Law & Politics
Berlin housing market 2015
Berlin rent referendum 2015: property industry pushes back
Haus & Grund and the IVD rejected the 2015 rent referendum plans. The associations warned of consequences for investment and new construction. A look back at the debate.
Peter Guthmann
In spring 2015, an alliance of citizens' groups drafted a law that would have reshaped Berlin's housing policy. The property industry responded with sharp criticism and warned of consequences for owners and for Berlin as a place to invest.
What the draft proposed
The bill targeted the stock held by municipal housing companies and publicly subsidised apartments. Around 426,000 units would have been affected. Among the demands was sweeping tenant protection against eviction, even in cases of non-payment of rent. The draft also envisaged tighter controls on rent increases and modernisation costs, which would have limited the room for manoeuvre of municipal companies such as Degewo, Howoge and Gesobau.
Industry reaction
Juergen Michael Schick, then vice president of the IVD, called the eviction protection for non-paying tenants a "bad joke" and the draft as a whole "unworkable and unaffordable." Carsten Brueckner, head of the property owners' association Haus & Grund in Berlin, described it as "a step towards socialism." Both associations feared the proposed rules would discourage investment in new construction and maintenance of apartments in Berlin.
Berlin's housing market in 2015
The initiative emerged against a tight market backdrop. Berlin had experienced strong population growth for years, demand for housing was climbing and rents were rising. Just weeks after the referendum push, Berlin's rent brake (Mietpreisbremse) took effect in June 2015. The rent referendum, however, went much further. Many market participants saw it as an attack on property rights and free-market principles.
What it meant for owners and investors
Although the draft focused on municipal housing, the debate affected the wider market. Uncertainty about future market developments grew. The political climate risked deterring investors, which would have weighed on construction activity. Abolishing the right to terminate leases for non-payment would have raised the financial risk for landlords.
What happened next
The organisers ultimately failed to gather enough signatures for a referendum vote. But the debate over stronger regulation of Berlin's housing market continued and laid the groundwork for later initiatives, including the rent cap and the "Deutsche Wohnen & Co. enteignen" referendum.