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‘Stressed and depressed’: How Berlin’s rent cap fiasco has affected foreign tenants

Tens of thousands of people in Berlin were hit with huge rent hikes and thousands of euros in arrears when the city’s rent cap fell through. Many of those affected were foreigners. Here are some of the experiences of those affected. 

‘Stressed and depressed’: How Berlin’s rent cap fiasco has affected foreign tenants
A view of Berlin. Photo: picture alliance/dpa | Christoph Soeder

One of the most stressful things about moving to Berlin or within the city is flat-hunting. Not only is there a lack of homes, but new rental contracts are often ridiculously high – or tenants are forced to pay too much through a sub-let because they can’t get their own place.

So when the Berlin government introduced a rent cap that came into force in February 2020, residents – many of them foreigners trying to make a new life in the city – felt like they finally had access to affordable housing.

But after more than a year of reduced rent costs, Germany’s highest court announced in April that the Mietendeckel was unlawful, resulting in tens of thousands of people being plunged into debt and facing rent increases in the middle of Germany’s third wave of the pandemic.

READ ALSO: ‘Bitter setback’: What’s the reaction to Berlin’s rental cap law being scrapped?

It’s a shocking story that was covered by media around the world. But behind the headlines, real people have been suffering stress, anxiety and anger over this debacle.

We put together an online survey and 50 people – most of them non-German – shared their experiences with us.

Just under 90 percent told us their rent was rising due to the decision. A total of eight percent said their rent was going up, and two percent weren’t sure.

‘Forcing people to pay rent back payments should be illegal’

Almost everyone who got in touch with us said no-one should have to pay the rent “arrears”.

The Berlin government that brought in the rent cap pleaded with landlords to cancel the back payments. But as landlords are now legally entitled to claim back revenues, many have chosen to do this.

READ MORE: ‘Extraordinary situation’: What can you do if your Berlin landlord demands rent cap arrears?

Nick, 34, said his rent was going up by €475 per month. He isn’t sure if he has back payments yet, but if so it will cost him about €2,850.

“Forcing people to pay for previous months rent should be illegal,” said Nick. “Or at least renters should be able to spread it over a year.”

Nick said the decision is having a major impact on his life plans. “My apartment is way overpriced – now I’m thinking of moving,” he said.

Roshnan, 31, in Charlottenburg, is seeing a €200 rent increase and has to pay back €2,000. 

“The (Berlin) government should subsidise all ‘shadow rent’ and previous payments,” said Roshnan. “Sadly it (the support from the Berlin Senate) is only for people with low income. A normal earning person has to take over the burden to himself or herself.

“If I have to pay more rent as well as the shadow rent, I have no savings. Salaries in Berlin are already below average.”

READ ALSO: Berlin to offer loans and grants to tenants after rent cap defeat

Hannah, 29, in Adlershof, has to pay €800 in arrears.

“I think that for the people who are struggling most to be punished financially for a decision they didn’t make is absurd, especially in a pandemic.”

In Charlottenburg, Ankita, 27, is facing a rent hike of €230 per month and a bill of about €2,200.

“At least a strict rule of no backdated (rent) should be ordered,” she said.

Ankita said the ruling is having a big impact on her life.

“It will definitely affect us, my boyfriend is already finding it hard to search for a full time job,” she said. “With this increase and backdated (rents) we will be left with no savings and might struggle for basic livelihood at least a year.”

“It should not have happened like this,” said a 28-year-old in Schöneberg who is seeing a €400 per month rent increase.

“Everyone in Berlin is experiencing some sort of financial instability because of this in these odd times.”

Nils, 31, in Neukölln, faces a €150 per-month rent increase and €1,500 of arrears.

“I believe they should completely cancel the debt and also offer a grace period for those affected to find another place to rent,” said Nils.

“I am very disappointed. The quality of life is quite low in Berlin, with salaries being low and rents high. My friends have to pay back large amounts and they are considering moving out of Berlin, especially those who have families and need a bigger living space.”

‘Berlin has been playing games with residents’

Lots of people questioned why Berlin put a law in place that was evidently shaky in the first place. The Mietendeckel was a flagship policy of the coalition of the centre-left Social Democrats (SPD), the Greens and the far-left Linke (Left) parties.

It was challenged by MPs from Chancellor Angela Merkel’s centre-right Christian Democratic Union (CDU) and the pro-business Free Democrats, who are both in opposition in Berlin.

The federal constitutional court agreed with their argument that rent policy falls under federal law not the jurisdiction of Germany’s 16 states.

Jon in Schöneberg said his rent was increasing by €380 per month. He is unsure if he has to pay back the difference but if so he will have to fork out around €2,000.

“I am furious,” he said. “Whilst I am lucky that I have the necessary funds, my partner has not worked since the start of the pandemic so this additional rent would have supported him.

“Whilst Berlin isn’t made of money it’s the Senate’s mess and they should compensate all tenants for their inadvisable experiment. Surely legal advice in advance of the rent cap would have indicated the conflict with Basic Law?”

