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Berlin rent freeze tenants left out in the cold after ruling by German court

Re-starting construction is the only way to fix the housing crisis

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Protesters chant slogans and hold up banners and placards while demonstrating against a federal court ruling that strikes down Berlin's rent cap. Photo: Getty Images

Protesters chant slogans and hold up banners and placards while demonstrating against a federal court ruling that strikes down Berlin's rent cap. Photo: Getty Images

Angela Merkel

Angela Merkel

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Protesters chant slogans and hold up banners and placards while demonstrating against a federal court ruling that strikes down Berlin's rent cap. Photo: Getty Images

As the late Swedish economist Assar Lindbeck memorably put it, “In many cases rent control appears to be the most efficient technique presently known to destroy a city – except for bombing”. And yet that’s never kept economic populists from passing new rent curbs.

One of the most radical such attempts, watched by cities all over the world, was enacted last year in Berlin. This week, however, Germany’s constitutional court ruled that the law is null and void. In the short term, this will cause even more chaos in the city, forcing many tenants to pay back rents. Worse, the judges’ reasoning won’t put the controversy to rest but stoke it instead, making rent controls an unfortunate hot-button issue in this election year.


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