From London and other overpriced cities, we often look to Berlin as a beacon of progressive housing politics. Renting in the capital, as some 84% of households do, is associated with secure, unlimited, rent-controlled tenancies. Berliners have rallied behind moves to freeze rents and expropriate hundreds of thousands of apartments from corporate landlords. But in the last few years, Berlin’s housing crisis has escalated to unprecedented proportions, with median asking rents across the city rising by 21.2% in 2023 alone. Far from “poor but sexy”, as it was once dubbed by its own mayor, Berlin now has one of the most overheated property markets in the world.
The reasons for Berlin’s housing crisis are complex, yet there is one simple and resolvable mechanism driving the stratospheric rent increases of recent years: the large-scale exploitation by landlords of a strange loophole in German federal law. If apartments are rented out as “temporary” and “furnished”, owners can evade tenancy regulations and charge considerably higher rents.
