Balancing Rent Control and Property Rights

Across major European cities, the housing crisis has moved from warning signs to full-scale emergency. Between 2010 and the first quarter of 2025, house prices in the EU rose by 57.9% and rents by 27.8%, driving rapid increases in rental costs and shrinking affordable options. Market speculation, inflation, and the explosion of short-term rentals have all contributed to shrinking the supply of stable, reasonably priced housing. Since the 2008 financial crash, housing has moved to the center of urban political debate, exposing how decades of deregulation and welfare retrenchment have shaped today’s crisis.

As housing production slowed down and public stock was sold off or left to decay, European governments increasingly turned housing over to market forces. The consequences are stark. In London, the rent-to-income ratio has climbed to nearly 38%, and in Berlin, average rents have more than doubled in the last decade. Tenants are under growing pressure. Eviction requests in Italy from 1983 to 2022 show a clear rise in arrears-related cases, which have increasingly become the leading cause over the decades.

Governments have responded with a familiar tool: rent control. Measures to cap or stabilize rents are being reintroduced across multiple jurisdictions in an attempt to curb speculation and protect tenants. But these interventions raise complex legal questions. How far can states go in regulating the rental market without infringing upon landlords’ constitutional property rights? And what happens when these laws are tested before the courts?

The return of rent control

Rent controls are once again a central political tool in European cities grappling with soaring housing costs and rising social inequality. Governments are turning to regulation as a means of stabilising rents and ensuring access to housing. However, while these policies often enjoy broad public support, they are frequently challenged in the courts on constitutional grounds.

At the heart of the legal debate lies a fundamental tension. On the one hand, rent controls are designed to protect tenants, correct market failures, and support the public interest. On the other hand, they represent limitations on landlords’ ability to freely use and profit from their property. This conflict plays out in both national constitutional frameworks and under the European Convention on Human Rights (ECHR), specifically Article 1 of Protocol 1, which protects the peaceful enjoyment of possessions. By contrast, the Court of Justice of the European Union (ECJ) has not issued any rulings directly focused on rent control, although EU law may still touch upon the issue indirectly.

According to the ECHR, any interference with property must pursue a legitimate public aim, be proportionate, and strike a fair balance between the general interest and individual rights (see e.g. Anthony Aquilina v. Malta, paras. 52-68). National constitutional systems typically echo this logic, requiring that state action not be arbitrary or excessive. As a result, courts are increasingly tasked with adjudicating where exactly that balance should lie.

Hutten-Czapska v Poland as a leading example

The European Court of Human Rights addressed this tension directly in the 2006 case Hutten-Czapska v. Poland. The applicant owned a property subject to rent regulations so strict that rental income failed to cover even basic maintenance costs. Moreover, the legal framework denied landlords both compensation and the possibility of evicting tenants. The Court found that this imposed a disproportionate burden and violated the applicant’s right under Article 1 of Protocol 1 of the ECHR.

The judgment was clear: while states may regulate the rental market in pursuit of legitimate social goals, they must do so in a way that allows landlords to retain meaningful economic use of their property. Rent control is not inherently unlawful, but it must not cross the line into what effectively amounts to expropriation without compensation or legal remedy.

This ruling has become a key reference point for national courts navigating similar challenges. It underscores that constitutional and human rights protections do not prohibit rent regulation outright, but they do set limits on how it is designed and applied.

Germany’s court draws the line when rent rules cut into profit

In Germany, the Federal Constitutional Court (Bundesverfassungsgericht) has developed a robust jurisprudence on rent control, anchored primarily in Article 14 of the Basic Law, which guarantees the right to property. Between 1980 and 2021, the Court ruled in nearly twenty major rent control cases, consistently upholding the view that property rights include not only ownership but also the right to derive income from rental agreements.

A major test came in 2020, when Berlin introduced the Mietendeckel, a sweeping rent freeze that capped rents across the city and prohibited excessive pricing. This intervention was unprecedented in scale and ambition, and it drew immediate legal challenges.

