1# RECORD 531226d59e644f9f5350979931980531a8c04aed2# TITLE: The Price of Regulatory Risk in Housing Markets: Evidence from Berlin3# YEAR: 2026.0 VENUE: CESifo working papers DOI: 10.65864/mha53d3bsk4# AUTHORS: Mathias Dolls; Clemens Fuest; David Gstrein; Carla Krolage; Florian Neumeier5# PAGES: 56 CANDIDATE TABLE PAGES (1-based): []6# ABSTRACT: We study how regulatory risk affects housing markets in the aftermath of rent control. Our setting is Berlin, where a stringent rent cap introduced in 2020 was repealed in 2021, but was followed by continued political debate over expropriation of housing companies and further intervention. Using micro-level listing data and a hedonic difference-in-differences design comparing Berlin to other major German cities, we show that Berlin’s price-rent ratio remained 10–15 percent below its pre-intervention trend three years after repeal. To interpret this persistence, we develop a simple model in which institutional investors face greater exposure to future regulation. The model predicts lower asset prices, reduced institutional ownership, and partial crowding-in of private investors. Consistent with these predictions, we document a sharp rise in housing policy uncertainty after repeal and show that large housing companies reduced their Berlin portfolios, accepted lower sale prices, and sharply cut construction activity. The results imply that credible threats of future intervention can depress housing valuations and reshape market structure even in the absence of binding regulation.789===== PAGE 1 (score 0, numeric-paren 0, table-words 0, var-words 0) =====1011 12 13 14 15The Price of Regulatory Risk 16in Housing Markets: Evidence 17from Berlin 18Mathias Dolls, Clemens Fuest, David Gstrein, Carla Krolage, 19Florian Neumeier 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59Working Papers 6012851612026 62 July 2026 63