Berlin's increasing rents could force thousands of social welfare recipients out of their homes if the senate cannot come to an agreement on new Hartz IV living costs.
The city's ruling left coalition (SPD/Linke) is working on new regulations, but rents for many Hartz IV recipients now lie well above the prescribed benchmarks.
"We assume that the benchmarks will be increased for apartments of all sizes," said government spokesperson Anja Wollny.
Currently, the benchmark for those in two-person households is €444. Social welfare recipients paying more than this are forced to move into cheaper accommodation.
Berlin's rent review published last week showed rapidly increasing rental costs in the city over the past two years.
Rents increased on average by six percent over the past two years, with renovated old builds (built before 1918 up until World War Two) and newly built apartments in Mitte, Pankow and Charlottenburg recording greater-than-average increases. Small apartments in "middle income" areas such as Wrangelkiez, Friedrichshain and parts of Neukölln also saw disproportionately high rental increases due to gentrification and displacement, according to the Berlin tenants' association, the Berliner Mietverein.
Dozens of protesters occupied a house in Kreuzberg following the publication of the yearly rent review.
Left-wing activists occupied a house in Schlesische Strasse in Kreuzberg's Wrangel neighborhood in a call for "good and cheap homes" before being driven out by around 200 police officers.
The state handed over the apartment block in 1993 to leading Berlin-based property agents GSW, a public body that was privatised in 2004. No. 25 Schlesische Str and a number of other council buildings remained in the GSW's possession. The GSW allegedly neglected the house for years and increased rents by threefold in 2008 upon announcing renovation plans. All but two of number 25's occupants moved out that year.
Green Party Mayor for Friedrichshain and Kreuzberg Frank Schulz supported the occupation as "justified." Berlin is experiencing a shortage of affordable dwellings, Schulz said.
Even more controversial is that the house has been practically empty for a number of years, he added. The GSW sold the property just a few days before the occupation to a private investment company without notifying the relevant state authorities, despite being obliged to do so. The Mayor confirmed that to his knowledge the property agents had not asked anyone.
At the press conference to mark the rent review's publication, Ingeborg Junge-Reyer, Berlin's SPD senator for Urban Development, denied that Berlin suffered a shortage of apartments. The senator described the increase as Berlin "catching up" to other comparable cities.
"This year's results show that Berlin's rent levels remain much lower than in other cities [...] Berlin is still one of the best value cities in Germany," Junge-Reyer said.
The Green Party charged the SPD/Linke coalition with ignoring Berlin's "tense housing situation." The rent review is a "damning indictment" of the coalitions housing policy, said Renate Künast, the Green's mayoral candidate.
The Berliner Mietverein concluded that the reduction in cheap apartments represents a problem because wages have stagnated.
"The Senate's engagement is not credible because at the state level nothing is being done to prevent the decline in the availability of inexpensive rental properties," Reiner Wild said, who is head of the Mietverein.
The association of property agents in Berlin and Brandenburg believes rapidly increasing rents are a sign of positive economic development in the capital.
Berlin's rent review provides a framework for the city's renting population to compare rental prices in their area. The review compares dwellings built the prior to World War One, in the inter-war years, the post-war years and new builds in low, middle and high income areas. Some building types in more expensive areas saw rental increases by up to 10 percent, while costs did sink in some cases.