Great Britain

Berlin's rent cap offers a new way of thinking about Britain's housing crisis | Alexander Vasudevan

For most tenants in the UK – conditioned to the prospect of rising rents, poor living conditions and the ongoing threat of eviction – the very idea of receiving a letter from their landlord outlining a reduction in their monthly rent would be absolutely unthinkable. And yet this is exactly what has happened to thousands of renters in Berlin, as the second stage of the city’s rent cap, or Mietendeckel (literally a “lid” on rents), came into force on Monday.

The first stage of the cap was part of a new law passed by the city’s House of Representatives in January 2020. It came into effect on 23 February 2020, after which point landlords were strictly forbidden from charging rent for existing leases that were in excess of any rent that had effectively been agreed by 18 June 2019. According to the second stage, any rents that exceeded the acceptable rent caps by more than 20% – calculated according to residential location and the quality of fittings – had to be reduced. Landlords that did not comply with the new law faced heavy fines.

In a city where the vast majority of residents are renters, it’s estimated that more than 365,000 households are eligible for the rent reduction. A report in Der Spiegel had the number as high as 512,000 apartments. The measures undertaken by authorities in Berlin were also met with widespread approval, as more than 70% of Berliners were supportive of the plans to freeze rents and introduce upper limits.

None of this should come as a surprise. The recent history of housing in Berlin, like so many other cities across the global north, is one of financialisation, privatisation and speculation. During the past couple of decades, hundreds of thousands of social housing units have been sold off across the city, while building regulations have been relaxed, and local authorities’ ability to plan and build new homes has been drastically curtailed in favour of private developers.

State-sanctioned urban renewal became, in turn, a cover for the widespread displacement of local residents and the dismantling of their communities and social networks. According to one major study by the real estate firm JLL, Berlin had the highest investment volume in residential housing across all of Europe in 2018. The rapid transformation of the housing market in the city was also accompanied by sharp increases in rent. As the German sociologist Andrej Holm has recently noted, rents in existing tenancies in Berlin have risen by 36% since 2009 while rents on new tenancies have increased by 65%.

At the same time, the rent cap passed by the red-red-green coalition (a coalition of social democrats, greens and the left) in Berlin is the latest chapter in a long sequence of housing struggles in a city with a deeply entrenched history of protest and resistance, which stretches back to at least the mid-19th century. Protest camps, rent strikes and housing occupations have all become part of a well-established arsenal of political actions and tactics in Berlin and, in recent years, a broad coalition of tenant groups and housing activists have focused their energies on the city’s “rent madness” (Mietenwahnsinn).

The rent cap can be seen as a short-term success that offers protection to tenants and a much-needed emergency break against the cycles of displacement and eviction that have become a routine experience for many Berliners. And this is to say nothing of the ongoing pandemic, where the very right to secure housing has taken on even greater urgency. Renewed efforts to highlight the value of housing as a basic social need can only help in mapping out a new direction for cities that, in the words of the critical urbanist David Madden “reverses the inequities this pandemic has exposed”.

This is a new direction that is sorely needed in the UK, where the mere mention of a rent cap has tended to trigger a shrill Pavlovian response among many commentators and policymakers. Not only has very little – if anything – been done to effectively tackle an intensifying housing crisis across the UK, but recent proposals to deregulate the planning process will only serve, in the eyes of many experts, to scale back the few regulations that exist to provide safe, affordable and habitable homes in the country.

The rent cap in Berlin also offers an object lesson in the rather different role that city governments might play in the UK in empowering local citizens concerned with basic issues such as housing, education and jobs. The emergence of municipal political movements across Europe in cities such as Barcelona, Madrid, Messina and Naples provides fertile new ground for progressive and, in some cases, radical political alternatives that involve citizens in the day-to-day running of their cities.

And yet, a note of caution is needed here. Commentators in the UK have a tendency to romanticise developments in Germany in the absence of meaningful change in Britain. The rent cap has many detractors in Germany, including landlords’ associations, who have argued that the cap will only lead to housing shortages and scare off investors. Their attempts to halt the second stage of the new legislation were rejected by the German constitutional court in October. The court is expected, however, to weigh in on the issue in the new year, and some tenancies have reportedly included a “shadow” rent, offsetting the amount lost due to the cap in anticipation that the law will be struck down.

A rent cap should not be seen as a panacea. As Andrej Holm reminds us, such a policy must be used to stimulate a return to “socially oriented” housing construction and generate a wider conversation around land allocation and non-profit property policies. The efforts by local campaigners in Berlin to secure a referendum on the socialisation of apartments owned by private housing associations shows that the such a conversation has already begun in the city. This is a conversation that cities in the UK – whether it is about rent caps or public housing – urgently need to have.

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