The Mietendeckel “rent cap” may have been illegal, but those celebrating its demise are in for a colossal electoral shock.
Yesterday morning, the Federal Constitutional Court in Germany ruled that the Mietendeckel — the centrepiece of the Red-Red-Green left-wing Berlin state government’s programme — was in fact illegal and immediately void.
Those with an ideological stance on the project immediately took to Twitter. The left decrying that those with wealth and power had scored a victory against those calling for a more affordable and accessible Berlin; the right barely concealing their delight at the destruction of what they (wrongly) considered to be an anti-capitalist scheme designed solely to hurt landlords.
My mind was drawn to conversations I’d had with people over the last year who had chosen to take advantage of the legislation. They were of course warned by the RRG government that this may well be overturned in the courts and that they should therefore keep the money aside just in case. If it was overturned, landlords could and will demand the difference back from all the rent payments where the Mietendeckel had been enforced. For some, this amounts to multiple hundreds of euros a month. In short, this decision will leave a large number of low-income people in a serious financial situation.
It’s all well and good for those to say they advised that money should be kept aside, but the privilege behind this logic is pungent. People who live within the spectrum of poverty take risks all the time, considering which bills to pay and which to not — often on occasion meaning the difference between two meals on a given day or one. When I was struggling a number of years back, given the chance to reduce my rent by hundreds is something I’d have jumped at because I badly needed the money. Would I have kept it aside? Almost certainly not. People in poverty take risks to survive, and many will have calculated that the risk of taking advantage of legislation that might be overturned was one worth taking. Those who advised that keeping the money aside was a simple case of good financial housekeeping must have never experienced real poverty.
Whatever your view on the Mietendeckel (and, being entirely honest, whilst cautiously welcoming any initiative that reduces rent for the poorest I was undecided and was going to wait till we had more reliable data untainted by the COVID crisis about what the legislation did to the rental stock in Berlin) yesterday’s ruling was not good news for those who hoped for a slightly better chance of succeeding in this city. Beyond those who went protesting in Kreuzberg, there are plenty of non-activist ordinary people who will be wondering now whether they have a future in Berlin. This whole situation has, for many, upturned their lives.
This is what made the response by various individuals in the FDP and CDU even more repugnant than it would normally be. To them this was a victory against Berlin’s hard-left. A political notch against a state government to which they are diametrically opposed in every ideological sense. Some senior figures with a little more sense attempted to suggest that there was no cause for celebration, but this was drowned out by the vast number of tweets from those almost popping champagne corks at the defeat of the Mietendeckel. The obliviousness of this post-war victory party to those staring at their bank statements contemplating how they’re going to manage is a disconnect that will come back to harm them.
The truth remains that gentrification continues in Berlin, although it proceeds noticeably slower than cities like London or San Francisco due to the existence of previous rent controls (i.e. the Mietpreisbremse). People unaffected by rent prices should be worried about this. Unaffordable rents don’t just change access to accommodation, they change the entire city. You might be comfortable with the situation as it is, but when your favourite queer venues close because landlords see the chance to make a quick buck, or vast numbers of flats remain unused due to wealthy property speculation from those who will never live in them, or to be blunt, when Berlin becomes a soulless shell with everything that makes it Berlin ripped from its chest, you might think differently. And by then, it’s too late.
Building more is an answer, but not the only one. And this requires political will as well. There will be talk of building on green spaces and there are arguments both for and against. The suggestion I side with, which maintains these spaces, is building upwards. It upsets the NIMBYs (not-in-my-backyard, for those unfamiliar with British political lingo) but as a proud YIMBY, I am most happy for developers to build a skyscraper right next to my balcony. The problem is that these buildings are very rarely social housing. The state *needs* to build or support the development of a stock of social housing, whether they have direct ownership or not. This approach would be far cheaper then the suggested Deutsche-Wohnung & Co Enteignen campaign, which would appropriate housing back from landlords at market price.
This leaves the question about how those renting privately should be looked after, especially those who find themselves moving into a flat with a new contract (and are therefore not necessarily protected by the rent controls). The Mietpreisbremse protects those with a current rental contract, meaning that quite often you will move into a flat where your next-door neighbours are paying considerably less than you because they’ve been there longer. Rent caps are anathema to many from the centre to the right, but the sole suggestion of “building more” will not be sufficient. It assumes that the market is solely Berlin renters, when in fact it includes wealthy speculators too. Some sort of rent cap will need to be part of the solution.
The FDP and the CDU probably think they scored a political goal against the left yesterday, but they’re in for a shock. The attempts by the former to suggest that they were acting solely on a basis of constitutional correctness rather than in an ideological battle against rent caps is as disingenuous as it is transparent. Those who, only an hour after the court ruling, received emails from the landlord demanding backpayment of rent will look at this cynical excuse with derision and contempt, as they should.
The FDP and CDU need to remember that the Mietendeckel was not just some ideological project for the left, but to many in Berlin it was a glimmer of hope. There are arguments as to whether it should have ever been considered so, but to the voters the situation is clear. It was the FDP/CDU who brought the case against this legislation and excuses that it would have happened anyway are (rightly) being seen as a weak attempt at self-absolution. And now the left parties have a strong slogan for the Bundestag elections — “We couldn’t do this because it was ruled not a state matter, put us into federal government so we can change that”.
Those on the right who wanted to thwart an RRG Federal Government may well have inadvertently made it happen.
