University research finds German rent control policy is widening housing gaps

A doctoral dissertation from the University of Regensburg analyzed 107 German cities to study housing markets. The research concluded that the rent control policy, known as the "Mietpreisbremse," is producing the opposite of its intended goal. The study found that the gap between rents paid by existing tenants and asking rents for new leases is growing. This gap averages 20 to 25 percent nationally, reaching as much as 50 percent in major metropolitan areas.

The findings suggest that the existing rent control measures are contributing to a "lock-in effect." This effect occurs because existing tenants hold onto their legally protected, inexpensive rental contracts and avoid moving into the more expensive rental segment. This trend highlights the unintended economic consequences of political intervention in housing markets.

An institute previously provided guidance regarding current national housing market trends.