(Bloomberg) -- The planned freeze on residential property rents in Berlin would be unconstitutional, the former president of Germany's constitutional court said in an opinion published by Funke Media newspapers.
Hans-Juergen Papier concludes that the new Berlin law would contradict a rental cap previously established in 2015, in a written opinion for the commercial and residential real estate lobby group GdW. Federal law would therefore block the Berlin legislation, since legal bodies must ensure laws don't contravene one another.
Deutsche Wohnen SE gains 1.1% and Vonovia SE is up 0.6% on Friday, outperforming a 0.1% gain in Europe's Stoxx 600 Real Estate Index.
Berlin's coalition government -- made up of Social Democrats, the Greens and the Left party -- is trying to rein in landlords, after a sharp increase in living costs led to mass demonstrations and a grassroots initiative demanding the government buy out large property owners.
To contact the reporter on this story: Jan-Patrick Barnert in Frankfurt at jbarnert3@bloomberg.net
To contact the editors responsible for this story: Beth Mellor at bmellor@bloomberg.net, Monica Houston-Waesch
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