Law & Politics
Housing policy Berlin
Berlin Rent Referendum 2015: Senate and initiative reach agreement
The Berlin Senate and the rent referendum initiative have agreed on capping social housing rents and investing 1.4 billion euros in housing construction. What the deal means for property owners and investors.
Peter Guthmann
A public referendum on Berlin's housing policy has been averted. The initiators of the rent referendum and the Senate administration reached a compromise that will now be written into law.
Social rents capped, priority quota raised
Rent for social housing will be capped at 30 percent of household net income. Tenants who would have to pay more will receive a subsidy from the state of Berlin. When re-letting apartments, the municipal housing companies (WBG) must allocate at least 55 percent of their existing stock to holders of a housing entitlement certificate. At least 30 percent of newly built WBG apartments are to be subsidised social housing.
1.4 billion euros for housing construction
The housing mandate of the publicly owned companies will be enshrined in law. The WBG's equity capital increases by around 300 million euros. All profits will remain within the companies to finance new construction, acquisitions and refurbishment. In addition, publicly owned land is to be transferred to the companies to speed up the construction of new apartments in Berlin.
In total, the Senate is providing around 1.4 billion euros over five years: approximately 900 million euros for new construction subsidies, 300 million euros for the equity increase, 200 million euros for rent compensation and 40 million euros for modernisation.
What this means for the property market
The measures directly affect the publicly owned housing stock. Indirectly, however, the agreement sends a signal to the entire Berlin apartment market. Regulation of the rental market remains high on the political agenda, as the introduction of the rent cap in June 2015 already demonstrated.
The stronger focus on the WBG could intensify competition for land. At the same time, the gap between the regulated and the open market segment is widening. In boroughs with high demand like Neukoelln, this is likely to push rents in the unregulated segment even higher.
Before the changes take effect, Berlin's House of Representatives still needs to approve the legislation.