Law & Politics
Analysis of Berlin housing policy
SPD dossier on the rent cap: Internal criticism of Lompscher's approach
An internal SPD paper exposes legal and economic weaknesses of the planned rent cap. The authors call for a complete restart of the project with all relevant departments involved.
Peter Guthmann
The debate around Berlin's rent cap has taken a new turn with an internal SPD dossier. Published in the trade journal "Das Grundeigentum," the paper dissects Senator Katrin Lompscher's (Left Party) plans across three areas: legal deficiencies, economic risks and political miscalculations.
Lawyers in Lompscher's own department have doubts
According to the paper, the Senate departments for justice, economics and finance were bypassed during the drafting of the key points document. Critical legal opinions, including one from the Bundestag's Parliamentary Research Service, were ignored. Instead, the plan relied on a single, favorable expert opinion. Even lawyers within Lompscher's own department reportedly considered the proposal unlawful. For property owners, this means a law built on these foundations is likely to face immediate legal challenges.
Threat of construction activity collapsing
The dossier warns of a "rapid collapse" in new construction. The rules for new builds are unclear, particularly regarding re-letting. If re-lets also fell under the price ceilings, developers would lose all planning certainty. The overall market development would deteriorate further. The authors also view the planned intervention in modernization rules as problematic, since this area is already regulated by federal law. Investments in apartments in Berlin would become legally uncertain.
Capital flight and the "Bremen effect"
The paper warns of investment shifting to the suburbs and other markets. In the long run, a "Bremen effect" could set in: the permanent loss of higher-income population groups and private investment. How the transition back to regular tenancy law after five years would work also remains unanswered. The risk of sudden rent spikes after the law expires has not been examined.
A frozen rental market increases tenancy duration and reduces moves. This particularly affects tight markets in Neukoelln or Friedrichshain-Kreuzberg, where vacancies are already scarce.
Demand for a restart
The authors call for the rent cap project to be taken away from the Senate Department for Urban Development and restructured as a Senate-wide initiative with working groups from economics, law and housing. For owners and investors, the dossier confirms that the planned rent cap rests on legally uncertain ground.