In many places, a landlord can't just decide to raise the rent. When I signed the contract for my current apartment, the landlord needed me to sign an official form they had to send to the city. The form informed me of the rent the previous occupant paid and stated the applicable laws that regulated by how much the rent could be raised (based on inflation, changes in interest rates etc.). What I don't know, but assume, is that it's easy to fight for the rent to be lowered to the legal limits even after accepting signing a contract with rent above the legal limits.

> why not increase the price to the point where 90% of contenders lose interest

Because that's illegal, even without the rent cap in Berlin.

A market response to supply and demand is illegal? What law would do that if not a rent cap?

§556d, 1 of the German civil code.

https://www.gesetze-im-internet.de/bgb/__556d.html

It's illegal here to demand a rent more than 10% higher than the "ortsübliche Vergleichsmiete", which is approximately the local rent averaged over the last 6 years (exactly defined in §558)

More generally, you cannot simply ask for astronomical prices for anything in Germany just because you know that people are in a position where they have to pay them, that's "Wucher" (racketeering) and against public decency, which is generally illegal according to §138.

https://www.gesetze-im-internet.de/bgb/__138.html

Interesting. That sounds a lot like rent control if the wiggle room is only 10% over a 6 year moving average.

It is rent control - which basically exists throughout Germany. Even in SF rent controlled apartments can increase some % per year, it is just controlled how much. In Germany this is often done by looking at the region's average price for similar properties and then fixing some limited increase against that. This is distinct from the rent cap that was overturned, which stated no rise in rent at all for five years.

There are multiple kinds of rent caps. One is the maximum annual raise for existing tenants.

Another one is vague and based on the "Mietspiegel", which lists appropriate rents according to quality and location.

If the rent exceeds this by too much, you can sue for "Mietwucher" (rent usury).

Rent control prevents from increasing by more than a set amount every year. Theoretically you can wait for decades raising the rent every year

§ 291 StGB Wucher

Equally, why not build more housing until there is a 4% vacancy rate? This seems to have worked wonders in SF.

NIMBYism, environmental regulations, building codes and lack of money and interest by the state.

Berlin had the nice example of a few square kilometers of the Tempelhof airport field being available. Public demanded to make it a park instead of constructing housing.

Almost anything with a tree on it is impossible to build on, and even if there is a building permit for the housing, attaching it to public transports like the S-Bahn or Subway is next to impossible nowadays.

Building codes in Berlin are not much weirder than in the rest of Germany, but they also serve to make constructing housing harder. E.g. there is a strict limit to building height, which limits buildings to 5 storeys (iirc) even in high-demand high-density areas.

Money is especially tight for the state of Berlin, while they get subsidized with lots of money from the other states (Länderfinanzausgleich), they still cannot afford to construct much of the necessary housing or the associated infrastructure themselves. Private investment usually will go elsewhere because the political environment in Berlin is poor. If there is rent control in Berlin and no rent control in Hamburg, of course money will go to Hamburg first.

There is also no political will to fix the above.

No experience with the building codes in Berlin, but a least the N story limit makes sense to me. It would totally destroy the look and feel of many parts of the city of this wasn’t in place.

What I think is a bigger problem is the countless vacant lots all over the city. Even centrally there are tons of them, e.g. with only a one story supermarket or parking lots (as mentioned above) or sometimes it’s just overgrown. I wonder what the deal are with those. My guess is that the city already sold them in more dire times and now owners just sit on them until the real estate prices makes the time ripe to build something there. Can’t find another explanation for it.

Berlin has a lot of real-estate with unclear ownership, due to seizure of property during the nazi time and communism, sometimes multiple times. Add a few levels of inheritance and you get real estate that is unusable because it belongs to a lot of people at once, all in a decade long court battle with each other.

because, sadly that's illegal in all of germany.