The Bundesverfassungsgericht annulled the law, but not because it violated property rights. Instead, the Court ruled that Berlin lacked the legislative competence to enact such a measure. Tenancy law, it held, falls under the concurrent legislative power of the federal government, which had already enacted national rent control rules. The judgment thus emphasized federalism over substance, but also affirmed that rent control is permissible provided it does not render property economically useless and is introduced by the appropriate authority.

France’s court defers to the legislature to balance housing interests

France offers a different model, where the Conseil constitutionnel generally adopts a deferential stance in reviewing social and economic legislation, assessing only manifest unconstitutionality rather than substituting its policy judgment for that of the legislature.

In its 2014 decision on the Loi ALUR, which introduced rent caps in urban areas with housing shortages, the Conseil upheld the law’s central provisions. It recognised that facilitating access to housing in the face of severe imbalances between supply and demand constitutes a legitimate public aim. The Conseil reaffirmed that its role is not to second-guess Parliament’s decisions unless they clearly violate constitutional principles.

The only provision it invalidated concerned a narrow rule that limited rent supplements to properties with exceptional features. The Conseil found this restriction unjustified, but overall, the ruling confirmed that rent controls, when carefully tailored, fall within constitutional bounds.

Italy’s court lets property set the boundaries

In Italy, the Corte Costituzionale has long treated rent control as a site of normative tension between property rights and social goals. Drawing on Articles 3, 41, and 42 of the Italian Constitution, the Court has sometimes upheld rent restrictions and at other times declared them unconstitutional.

Italian constitutional jurisprudence views housing as a good with both economic and social dimensions. The Court often stresses that while tenants deserve protection, the burden of stabilising the housing market must not fall unfairly on property owners. Rent controls must therefore be justified by strong public interests and should not negate the fundamental right to use and profit from one’s property.

In a key 1983 decision, the Court stated that housing is a “primary good protected by law” and that regulation serves its proper function when it promotes both public and private investment. At the same time, it held that property remains a subjective right and cannot be transformed into a tool of public policy without constitutional justification.

Property rights as a constitutional brake on rent control

Despite differences in legal tradition, European constitutional courts show a clear pattern when reviewing rent control laws. Judges in Germany, France, and Italy all affirm that states may intervene in rental markets for social purposes, but only within strict legal boundaries that give strong weight to property rights, especially in their economic function.

Across jurisdictions, courts interpret constitutional protection of property to include not just ownership, but also the right to earn income from it: what legal doctrine calls ius fructus. This framing means that rent controls are not evaluated solely on the basis of social aims or legislative intent. What matters is whether they interfere with the owner’s ability to profit. As a result, rent regulation is constitutionally viable only if it is narrow in scope, temporary in duration, and does not seriously reduce the expected return from renting. Sweeping or long-term controls, especially those aimed at ensuring widespread affordability, are far more likely to be blocked or hollowed out.

The strong constitutional protection of property, as reinforced by the courts, acts as a structural brake on ambitious regulatory responses to housing unaffordability. It does not make rent control impossible, but it limits its scope and deters comprehensive approaches that might meaningfully realign rents with incomes.

This dynamic has a ripple effect. Judicial decisions contribute to a broader political climate of caution and scepticism, where legislators – already facing market and lobbying pressures – know they risk constitutional invalidation if they act too boldly. Even as public demand for tenant protections grows, the legal message remains clear: the state can intervene, but not too far, and not for too long.

As our recent research on rent control shows, the Strasbourg Court has contributed to reshaping the distribution of power between tenants and landlords, encouraging the transition of Eastern and Southern European countries toward the common European housing market. In both upholding and striking down rent control measures, judges generally take market value and the comparative reference price as the preferred benchmarks for fair rent levels.

The broader consequence is that access to affordable housing through renting becomes harder to secure. When constitutional courts elevate the right to profit as a core element of property, they make it more difficult for lawmakers to implement rent policies that would ensure fairer costs for tenants. In practice, this constrains the state’s capacity to guarantee affordability across the housing system not only for the most vulnerable, but for the growing share of the population struggling to keep up with rising rents.