The state government of Berlin has announced that it has set aside millions of euros in financial aid, which is set to be given out as loans and grants to tenants that have been affected by the court's decision to overturn the city’s rent cap (Mietendeckel).

Berlin government to offer financial support

On Tuesday, the Berlin Senate announced that it would be offering financial support to tenants who are facing price hikes and have to pay back rent payments after the city’s rent cap was overturned earlier this month by the Federal Constitutional Court. According to state authorities, around 365.000 residents were due to have their rent reduced by the rent cap.

Many residents of Berlin had their rents temporarily lowered when the second phase of the rent cap was introduced last year. These tenants are now facing an instant increase in their rent payments, and many are having to pay back the difference in rent for the months the rent cap was in place. The Senate estimates that as many as 40.000 households will now struggle to pay the increased rents and back-payments. Tenants could be faced with eviction in some cases.

Berlin’s rent cover fund

The city government has set aside 10 million euros to help tenants who are in desperate need of assistance. The amount of money tenants receive in financial aid depends on their income, with all households with an income of up to 280 percent of the federal income limit being eligible. The current annual federal income limit is 12.000 euros for a single-person household - so, any single-person household with an annual income of 33.600 euros or under would be eligible.

The Senate plans to commission the Investitionsbank Berlin (IBB) to offer the loans on their behalf. In a press release, it said the loans “must be repaid and are granted interest-free. If tenants are unable to repay all or part of the money through no fault of their own, the loan will be converted to a grant and its payment (partially) waived.”

Tenants will have to submit information about their situation, including their rental contract and proof of payment for the last three months, to be considered for financial support. Any applicants that are receiving benefits should check with their local citizens’ office if any additional payments can be covered by housing benefit. Funds could be available as early as May 1.

Calls for landlords to waive repayments

Some private landlords have already announced that they would waive repayments for tenants affected by the overturning of the rent cap. State-owned housing associations in Berlin will also not be demanding rent back from tenants. However, others, including private housing firms, have said they will be collecting repayments.

Berlin’s Housing Senator, Sebastian Scheel, has called on more landlords to waive back-rent landlords. "Some landlords have already announced that they will waive repayments or offer deferments. I appeal to all landlords to follow this path. It is self-evident that the state-owned housing societies do not charge back,” he said.