Extreme renting: limits on rents leave Berlin’s new tenants vying for homes
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After being kicked out of his Berlin apartment by an unscrupulous landlord last summer, Fabian Missbrenner accrued a catalogue of house-hunting horror stories.
The 33-year-old PhD student from north-west Germany sent off dozens of fruitless requests to visit properties. He joined viewings where 50 people crammed into a small flat, wooing the agent.
Frustrated by the string of rejections, Missbrenner chose to surgically target one newly built apartment block, creating his own customised internet plug-in to alert him when flats in that building were opening up.
It worked, and Missbrenner now lives happily with his Labrador, Luna, in a 28 sq metre studio flat in the fashionable, central district of Prenzlauer Berg, paying €770 a month. But finding a place was a “very stressful” experience, he said. “Moving here is tough.”
Missbrenner’s ordeal came despite policy measures aimed at curbing the pressure on people needing rented homes in the German capital: limits on rent increases, a shortlived attempt to impose a cap on rents and relatively strong tenants’ rights.
Those measures have helped to secure cheap and spacious accommodation for some long-term tenants. But they have failed to prevent high costs and ferocious competition among newcomers and those forced to move, according to campaigners and industry figures.
That has had profound consequences in a city where 84 per cent of households rent.
Berlin, whose mayor once bragged that it was “poor but sexy”, has long viewed itself as a haven for artists, performers and radicals. They were drawn partly by a glut of cheap housing after the fall of the Berlin Wall, when the city’s post-reunification population defied the expectations of planners and shrank rather than grew.
That trend has reversed over the past decade as the city witnessed an influx of newcomers from tech nomads to health workers — plus several waves of refugees, including from Ukraine. The population has swelled from about 3.4mn in 2012 to 3.8mn last year.
Insufficient housebuilding caused the cost of leases to double between 2018 and 2021, according to Deloitte, rising from an average of €7.30 per square metre to €14.30. That catapulted Berlin from 40th place in a ranking of European cities compiled by the consultancy to 19th. In some areas, such as the fashionable neighbourhoods of Friedrichshain and Kreuzberg, the process has been turbocharged: the average rent has tripled.
The new normal still shocks many new arrivals.
“People think it’s hip and cheap,” said Lorna Ather, who is responsible for relocating employees to Berlin for the German takeaway giant Delivery Hero. “But it’s not.”
A recent drop in German house prices had done little to alleviate the situation, said Konstantin Kholodilin, a housing expert at the German Institute for Economic Research.
“In the case of rents there’s no adjustment,” he said. “Incomes are more or less stable but the population is increasing and this means that it is pushing up demand for housing, and rents are increasing.”
In keeping with its fierce leftwing streak, Berlin has flirted over the years with rental caps and even expropriations. The city has imposed strict curbs on Airbnb. In 2020, the state government froze prices for five years — a cap that was later overturned by Germany’s constitutional court.
But landlords in the city are still bound by a separate, federal restriction that forbids them from increasing rents by more than 10 per cent above a local benchmark rate when taking on new tenants. There are also limits on rent increases on existing contracts.
Extreme renting
This is the third part of a series on Europe’s rental crisis:
Part 1: How rising rates turned the screws on tenants across Europe
Part 2: Santorini’s teachers forced to rough it in Airbnb haven
Part 3: Limits on rents leave Berlin’s new tenants vying for homes
Part 5: London’s bidding war escalates as rising rates hit buy-to-let
Part 6 (Bonus): Amsterdam’s two-tier system pits tenants against landlords
The controls mean some Berliners who have lived in the same apartment for years still have highly favourable living arrangements, paying as little as a few hundred euros a month for a spacious home. They have a strong incentive to stay put even if their children have grown up and moved out.
Newcomers and tenants forced to move, especially those on lower incomes, have meanwhile been pushed out to the edges of the city. The scale of the demand has given huge power to property owners, a situation ripe for discrimination and exploitation.
“I’ve had landlords tell me that they won’t rent to people called Mohammed,” said Elliot Herman, a Berlin-based relocation consultant.
Daniel Halmer, founder of Conny, an online legal service advising renters, said that although tenants’ rights are stronger in Berlin than other cities, exploitative landlords are still able to routinely ignore rent control provisions. “There are no sanctions,” he said. “There’s zero incentive to comply with the law.”
Halmer’s company won about 2,000 cases on behalf of tenants last year, with its clients being overcharged by an average of €300 a month.
Both native and adopted Berliners warn that the squeeze on housing and waves of gentrification are changing the fabric of the city.
Liz Magno, a Berlin-based American sculptor and painter, has been forced to move repeatedly over the past six years because of redevelopment and rising rents. She came to the city, she said, because she felt “artists were respected and free to experiment as they wished, whether it made money or not.” Magno added: “It would be a shame if this was lost.”
As in many of Europe’s global cities, most experts agree the solution is to build more homes, including social housing.
But the federal government is falling short of its target to build 400,000 new homes a year, with just 295,000 constructed last year. Berliners have expressed opposition to encroaching on green spaces — including in a 2014 referendum against building on part of the former Tempelhof airfield.
That shortfall is worsening as inflation and higher interest rates have pushed up the cost of construction, according to Reiner Braun of Empirica, a real estate consultancy. “Building costs have risen twice as fast as inflation,” he said.
Missbrenner, the PhD student, said that he might have thought twice about moving to Berlin if he had known of the city’s housing problems. “It’s probably good that I didn’t know beforehand,” he said. “I imagine it puts a lot of people off.”
Data visualisation by Martin Stabe
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