The German Constitutional Court declares the Berlin Rent Cap Law void due to a jurisdictional issue

The decision of the German Constitutional Court judges on what is known as the "Berlin Rent Cap Law" was expected to come this summer. But, as the Berlin daily newspaper reported in the headlines this week Die Tageszeitung: "The judges are in a hurry." The result of this haste is that the magistrates of the court based in Karlsruhe decided this Thursday to declare the Berlin measure null and void.

Germany's coalition government housing policy fails

Germany's coalition government housing policy fails

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The judges have declared the Berlin rule, applied since the end of February 2020, "incompatible with the Basic Law" and, consequently, "null", according to the statement issued this Thursday by the Constitutional Court. The judges justify the measure based on a question of competences, recalling that the Länder Germans, like Berlin, do not have the capacity to legislate the price of rents, something that corresponds to the institutions of the federal legislative power.

“Since the federal legislator has regulated the rental price in sections 556 and 561 of the German Civil Code,” the statement issued from Karlsruhe reads, “there is no place for the legislative power of the Länder".

The decision of the German Constitutional Court is a serious political blow for the left-wing coalition that governs Berlin. His rent cap law was considered one of the "central projects" of the Berlin Executive, made up of a coalition led by the social democrat Michael Müller in which politicians from the Greens and the leftist party also participate. Die Linke.

TO Die linke, precisely, it is your turn take the worst disappointment, since that party belongs to the main person in charge of the measure, Sebastian Scheel, the minister of the city-state of Berlin for Urban Development. In a reaction picked up by the media on Thursday, Scheel was as "surprised" by the speed with which the judges have decided on the issue as disappointed by the consequences of that decision. "It is a hard day for tenants," quoted the Die Tageszeitung Scheel's reaction.

Since last November, by virtue of the Berlin regulations now declared void, tenants who paid higher prices in their rent than those established by the authorities' indices they had seen their rents lowered. But those savings, taxes for rentals that exceed 20% of the limit price recognized by the authorities, could now become a problem. Because they are potentially subject to "claims" from the owners.

A survey published a few days ago showed, in fact, that 47% of Berliners who had benefited from these discounts did not have the money to face these possible claims. Hence, from this very Thursday Scheel promised that the tenants would not be left without the protection of the authorities.

"We will not abandon the tenants "

“We will not abandon tenants who are left in an emergency situation. It is a question of political decency ”, declared Scheel to the also Berlin daily Der Tagesspiegel.

From the entry into force of the Scheel and company law in February 2020, 1.5 million homes in the German capital have benefited. The initiative had much of a recognized political experiment that other large European metropolises were looking at, whose inhabitants also suffer from how the housing market has tightened, which has led to the rise, among other things, in rental prices.

With the Berlin measure, it had already been achieved that in 2020 rents fell in the German capital for the first time in 16 years, according to recent data from the Berlin Investment Bank (IBB, for its German acronym). “We chose this path for good reasons. We knew we were entering an unknown area and we wanted to explore this question of competence, "said Scheel on account of the measure against which the judges in Karlsruhe decided this Thursday.

In view of the decision against his flagship initiative, Scheel is now asking the Berlin government for a plan to cushion the impact that the Berlin real estate market may have on the tenants that the authorities had put on it. That plan includes, among other things, the creation of an emergency fund to help pay landlord claims to tenants.

Conservatives celebrate that the rent cap is "history"

The magistrates of the Constitutional Court reacted to an initiative of legislative control of the Parliamentary Groups of the Christian Democratic Union (CDU), the party of Chancellor Angela Merkel, of the Social Christian Union (CSU) of Bavaria and of the liberal party, the FPD. Precisely in these matches there was no limit this Thursday when celebrating the decision of the Karlsruhe judges.

The Interior Minister, for example, the Social Christian Horst Seehofer, who also serves as Minister for Housing in Germany, celebrated this Thursday that "the rent cap law is history." "It's okay, because from a housing policy point of view that was the wrong path," said this politician, ignoring the fact that he will go down in history in this legislature for failing in terms of housing policy.

His management has made it impossible for the 'grand coalition' not to achieve the goal of 1.5 million homes in Germany being built in the Teutonic real estate market between 2017 and 2021. That was the goal that Merkel's government had set for itself.

With a few months to go until the legislature ends, that goal now seems unattainable. The experts also considered that goal as "modest" given the housing emergency that cities like Berlin are experiencing.


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