German constitutional court strikes down Berlin rent cap (updated)

Adler Real Estate AG

15/04/2021 08:45

(Adds details)
    BERLIN, April 15 (Reuters) - Germany's Constitutional Court
ruled on Thursday that a law putting a rent cap on apartments in
Berlin is invalid.
    The state of Berlin does not have the authority to enact the
law, as the federal government is responsible for such
decisions, the court said in its ruling.
    "There is no room for the legislative power of the federal
states due to the power of federal law to block it," said the
court. 
    The rent cap came into force on Nov. 23, 2020, forcing
landlords to cut rents for more than 300,000 tenants and
freezing them at that level for five years. 
    The real estate industry had criticized the measures as
unconstitutional, while some experts have said the rent freeze
could worsen Germany’s housing crisis by scaring off real estate
investors eager to build in urban centres.
    Shares in property companies with assets in Berlin, 
including Deutsche Wohnen  DWNG.DE  and Vonovia  VNAn.DE , rose
on the ruling.  urn:newsml:reuters.com:*:nL8N2M81T5 
    

 (Reporting by Madeline Chambers, editing by Kirsti Knolle)
 ((Madeline.Chambers@thomsonreuters.com; +4930220133578;))