(Bloomberg) -- Berlin’s government reached an agreement to freeze rent increases in the German capital for five years, dealing a blow to landlords such as Deutsche Wohnen SE and Vonovia SE whose shares slumped when the measure was first proposed in early June.

The measure was approved at a Friday meeting of the parties that form the city’s governing coalition -- the Left party, the Social Democrats and the Greens. That paves the way for adoption by Berlin’s legislature as early as next week, a vote viewed as a formality because the coalition the numbers to push the bill through.

Berlin’s not alone in contending with skyrocketing rental prices and a shortage of affordable housing. Spain’s Socialist government pushed through a cap on rent increases earlier this year, and New Yorkers won historic rental protections from the Democrat-controlled state legislature.

The initiative put forward by the Left party’s Katrin Lompscher, head of urban development and housing in the city Senate, aims to ease the burden on tenants after a property boom caused rents in the city to double over the past decade. Investors have been spooked by the political outcry and a separate campaign to force Berlin’s largest residential landlords to hand over properties in return for compensation.

To contact the reporter on this story: Andrew Blackman in Berlin at ablackman@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Patrick Henry, Rob Urban

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