Authored by Rainer Zitelmann via RealClearMarkets,
Across Europe, the housing shortage is getting worse - and left-wing parties have discovered it as a central political issue. Recently, the far-left party DIE LINKE even won the elections in Berlin, the German capital, campaigning on a demand to nationalize large housing companies. In Spain, hundreds of thousands of people have demonstrated in favor of stricter regulations.
But do such measures really help?
We should learn from Germany's experience, where a form of rent control known as the "Mietpreisbremse" (rent brake) was introduced back in 2015 and has since been tightened several times.
Yet this rent control policy is producing precisely the opposite of what it was intended to achieve. That is the conclusion of a new doctoral dissertation completed at the University of Regensburg, Europe's leading university for real estate studies.
In Germany, the gap between rents paid by existing tenants and rents charged for newly rented apartments is growing wider. In his 2026 dissertation, "Housing Markets Between Regional Heterogeneity and Political Intervention," Lars Jagemann analyzes 107 German cities. He finds that the gap between existing rents and asking rents for new leases averages 20 to 25 percent, reaching as much as 50 percent in major metropolitan areas.
This creates what economists call a "lock-in effect." As Jagemann explains, existing tenants hold on to their inexpensive, legally protected rental contracts
