European Business Schools Librarian's Group
Department of Economics Working Papers,
Vienna University of Economics and Business, Department of Economics
Forward to the Past: Short-Term Effects of the Rent Freeze in Berlin
Anja M. Hahn (), Konstantin A. Kholodilin () and Sofie R. Waltl ()
Additional contact information
Anja M. Hahn: Vienna University of Economics and Business
Konstantin A. Kholodilin: DIW Berlin & NRU HSE St. Petersburg
Sofie R. Waltl: Vienna University of Economics and Business & Luxembourg Institute of Socio-Economic Research (LISER)
Abstract: 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.
Keywords: First-Generation Rent Control, Rent Freeze, Urban Policy, Rent Price, Supply Disruptions, Berlin
JEL-codes: C14; C43; O18 December 2020
Note: PDF Document
Full text files
WP308.pdf
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