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Germany’s Constitutional Court annuls Berlin’s rent price control

The German Constitutional Court announced on Thursday the annulment of a controversial law to control rent prices in Berlin aimed at containing the skyrocketing housing costs in the capital.

This law, which came into force last year, “is not compatible with the Constitution and is consequently annulled,” declared the Karlsruhe-based court (south-east).

The legislation on rents is the competence of the federal state, which is why the Berlin government exceeded its powers when promulgating this law, the justice explained, supporting the appeal presented by the conservative and liberal opposition parties of the city.

The text, which came into force in February 2020, was approved by 85 votes out of a total of 150 in the Berlin Parliament, in which the parties of the left and the Greens are the majority.

The price control established a rent freeze for two years, and then a limitation on their increase.

This emblematic device affected all the old homes in the private park, that is, around 1.5 million, according to the city.

The text, which was limited to 2025, also provided that particularly high rents could be lowered.

Its aim was to combat the sharp rise in rents in recent years in Berlin, which, although one of the largest capitals in Europe, suffers from a housing shortage.

Previously described as “poor but sexy”, the metropolis of 3.6 million people became a dynamic economic hub – especially in the field of new companies – that has attracted a young and qualified workforce in recent years. ten years, although the pandemic stopped this trend.

According to the latest figures from the property portal Immowelt, Berliners spend on average a quarter of their salary on their accommodation.

Only 18.4% own their homes, one of the lowest rates in Europe.

Real estate professionals and artisans had also opposed the law. In their view, the rent freeze may limit the modernization work undertaken by landlords, in particular in terms of adapting to environmental improvements.

bur-ilp / smk / mar / zm / mab / d

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