The rent table will have a much higher significance going forward than it has anyway. The key word in the context of the planned rent control measure called the “rent freeze” is “local reference rent.” So far, German courts have generally accepted the rent table as an objective standard. But whether the rent table truly qualifies as objective reference has been subject to serious doubt lately.

In proceedings before the District Court of Charlottenburg over a rent increase, Professor Walter Krämer of the Institute for Economic and Social Statistics of the Dortmund University of Technology was appointed as expert witness. His expert opinion demonstrated that Berlin’s rent table is by no means compiled in line with accepted scientific principles. But this is precisely what Article 558d, Section 1, German Civil Code, mandates for a qualified rent table. The expert demonstrated that the random sample on which the Berlin Rent Table is based is not representative. For the Berlin Rent Table of 2013, around 12,000 data records for more than one million flats were analysed. While this would have been a sufficient number as such, fact is that only 4,000 tenants actually responded. The expert also showed that the response rate varies from one segment of the population to the next. The expert, a tenured professor for statistics, argued that this results in serious statistical distortions.

It was not the only statistics error the professor revealed: Gross rents were incorrectly converted into net rents, extremevalue adjustments were incorrectly applied, and threshold limits were hazy, while special characteristics were not properly factored in. These things represent “not the standard in modern mathematical statistics,” reads the opinion by the statistics professor, a slap in the face of the authors of the Berlin Rent Table. He also called the breakdown of Berlin’s city limits into only three residential locations arbitrary. From a statistics point of view, he argued, it is indispensable to divide the residential locations into inner and outer districts.

So far, most lessors and lessees have accepted the rent table. But this is bound to change. After all, it has only been a year that the rent increase cap for current rents was lowered to just 15 percent over a three-year period. It prompted first law suits against the rent table, filed by landlords in Berlin. I encourage any landlord who doubts the probity of the rent table not to accept it and to take legal action against it.

I expect the courts to be positively flooded with law suits once the rent freeze is introduced, because the rent table will – unlike now – also be definitive for setting the rent level of new leases. Policymakers have actually realised that the existing rent table is at odds with the reality on the ground. The need for reforming it was therefore written into the coalition agreement. The Social Democrats, however, intend to “solve” the problem by exacerbating it, as they are planning a law defining the way in which the rent table is to be compiled. It will stipulate the past ten years, rather than the past four years, as calculation basis. In combination with the planned rent freeze, this would permanently check rental growth, and could even result in a government-mandated rent cut.