The limit on rental prices in Berlin, legislated by the city-state regional authorities more than a year ago, was controversial from the beginning, but now the Federal Constitutional Court rules that the rule limiting the rental price is unconstitutional. As landlords warned at the time the rule went into effect, they will now & nbsp; ask tenants to pay the rent & nbsp; they have been saving over the past year. .
The ruling issued by the German Constitutional Court states that the rent limit violates the Basic Law and declares the state law null and void, following the request of the deputies of the Bundestag of the Liberal Party (FDP) and the CDU / CSU, a total of 284 deputies. Two civilian courts in Berlin had also asked for clarification in Karlsruhe, overwhelmed by the owners’ demands.
The law passed by the red-red-green coalition of the Berlin regional government, which & nbsp; froze rental prices since February 23, 2020 to 1.5 million apartments in the German capital , so that tenants could not pay more than the prices of the June 2019 level, it will automatically cease to be in force. The effects of the rule limiting the price of rents on the housing market, despite being in force for only one year, had been felt with special emphasis. The number of homes for sale had risen sharply, while the number of homes offered for rent has fallen as a reaction from landlords to the administrative decision to freeze leases for five years.
According to ImmoScout24, the leading real estate platform in Germany, & nbsp; the supply of housing with prices above the threshold set by the new law had been steadily declining & nbsp; since early 2019, when the proposal law was still under debate, at about 18% and since the established date of entry into force, about an additional 10%. At the same time, & nbsp; the supply of rented housing for sale increased from 40% in July last year, & nbsp; as did properties for sale with tenants , which did 25%.
“Based on the data we have, it can be deduced that since July 2019 & nbsp; landlords are moving from renting out their homes to putting them up for sale,” says Thomas Schroeter. ImmoScout24 manager, “many homeowners complain about the uncertainty, they don’t know what will happen to the law in the future, and they prefer not to take any chances.”
The regulations now disallowed by the Constitutional Court & nbsp; froze leases for five years and also set a rental price cap of 9.80 euros per square meter & nbsp; for ready-made properties to be inhabited before 2014. “This does not solve a problem that is structural,” adds Schroeter, who recalls that there are currently between 100,000 and 135,000 rental homes in Berlin.
What had also managed to freeze the new regulations is the interest of the builders. Between July and September 2019, 28% fewer building permits were granted than in the same period last year. “Before we expected that in a few years supply and demand would be able to balance, but now we know that this will not happen and the investment is withdrawn. Berlin, on the other hand, is a deficit city that does not have its own resources to inject into the necessary housing, so now everything is waiting for how the situation develops on its own. ” p>
The owners trusted in such a way that the Constitution would prove them right, on the other hand, that in many cases the regulations were not complied with. About 95% of rental homes offered between January 1, 2019 and January 23 last & nbsp; exceeded the established limits of the new law by an average of 5.92 euros per square meter .