Sydney and Australia could learn from Berlin

AN entire city is about to benefit from a new law banning landlords from increasing rents.

Berlin will become the first city in Germany to lock in rents from Monday.

The fine print on the new legislation approved by parliament in the German capital stipulates new tenants will pay no more than 10 per cent above the local rental average.

Reiner Wild, managing director of the Berlin Tenants’ Association, told the Guardian Berlin couldn’t risk becoming another “London or Paris”.

“The reality in Paris or London is that people with low income have to live in the further-out districts of the city.”

Rent in Berlin has skyrocketed in recent years. Average rents in the Berlin rose from just over €5.50 ($A7.85) a square metre in 2005 to almost €9 ($A12.85) last year, the Guardian reported. Rent went up by more than 9 per cent between 2013 and 2014 alone. Since 2007 prices have risen by 32 per cent.

Der Spiegel published an article in 2012 chronicling the “intoxicated real estate market”.

The article read: “In this odd environment, two types of people are coming into conflict: On the one hand, there are the foreigners, or new Berliners, who are looking for something to buy. On the other, there are the locals, the old Berliners, who wonder how much longer they’ll be able to stay.”

Berlin is not the only city in the world considering new laws to cap rent rises.

In San Francisco, politicians are considering whether to ban luxury high rise apartments.

A moratorium on luxury housing was introduced in the cosmopolitan city by the bay last month to prevent developers getting their hands on dilapidated street corners.

There, in what was once considered the Mission District, new developments are expected to charge as much as $3500 a week for a unit.

In Sydney, tenants are paying more than ever to keep a roof over their heads. The idea of rent control for Australia’s most expensive city was floated earlier this year by Newtown state Greens MP Jenny Leong.

Ms Leong proposed a maximum of one increase in rent per year, a cap on rent rises at the rate of inflation and more rights for renters facing evictions.

“I think it’s pretty clear to everyone that Sydney is becoming one of the most expensive places to live in,” Ms Leong told news.com.au.

“We need to look at ways to fix this that reflect community needs, not necessarily what’s going to protect profits or interests.”

But not everybody supports the idea of rent control.