Berlin's left wing coalition government has agreed a plan to introduce a 5-year rent freeze.

The proposed initiative is expected to pass through parliament later this month, but will be backdated to June 2019. It allows for a limited increase from 2022 to account for inflation.

Proponents say it will ease rising living costs in a city where rental prices have more than doubled in a decade, and where most people are renters not buyers.

Critics argue the real problem is an acute housing shortage as tens of thousands of people a year flock to the German capital. They worry the freeze could stymie the large-scale investment needed and exacerbate the supply problem.

Few neighborhoods better exemplify Berlin's recent transformation than Prenzlauer Berg. Nearly 30 years ago, it was in this once-drab working class community to the city's northeast where the gates were first flung open to the west on November 7, 1989, leading to the fall of the Berlin Wall.

In the wake of that historic moment, a period of mass privatization ensued, with developers pouring in to buy up entire blocks on the cheap that had previously been owned by the Communist state.

Today, that is paying dividends for them. Prenzlauer Berg's streets are now lined with hip cafes packed with wealthy German and expat families who have flocked to the city in droves in recent years attracted partly by the relatively low cost of living compared to other European urban centers. The great irony is that has driven up prices rapidly making life here not quite so cheap as it once was. In 2017, Berlin was the fastest growing property market of any major city.

Most Prenzlauer Bergers – indeed most residents of Germany – are still renters rather than buyers. They are feeling the effects.

People like 77-year-old Renate Günther believed something needed to be done. Günther has lived in this part of Berlin her whole life, witnessing firsthand its rapid face-lift. Günther pays €480 ($535) a month for a 2 room apartment on a long-term contract, which even under current laws means her rent rises are restricted. 

Without that lifeline, Günther says it's unlikely she would still be living in the area that is her childhood home. 

"I like that rents will be frozen", she says. "I live alone and cannot afford to pay higher rent than I am paying now".

50 year old Ralph Jentsch is a newer breed of resident. 

Jentsch has been residing in Prenzlauer Berg during the decade in which the whole neighborhood has changed almost beyond recognition. Jentsch, too, rents long-term and therefore has been able to stay despite the significant rent rises. 

"I know that many people – especially property owners in this area – are against this. But for me as a renter, it's a good thing." Jentsch says. 

He thinks the new law may even allow him to claim some rent back. The city government's plan kicks in retrospectively from June 2019.

Addressing rising urban living costs is a priority for policymakers from London to San Francisco and beyond. Berlin has made perhaps the most radical move yet to try and address the problem.

Others will be watching closely to see how it works out.