A Berlin resident with a sign that says ‘housing is a basic right.’ Photo: picture alliance/dpa | Daniel Reinhardt 

Linda, 30, in Friedrichshain has to pay €210 extra per month and faces a bill of back payments worth €1,150.

“I am still confused on why they enforced a law before it was approved or not,” she said. “By doing so, they have basically forced people into debt! I have never had a single debt in my life and now I owe a full salary to my landlord.”

A 44-year-old in Charlottenburg said: “The Berlin government coalition have been playing games with tenants. It has been clear to them that the rent freeze was unconstitutional but they went ahead anyway.”

Olivier, 27, in Neukölln is facing a €400 per month rent hike. He said: “I’m mad. How could they not know that they weren’t respecting the constitution? And now we pay the price.”

Meanwhile, Max, 33, in Prenzlauer Berg has to pay €150 extra per month.

“They (the Berlin Senate) need to accept that they made a huge mistake making this decision and applying it before the court ruling, and help those who are affected the most.”

READ MORE:

‘My priority is not to starve’

Some people are in an extremely tough situation – and at the mercy of their landlord. 

One reader, who asked to remain anonymous, said he is facing back payments of around €4,000.

“They (the landlord) emailed me after the cap was overturned asking for the complete amount at the latest by May 1st. It just kind of shows the greediness and immorality of the whole situation. 

He said he was “stressed and depressed”, adding: “My priority right now is to pay this amount and not starve.”

A 40-year-old in Friedrischain said their rent will go up by about €192 per month – and they owe around €1,200. 

The 40-year-old said the Berlin government should help tenants “through legal support with lawsuits to prove that every single rent is too high”.

Karima, 31, in Friedrichsfelde, will see her rent go up by €470 per month.

“I’m a single mom who lost her job,” she said. “This decision will put my financial situation into hell. I won’t be able to afford anything for my little daughter. I started thinking about moving out of Germany…this is so crazy.”

Another anonymous person said they faced rent arrears of €4,000. 

“Both my partner and I lost our jobs in the pandemic,” the reader said. “Now we have to borrow money just to pay back the landlord. On top of it, if the landlord can increase rent again and if we don’t find jobs it means we can’t even afford rent anymore.”

Andrew, 27, in Freidrichshain is also facing a rent hike.

“Many friends who have lost jobs due to the pandemic will likely be unable to repay this rent and as such may have to move out,” Andrew said. “However they may not be able to find a new place to live as they owe money. It is a cruel decision.”

READ ALSO: Berlin rent freeze: 340,000 tenants ‘paying too much’ for housing

Germany has put people ‘deeper into crisis’

Gerasimos, 26, is seeing a rent hike of €468 and a bill of €2,340.

He described himself as “angry”. Lots of people have lost their jobs or been put on Kurzarbeit (reduced working hours) in the pandemic, resulting in pay cuts.

“Germany offers no support to the middle class, it is obvious that everything is in favor of the rich,” he said. “Me and all my friends are losing money and trying to survive with 60 percent of our salaries while everything gets more expensive.”

Flats in Berlin in February 2021. Photo: picture alliance/dpa | Jörg Carstensen

He said during the pandemic with tough restrictions and a slow vaccine rollout, Germany had put “its people deeper in crisis”.

Paula, 29, is seeing her rent costs go up by more than €400 and has to pay back around of €5,000.

She urged the Berlin government to cover the back payments of residents because it was their “mistake”.

“I feel disheartened,” she said. “With the rent cap, my monthly rent value finally got into a level which was manageable and would bring me considerable improvements on my quality of life, as well as allowing me to boost my savings.”

Lots of people agreed that the fabric of Berlin was changing forever. 

A 48-year-old woman, whose rent is going up 50 percent said: “My heart sank. This city is being crushed and will never be the same haven for free spirits. I’m sad for my friends in the arts who never have enough money on a good day.”

How should Germany address the housing shortage and rent hikes?

Lots of respondents told us they supported a Germany-wide rent cap put in place at the federal government level. This topic will be a big issue at the elections later this year when Chancellor Merkel will stand down.

Jon in Schöneberg said: “I think a rent cap is essential and has to happen soon. A quick review of ImmobilienScout (real estate site) since the rent cap was ruled illegal shows that landlords have wasted no time in putting properties on the market at ludicrous rents. Average in Schöneberg seems to be getting to €20 per square metre.”

Hannah said she was in favour a rent cap. “In addition I would hope the country would reallocate funds to encourage more building of sustainable affordable living options, and maybe include a law discouraging speculative real estate purchasing,” she said.

Swathish, 32, said the Berlin law “needs to be implemented again”

“Landlords and real estate agents taking huge advantage of the loopholes in the existing rent law is giving power to few people over the society,” Swathish said.

Einar, 34, lives in Munich and is a former Berlin resident. 

“Build more housing to force the rent down, buy the buildings directly so that the government can put down the rent on apartments in different areas of Berlin to force the price down,” said Einar. “Make it easier to create non-profit for owning and renting out apartments.”

But not everyone is on board with the idea of strict rent controls. Giuseppe, 47, said a Germany-wide rent cap is a “crazy idea”.

