Rent | Higher rents sold as good news

Quarters of the Berlin-Mitte housing association at United Nations Square Photo: dpa/Sebastian Gollnow Tens of thousands of Berliners will have to pay an average of between 15 and 30 euros more in rent per month in the future. If you're lucky, it might only be a few cents. For a very large apartment it can be up to 100 euros. Over the current year there will be rent increases for around 90,000 tenants of the seven state-owned housing companies Berlinovo, Degewo, Gesobau, Gewobag, Howoge, WBM as well as Stadt und Land. This was said on Wednesday by Ingo Malter, managing director of the city and state and also spokesman for the state-owned housing company (LWU).

Shortly after the Berlin House of Representatives election, numerous tenants found corresponding letters in their mailboxes - and before the election winner, the Left Party, can make good on his promise to completely freeze state rents for a year and allow a maximum of one percent increase per year for the period thereafter.

For many households, the higher rent will already apply as of December 1, 2026, complained the Berlin Tenants Association (BMV). It is the fourth major wave of increases in just three years. “The state’s own people are questioning the will of the voters,” commented BMV managing director Sebastian Bartels. All parties except the CDU announced during the election campaign that they would limit rent increases.

On behalf of the housing companies, Ingo Malter asserted that the timing of the rent increases had nothing to do with the election date. He admitted that rent increases could of course also be reversed if the state of Berlin, as the owner of the housing companies, demanded this. But politicians should consider what economic effects this would have. A rent cap could not inspire housing companies. It wouldn't mean anything good. Malter urged not to be put in this shackles and assured: “We can do the affordable housing business – with rent increases!”

The LWU can argue that their existing rents only rose by 22.1 percent between 2016 and 2025, but that consumer prices rose by 27.4 percent in the same period, the nominal wage index by 44.3 percent, the costs for new buildings by 80.7 percent and the costs for maintenance and repair by even 93.2 percent.

Malter has already experienced a rent freeze once - many years ago under the then urban development senator Katrin Lompscher (Left). Based on this experience, the managing director says that companies first have to save on new construction and renovation if necessary, and then also think about personnel savings.

Malter sharply polemicized against the Left's promise, welcomed by the Greens, to socialize large private housing stock of more than 3,000 neighborhoods in the capital. Berlin is dependent on private investors, said Malter. As a result of the change in ownership, not a single new apartment will be created.

In addition, the LWU was considered by supporters of expropriation as a “piggy bank” to finance the compensation payments that would then be due. However, a maximum of four percent interest was charged for loans that would have to be paid off over 100 years. That is risky. “Interest rates have also been higher before.” If they rise above the four percent mark again, the construct will collapse.

»The national economy in Berlin will suffer as a result. "That's as certain as the Amen in church," complained Malter about the possible socialization. He wanted to say that, even if it wasn't popular to express himself that way.

As if to make unpopular rent increases palatable to the population - but it should also be a coincidence - the Association of Berlin-Brandenburg Housing Companies (BBU) presented a study on the value creation effects of the state-owned housing companies in Berlin on Wednesday in the old boiler house of the Berlin-Mitte housing association. The association commissioned this study from the Investitionsbank Berlin. Co-author Carsten Pretzell presented the results. According to him, the LWU has a total economic impact of 4.8 billion euros annually, of which almost 3.4 billion euros would directly benefit Berlin.

Everything possible is taken into account: the almost 6,000 employees of the LWU and the 32,800 jobs, for example of craftsmen and construction workers who live from orders from the seven housing companies, as well as jobs in the industrial companies that supply materials to the construction companies. All of these people pay taxes and social security contributions, go shopping or go to the swimming pool and thus provide additional jobs in shops and leisure facilities. 1.7 billion euros in added value is attributed directly to the LWU, 2.5 billion euros to suppliers and 600,000 euros to consumption.

How are rents developing and how many apartments were built last year? The LWU usually focuses on these two indicators, said Pretzell. That is also legitimate and understandable. But it's not everything.

Managing director Malter is satisfied with the study results. »The results show: Strong state-owned companies use the whole of Berlin. Our investments create added value and employment in many areas of the Berlin economy." He appealed to "place our rent policy against this background." Malter believes this news can comfort tenants who now have to pay 30 euros more in rent every month.

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