German Lawmakers Seek to Overturn Berlin Rent Freeze in Court

(Bloomberg) -- Lawmakers from Angela Merkel's Christian Democratic Union and two other political parties are challenging measures to impose restrictions on Berlin's rental market, claiming they're unconstitutional.

Politicians from the CDU, its sister party the Christian Social Union and the Free Democratic Party, asked Germany's highest court to overturn the left-leaning Berlin government's move to freeze rents for five years. The legislation, which came into force on Feb. 23, is intended to ease the burden on tenants after a property boom caused rents to double over the past decade.

A CDU said it mounted the challenge because the Berlin authorities have violated the rights of landlords. Issues such as limiting rent should be regulated on a national level rather than by individual states, the German Interior Ministry said in November.

Berlin's ruling coalition “has caused unprecedented chaos in the city's housing market,” Jan-Marco Luczak, one of the lawmakers who initiated the legal challenge, said in a statement. “Nobody knows whether to comply with federal or state law.”

Local landlords filled a similar lawsuit in March.

Residential-property companies including Deutsche Wohnen SE have criticized the market reforms, warning that they risk undermining investment in much-needed new housing projects. The Berlin government has said it expects the law to withstand legal challenges.

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