“Scenes of crammed house viewings have become notorious in Berlin, where affordable apartments are a rare find….In a potentially far-reaching move to address the problem, the parliament of the Berlin city-state….approved a five-year freeze on rents and a price cap of 9.80 euros per square meter — or about $1 per square foot” write Loveday Morris and Luisa Beck for the Washington Post.
Renting is more common in Germany than home-ownership. With a population of three million, only 18 percent in Berlin own their own homes.
In 1When the Berlin Wall fell in 1989, there was a surplus of apartments. Many were publicly owned. But in the 1990s many were privatized, bringing in much-needed cash to Berlin, but also foreign investors who saw the potential for growth. All the while Berlin’s population grew rapidly. This combination of factors led to a scarcity of housing and a dramatic increase in rental prices. Berlin is now one of the fastest-growing real estate markets globally.
Despite the relative affordability of rents compared to some other European cities, the rising rental prices are having a devastating effect in a city where salaries are relatively low.
Now, Berlin’s ruling Social Democrats, Greens and the Left party have all agreed on a radical plan to tackle rising rents. The 5-year plan will not only cap most rents at 2019 levels but will set limits on rents based on amenities and condition of the units.
The German plan has sparked interest in cities all over the world. Will it work?
Read the original article here.
Image from pxhere licensed CC0 Public Domain