Berlin approves five-year rent freeze in a bid to halt soaring housing costs
Rent prices in Berlin will be frozen or lowered for five years thanks to new legislation aimed at slowing down gentrification and skyrocketing housing costs in the German capital.
In January, Berlin's parliament passed the progressive law and became the first federal state in Germany to introduce a rent cap.
The new law puts a cap on residential rental prices for new and existing rental contracts, according to Germany's international public broadcaster Deutsche Welle (DW).
DW correspondent Malte RohwerKahlmann says the Berlin government has stepped in to regulate the market which was largely determined by supply and demand.
In Berlin, 60% of Germans are tenants, RohwerKahlmann reports.
They are going to freeze the rent at the level that they are currently at for at least five years.Malte RohwerKahlmann, Deutsche Welle correspondent
They are also going to establish caps so, if you sign a new rental contract, there will now be a cap that you landlord can't exceed.Malte RohwerKahlmann, Deutsche Welle correspondent
If [tenants] are in a contract that is over the cap, [they] can now claim their money back.Malte RohwerKahlmann, Deutsche Welle correspondent
Landlords who don't comply with the new rules can be fined up to 500,000 euros.
Meanwhile, various property and political groups are expected to challenge the rent cap in court.
Listen to the Deutsche Welle reportage for more:
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