Affordable Housing

Did Berlin just crack the code to keeping rents affordable?

By Virginia K. Smith  | July 10, 2015 - 10:30AM

As Berlin has gotten increasingly hip and wealthy over the past several years, it has been facing an affordable housing crisis that's looked painfully familiar to most New Yorkers. But after enacting new rent control laws last month, it seems the city may already be turning the tide on a problem that's baffled just about every other major urban center in the developed world.

CityLab reported yesterday on the city's new "rental price brake" system, which has already reduced the average cost of new rental contracts by 3.1 percent since it was implemented on June 1st. Under the new mietpreisbremse law, a standard median rent per square meter is set for each district based on census data, and no new rental contract within the area is allowed to go more than 10 percent above that amount.

This new legislation comes on the heels of a number of unusually strong legal protections for tenants in Germany, as CityLab points out. These include "Community Defense" laws to forbid luxury conversions in rapidly gentrifying areas (can you imagine someone trying this in Bushwick?); a ban on apartments being used as short-term vacation rentals; and the generally open-ended tenancies that are typical in Germany, in which a renter can only be kicked out for actively doing something wrong.

These strong pro-tenant laws exist in part because a large portion of Germans rent instead of own, meaning that the nation's rental population also includes wealthy and influential voting constituents. But given the way in which NYC's ultra-pricey sales market is pushing more and more well-off, would-be buyers into the rental market, could we expect our city's policies to follow suit? And for luxury developers to be be totally understanding about the whole thing? And for Cuomo and de Blasio to be able to put their disagreements behind them to work this one out? One can dream.


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