Germany is well known for its large rental sector which typically offers secure tenancies and protection from eviction, making renting an attractive alternative to home purchase. Since the 1970s, a system has pegged rent increases to a reference rent for similar-quality local dwellings, established at regular intervals (usually every four years). Rent cannot rise more than 20 per cent above this reference rent over a three-year period. Only unsubsidized, market rental dwellings can inform reference rents. A database of these rents (Mietspiegel) provides a countrywide benchmark for tenants and landlords indexing rents. There are some exceptions: for example, social housing apartments may follow different rules in some areas.
While the Mietspiegel moderates rent increases, they have still risen in high pressure markets. Further, it does not prevent rents from rising above inflation and income changes to unaffordable levels. That is why in 2015, under tight housing market conditions, a law was passed enabling German federal states to moderate rents for new leases in cities or municipalities. This “brake” measure ensured that rents could only rise a maximum of 10 per cent above local comparison rents.
Many cities across Germany have since implemented this measure, however tenant associations consider that the impact has not always been sufficient to curb excessive rent increases. These systems are under constant pressure from competing interests and require well-informed policy stewardship and legal reinforcement.
 For additional information, see https://www.berliner-mieterverein.de/uploads/2018/01/Rent-Control-Rent-Brake-in-Germany-IUT-1-2018.pdf.
 Rent indexes are compiled on a local basis based on this database. For an example of an index that relates to Berlin, see https://www.stadtentwicklung.berlin.de/wohnen/mietspiegel/de/downloads.shtml.https://www.mieterbund.de/mietrecht/ueberblick/mieterhoehung.html