing costs double over the last decade as employees lured by the strong job market move into the city.

The sharp rent hikes have led some residents to ponder radical solutions, including pushing for the seizure of housing stock from powerful landlords.

Alarmed by the trend, Berlin's city government is poised Tuesday to agree the outlines of a draft law that would include a temporary freeze on rents for five years from 2020.

Under the plan that could affect 1.4 million properties, landlords who seek to raise rates because of renovation work will also have to seek official approval for any increases above 50 cents ($.56) per square metre (11 square feet).

Only social housing and private property that has not been let out would be exempt.

The move, by Berlin's coalition government of the centre-left SPD, the Greens and far-left Linke party, is being closely watched across Germany, where a backlash is growing over fears that residents are being priced out of key cities.

In an indication that the Berlin example could snowball into something wider, the SPD, which is also the junior coalition partner in Chancellor Angela Merkel's Federal coalition, has pledged to champion such rent controls nationwide.

"We need a rent price cap for all of Germany," said Thorsten Schaefer-Guembel, one of the three interim SPD leaders.

He argued that the measure would help "win time to build, build and build".

The SPD's stance however puts it on a collision course with Merkel's centre-right bloc, putting more pressure on their already fragile partnership.

Merkel herself has voiced scepticism about such caps, warning that "we must also provide an environment for people to want to build.