Why Berlin's new rent control law is a gift to the rich

This is a 6-minute read

“45 percent, imagine that!” said my friend, who we’ll call Adam. He was all smiles as he told me about the rent reduction he was about to get on the 140 square metres of prime Berlin real estate he shares with his wife and baby. 

Adam is a beneficiary of Berlin’s rent-control policy - the Mietendeckel. While his landlord won’t be able to cover the interest costs on his mortgage anymore, Berlin’s left-wing government has set a rent it believes is fair for two high-income tech workers. 

After a nine-month warmup during which only new rents were capped, the Berlin senate yesterday dealt the next (left-handed) blow to freedom of contract and right to property. Now every tenant renting an apartment built before 2014 will have their rent reduced if it is above the level set by city authorities.

Surging rents are the bane of metropolitan areas the world over. But few places have seen such dramatic increases as those in Berlin. In the decade since I moved here, rents have gone up fifty percent. …