The view from an apartment window of the German capital is getting more and more expensive
As BBC notes, the cost of renting housing in Berlin has risen sharply in recent years. On average, a monthly apartment rental in the city now costs about 1,100 euros.
Berlin is not the most expensive city in this regard. According to housinganywhere.com, it is surpassed by Barcelona, Rotterdam, Milan and London, and within Germany itself by Munich, Hamburg and Frankfurt.
London is the undisputed champion of Europe in terms of high cost: according to the London Evening Standard, a three-room apartment in the not-so-prestigious but centrally located Southwark district (southeast of the capital) costs 1,573 pounds (1,970 euros) per month.
However, the cost of renting housing in Berlin grew by 7% in the first quarter of this year alone, and has doubled over the past ten years: a prosperous economy attracts more and more people to large cities, both from Germany itself and from the rest of Europe.
Events in Berlin were closely watched throughout Germany – the problem of unaffordable rents has affected other cities in the country as well. Now the bill will be put to a vote in the regional parliament. The Social Democrats, who are in power in Berlin, propose to freeze rents across the country.
And the most radical residents are demanding exotic solutions. Several months ago, the movement Expropriate Deutsche Wohnen & Co. emerged in Berlin – named after the largest private real estate company in the capital. Activists propose to expropriate housing from large landlords who own more than three thousand apartments and redistribute it. Of the approximately two million rental apartments in Berlin, Deutsche Wohnen owns 110,000, and the second-largest company Vonovia owns 44,000 apartments.
Critics point out that the situation on the real estate market varies significantly across different regions of the country.
Harald Simons from the University of Leipzig calls the initiative "completely absurd" and emphasizes that about 70% of all rental properties in Germany belong to small landlords who own between two and 20 apartments. Such an activity, the expert believes, could scare off investors, and would also be expensive for taxpayers – according to estimates by Berlin authorities, about 36 billion euros.
German Chancellor Angela Merkel from the CDU agrees with her coalition partners from the SPD: the shortage of affordable housing is a problem that needs to be solved. But she believes that a different solution is needed – to build more new housing.
If Berlin approves the new plan, it will be retroactively effective from June 18 of this year – to prevent landlords from sharply raising rents in the next six months. Although some of them did not wait and raised rents for their tenants on the eve of the vote.
Many real estate companies have also criticized the project. In their opinion, it will not allow landlords to invest sufficient funds in the renovation of the housing stock and bringing it into compliance with stricter environmental standards. Moreover, the bill includes various exceptions – in particular, for new buildings, where rental costs could skyrocket.
And German developers also draw attention to these figures: construction costs in the country have risen by a third since 2005, while in neighboring Netherlands they have increased by only 6%.