Berlin Risks Return to ‘Poor, But Sexy’ Era With Rent Freeze

Over a decade ago, when Berlin struggled to attract investment, then-mayor Klaus Wowereit famously called the German capital “poor, but sexy.” After a boom that drove up rents by more than 50% since 2011, the city may return to that era -- just not as cheap.

By freezing rents for five years, the local government is taking the most radical step yet to protect residents from the fallout of a housing crunch. While the move could provide short-term relief, the risk is a bigger hit down the road. Capping rents threatens to scare away investment, stalling everything from upgrading windows to constructing much-needed new apartments.