Berlin is freezing rents for the next 5 years, and it's a major step in the city's efforts to prevent an increasingly serious housing crisis
- The Berlin government will freeze rents in the city for five years starting in January 2020, according to Reuters.
- According to the report, rent in the German capital has doubled since 2008.
- Other cities around the world are also dealing with an affordable housing crisis, causing residents to resort to extreme measures to find places to live.
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In an attempt to solve Berlin's housing crisis, the government will freeze rents for five years, according to Reuters.
While Berlin is still one of the more affordable cities in Europe, Reuters reports that rent in the city has doubled since 2008. Over the past decade, the city's population has grown by about 40,000 people per year. Around 85% of Berlin residents choose to rent homes instead of owning them.
The rent freeze will go into effect in January 2020. However, to prevent landlords from quickly raising prices, the law will operate with respect to the rents in place as of June 18, 2019.
Major cities in Germany like Hamburg, Munich, and Frankfurt are also seeing a decrease in affordable housing. According to Reuters, the government hopes to build 1.5 million new units across the country by 2021, which equates to 375,000 units each year. However, only 285,900 new units were built in 2018.
Other cities across the globe are also dealing with affordable housing shortages. In Hong Kong, property prices have shot up 200% in the past decade. Housing costs in the city are so high that some local residents are considering buying haunted homes. In 2017, Business Insider reported that over 200,000 people in Hong Kong live in 20-foot "coffin homes" where the starting rent is around $180 a month.
In the US, San Francisco is home to the most competitive real-estate market in the country. An influx of tech workers has caused one of the biggest price swells in the city's history. With the average-priced home now costing more than $1 million, even fixer-uppers are selling for as much as $600,000. Around 60% of tech workers in the area say they cannot afford a home in the area.