Over the last few months, a lot has been written about the new Berlin rent freeze – otherwise known as the Mietendeckel. The law has been in the legislative pipeline for some months, and the freeze was finally agreed to by the state cabinet, and then the Senate, in late October. The action is undoubtedly a positive one and a step in the right direction, but it, and the politics around it, have exposed the problems with rent freezes, and an overly ‘local’, nostalgia-based attitude to politics.
First though, what does the law do? The simplest part is the rent freeze: Berlin rents will not be permitted to rise (with certain exceptions around modernisation) for five years, in new or old contracts. After 2022, a 1.3% rise per year will be allowed.
But, that is not actually the radical part. The radical bits are the provisions around current, already set rents. The law does not just freeze current rents, but also sets a legal price-per-square-metre for current and future rents. That is to say, if, for example, you live in one of the most common types of homes in Berlin – a flat built before 1918 that has central heating – the amount you are paying in rent will be illegal if it is more than 20% above €6.45 per square-metre per month (termed a ‘usurer rent’). To give an example of what that might mean, the flat I live in is 57m2, and the ‘cold’ rent (without bills) is around €1000 a month. If after the mietendeckel comes in I successfully apply to have my rent reduced, the rent for the whole flat would be reduced to as little as €441 per month.
However, what a lot of people both from outside of Berlin and those living in the city itself do not realise is that this is actually already possible. In 2015, the Bundestag (the German parliament) passed a different law: the Mietpreisbremse, or ‘rental brake’. This law also applied two restrictions. One, that new contracts signed could not exceed more than 110% of the average rent in the area, and two, that those tenants who were already locked into contracts could, by way of a letter of complaint, demand a rent reduction to the same legal average.
And it’s here that the issue lies. Because, despite this law, it’s estimated that 73% of Berlin tenancies signed since the passing of the Meitpreisbremse are, by the letter of that law, illegal, and that the tenants living in those flats could have their rent lowered, sometimes by as much as 60%.
So why isn’t the law being enforced? Well, faced with the option of taking their landlord to court and feeling like they are risking eviction or a deeply unpleasant future relationship with their landlord, tenants simply do not think it is worth the risk. There are now enterprises that will do this for tenants – one notable example is wenigermiete.de (translating as ‘lower rent’) – but most people don’t know about them, or remain put off by the risk that they perceive.
The most obvious thing to do to change this would be for the law to be enforced centrally, with Berlin’s government going through each and every rental contract to check if it is legal. But, this would be an enormous cost for a city government that is not exactly flush with cash, and if we’re being cynical, it’s difficult not to think that the relatively muted backlash that has come from landlords and housing companies is at least partly a consequence of those companies knowing that the enforcement of this law would be the tenant’s responsibility.
More than that though, it’s worth digging into why Berliners feel so unwilling – in a city full of people that count themselves as radical and challenging – to take their landlords to court. The basic problem in Berlin, but one that isn’t spoken about as much in other countries when we talk about Berlin’s rent controls, is actually one of supply. Berlin doesn’t just have rapidly increasing rents, but a huge housing shortage – even more severe than that in London. It is normal in Berlin to apply to rent upwards of thirty flats before accepted by a landlord, and viewings of flats can be attended by as many as 80 people.
And this really, is why Berliners aren’t willing to challenge their landlord: because they fear having to find another flat if the process goes poorly, a search that is even more stressful and precarious than it is in the UK.
What is curious is that in these circumstances, you would expect people to talk about housing supply and the importance of increasing it. But they do not, and it’s difficult not to conclude that that is because Berlin’s politics – especially its left-wing politics – are grounded in a deep nostalgia and overwhelming localism that prevents positive as against defensive policies. They are in many ways the perfect example of the dangers of the ‘folk politics’ Srnicek and Williams rightly deride in Inventing the Future.
Berliners don’t want to increase supply of the housing in the city because they don’t actually want more people coming to live here. The overwhelming sense an outsider gets living in Berlin is not one of a city that has come to terms with the reality that it is now the second biggest in Europe, or of a city that understands that its new residents are not going to go away. Instead, one gets the sense of a city that just wishes everything could go back to how it was in the late 1990s and early 2000s, when rents were rock bottom and the living was good.
The rent freeze – and the campaign for it above and beyond all other potential policies – is reflective of this. It is a policy which, although admirable, is driven by a desire to set the city in aspic, maybe even to turn back the clock by twenty years.
The solution to this, if Berliners did want to try to preserve their city, is obviously a macroeconomic one. Either Berlin needs more houses, or the economy of Europe or Germany needs to be rewired in such a way that other cities become as liveable as the capital, avoiding the Londonisation of Germany. But the tragedy is that this kind of politics, one that reaches outside of the city and deals with national and multinational institutions, is one that repulses every part of Berlin’s anti-capitalist, anti-establishment, and exceptional image of itself. That is to say that the very thing that makes Berlin worth preserving is also what stops it from coming with proper solutions for doing so.
In the face of this, it is profoundly difficult to see how the Berlin housing crisis is solved, and difficult to get away from the fear that Berlin will continue to insist on having a romantic, ‘us on the barricades against the man’ attitude, rather than one that focuses on long-term, macroeconomic solutions.