Rents in Berlin predominantly exceed legal bounds, according to findings
In the heart of Germany, Berlin's housing market has become a hot topic of debate. The city's tenancy laws, which include the rent brake, have been in place since 2015 and were recently extended to 2029. However, a recent review by the Berlin Senate's Safe Living agency (SiWo) has sparked controversy, revealing widespread overcharging by landlords in the finance sector.
According to SiWo's initial review, out of 95 leases reviewed, 93 had rents above the local comparative price, with around 60% considered exploitative. This has led to calls for harsher punishments and better enforcement of the rent brake, as proponents argue that the current system is failing to prevent rents from sky-rocketing in competitive housing markets.
The rent brake aims to prevent rents from exceeding the index price by more than 10% in tight housing markets like Berlin. A rent price index, or Mietspiegel, is maintained to record the local comparative price. For a three-bedroom apartment, the average price is around €2,369, while the average rent for a one-bedroom apartment in Berlin's central neighbourhoods is currently about €1,241, according to Numbeo.
However, if a landlord sets a rent price more than 20% above the local comparative price, it's considered an administrative offence, punishable by a high fine. If the rent is set more than 50% above the local comparative price, it's considered usury, or criminal over-charging, punishable by high fines or jail time.
Renters in Germany are responsible for bringing claims themselves if they suspect over-charging. If successful, the landlord would need to reimburse them. An online calculator, like the one by the Left party, can be used to check if rent is set too high. The rent index price for a comparable unit can be found online, and comparison with the paid rent can help determine if it's overpriced (in euros per square metre).
Opponents of the rent brake advocate for its abolition and letting market economics take control. They argue that the current rules disincentivize property owners from putting flats on the long-term market, exacerbating an already acute housing shortage. Graham Pugh, founder of BerlinRelo, is among those who voice this opinion, stating that the current rules create arbitrary 'winners' and 'losers'.
The debate surrounding the rent brake in Berlin is far from over. As the city grapples with its housing crisis, finding a balance between affordable rents and market economics will be key to ensuring a sustainable and fair housing market for all. For those living outside of Berlin, the local rent price index can be found by searching for Mietspiegel or Mietpreisindex followed by the city name.
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