【Bloomberg】Berlin’s Rent Cap Is a Case of Communist Amnesia

The idea of capping rents for five years in Berlin, the city where they have been going up faster than anywhere else in Germany (except much cheaper Leipzig), has always smacked of Communist price controls. Now the Berlin Senate has published a legislative proposal on how a rent ceiling is supposed to work – a clear indication that the leftist city government has forgotten why East German communism failed. Politicians and regulators elsewhere should study the bill as an example of what monsters such amnesia can beget.

Between 2013 and 2017, Berlin’s population increased by 5.6% while the number of apartments grew by only 2.6%. The population overhang continues to drive rent increases: While last year both the number of city residents and the number of apartments available to them increased by 0.9%, the average rent went up by 5.4%, according to IBB, the city’s development bank. Longtime residents call this “rent madness” and complain they are being pushed out of their neighborhoods by gentrification and greedy landlords. The three parties governing the city-state – the Social Democrats, the far-left Die Linke and the Greens – have decided to regulate the problem out of existence.

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