Berlin’s Rent Controls Are Unconstitutional and Worse
Germany’s highest court has nixed one of the world’s most draconian rent caps. That’ll only fire up the controversy more.
Unhappy tenants.
Photographer: Michele Tantussi via Getty Images
As the late Swedish economist Assar Lindbeck memorably put it, “In many cases rent control appears to be the most efficient technique presently known to destroy a city — except for bombing.” And yet that’s never kept economic populists from passing new rent curbs.
One of the most radical such attempts, watched by cities all over the world, was enacted last year in Berlin. This week, however, Germany’s constitutional court ruled that the law is null and void. In the short term, this will cause even more chaos in the city, forcing many tenants to pay back rents. Worse, the judges’ reasoning won’t put the controversy to rest but stoke it instead, making rent controls an unfortunate hot-button issue in this election year.