BERLIN, Jan. 30 (Xinhua) -- As the first state in Germany, Berlin's local government finally passed a much discussed law on Thursday which will introduce a rent cap in the German capital.
With the new law, rents in the German capital would be frozen for five years and could not exceed the level "effectively agreed" in mid-2019, according to the new law.
The rent cap does not apply to buildings that were constructed after 2014. According to the passed law, social housing, housing provided by social agencies and dormitories are also excluded.
"The rent cap will again create something like an eye level between lessors and tenants," said urban development senator Katrin Lompscher of the Left Party.
After the law was passed, the conservative CDU which is not part of Berlin's local senate reaffirmed its intention to sue against the rent cap at the Federal Constitutional Court. Germany's real estate and housing industry was also critical.
The rent cap would mostly affect small lessors "without tackling the real causes of the precarious situation on the Berlin housing market", according to the federal association of free real estate and housing companies (BFW).
"Only the construction of new apartments can solve the housing problem, whereas capping or lowering rents exacerbates the problem," the BFW explained on Thursday.
