In a recent ruling, the German Federal Constitutional Court rejected the appeals of landlords against Berlin's rent cap, which was extended in 2020. The judges viewed this regulation as not constituting a severe infringement on property rights and stated that the cap aims to achieve 'legitimate goals' in tight housing markets. This decision has sparked concern and surprise among economists, who believe the effectiveness of such rent controls is questionable.

Economists emphasize that studies indicate rent caps can diminish housing supply, as they make renting less financially appealing for private investors. Consequently, while the court's decision supports the intention to make housing more affordable, it is argued that it could result in a less available rental market. By legally mandating lower rental prices, the policy may deter investment in new housing developments.

The implications of this ruling are significant for future housing policies in Germany, highlighting the tension between legal frameworks aimed at protecting tenants and the economic realities of property investment. The court's stance aligns with several policy goals but also reinforces the debate about the long-term impacts of rent controls on the housing market.