Thanks to everyone who shared their experience with us. Although we weren’t able to include all the submissions, we read each of them and we are truly sympathetic to the challenges everyone is facing right now. 

If there’s anything you’d like to ask or tell us about our coverage, please feel free to get in touch.

Member comments

  1. A simple comment or question to all those people should have been – the city told everyone to put the reduction aside because it might happen. why didn’t you listen?

    1. Hi AA, I think many people did but still made decisions on housing connected to the rent they were paying under the Mietendeckel as that was the current situation. Another question might be: Why did the Berlin government not hit pause on the initiative as soon as it was challenged in court? Then if it was ruled lawful, it could have brought in and if not (as the case was) it wouldn’t have caused these massive problems.

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OPINION & ANALYSIS

OPINION: Sweden’s ‘historic investment’ has failed to solve the housing crisis

Five years after Sweden's government promised to solve the country's housing crisis with a "historic investment", things are as bad as ever, David Crouch argues. Radical action is needed.

OPINION: Sweden's 'historic investment' has failed to solve the housing crisis

Forced to move house 20 times in the past eight years, Maria’s situation was desperate. She and her daughter had arrived in Stockholm from Latin America in search of a better life. She found work, no problem – but housing was impossible.

“Sometimes I was paying 12,000kr in rent and it was very hard because I only had 15,000kr in monthly salary,” says Maria (not her real name). So she took a high-interest loan of 240,000kr and tried to bribe someone in the Housing Agency to get to the front of the queue for affordable housing.

But she was caught. Her fate is unknown. And she didn’t even get an apartment.

This recent story, in the excellent newspaper of the Tenants’ Association, sums up the problems facing people who move here to work. The market for rental accommodation is tight as a drum. Finding a home means competing with Swedes, but with all the disadvantages of being an outsider. So people find themselves pushed into short-term, insecure rental contracts at inflated prices.

It wasn’t supposed to be this way. Five years ago this month, the government announced a “historic investment in housing”, including subsidies for construction companies, easing restrictions on building permits, and making more land available.

The housing situation at the time was grim. Spotify had threatened to leave Sweden if things didn’t improve – how could the company attract skilled young people to a city where there was nowhere for them to live? More than half Stockholm’s population – 600,000 people – were in the queue for a coveted rental apartment, because strict regulation meant these rents were low. But it took as long as 20 years to get to the front of that queue.

The result was a thriving rental property black market, with large bribes changing hands. Many tenants exploited the situation by sub-letting their homes, or parts of them. “It is almost impossible for immigrants and new arrivals to penetrate this market – it is all about who you know and how much money you have,” said Billy McCormac, head of the Fastighetsägarna property association, in 2015.

READ ALSO: 

So what has been the outcome of the grand promises the government made five years ago? House-building at the time was already rising steadily, and it has continued to do so. Look around you in the big cities and you will see that new apartment blocks have sprung up here and there.

But we shouldn’t go only on appearances. To understand the reality, we need to look at some numbers.

The gap between demand for housing and the existing housing stock has indeed started to shrink. “As housing construction has gradually increased and population growth has begun to slow down, the gap has decreased since 2017,” Stockholm’s Housing Agency noted in December.

The Agency has broken records four years in a row for the number of rental homes it has provided. The proportion of young adults living independently has also increased somewhat, the Tenants’ Association found, probably due to the pace of construction.

But this smidgen of good news is outweighed by an avalanche of bad.

The average queuing time in 2021 for a Stockholm apartment was more than 9 years; for somewhere in the city centre you have to wait 18 years. Only 936 homes came with a waiting time of less than one year. More than three-quarters of a million people are now registered in the queue for housing – a big increase on five years ago.

The rate at which the housing shortage is shrinking is nowhere near fast enough to alleviate the huge accumulated demand.

Assuming that the current pace of construction can be maintained, it will be the end of this decade before any significant dent is made in the deficit of homes, according to Boverket – the Swedish National Board of Housing, Building and Planning. The current rate of construction is “only marginally more than the long-term need”, it says.

The challenge is even greater when it comes to producing affordable housing, Boverket says, especially for the young and those entering the housing market for the first time. Almost one in four young Swedes up to the age of 27 are forced to live at home – the second-highest figure since the measurements began.

There are already signs that housing construction is actually slowing down, owing to higher building material prices, rising interest rates and an incipient labour shortage. Construction prices rose by more than 8 percent last year, and there is concern in the industry that war in Ukraine will further affect costs, in turn slowing the pace of building.

There is another fly in the ointment, a consequence of the collapse of Sweden’s governing coalition in November. The new, minority administration was forced to adopt the opposition’s budget, which halted investment subsidies for house building, throwing the construction industry into confusion.

In short, the “Swedish model” for providing people with a roof over their heads is failing. The folkhemmet, or “people’s home”, has not enough homes for its people.

Swedes themselves understand this: in a survey last month, nine out of ten voters said they thought that politicians did not take the housing shortage seriously.

We have waited too long. It is time for fresh thinking and radical action to solve the housing crisis.

David Crouch is the author of Almost Perfekt: How Sweden Works and What Can We Learn From It. He is a freelance journalist and a lecturer in journalism at Gothenburg University

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