Forward to the past: Short-term effects of the rent freeze in Berlin

Arbeitspapier

In 2020, Berlin enacted a rigorous rent-control policy: the 'Mietendeckel' (rent freeze), aiming to stop rapidly growing rental prices. We evaluate this newly enacted but old-fashionably designed policy by analyzing its immediate supply-side effects. Using a rich pool of rent advertisements reporting asking rents and comprehensive dwelling characteristics, we perform hedonic-style Difference-in-Difference analyses comparing trajectories of dwellings inside and outside the policy's scope. We find no immediate effect upon announcement of the policy. Yet advertised rents drop significantly upon the policy's enactment. Additionally, we document a substitution effect affecting the rental markets of Berlin's (unregulated) satellite city Potsdam and adjacent smaller municipalities. On top, the supplemental quantity analyses reveal a stark reduction of the number of advertised rental units hampering a successful housing search for newcomers, (young) first-time renters and tenants aiming for a different housing opportunity.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: DIW Discussion Papers ; No. 1928

Classification and Topics

• Classification: Wirtschaft ; Semiparametric and Nonparametric Methods: General ; Index Numbers and Aggregation; Leading indicators ; Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
• Subject: First-Generation Rent Control ; Rent Freeze ; Urban Policy ; Rent Price ; Supply Disruptions ; Berlin

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hahn, Anja M. ; Kholodilin, Konstantin A. ; Waltl, Sofie
• Event: Veröffentlichung
• (who): Deutsches Institut für Wirtschaftsforschung (DIW)
• (where): Berlin
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/229901
• Last update: 10.03.2025, 11:42 AM CET