Berlin is still extremely cheap. You can get fairly large 1BRs in nice, central areas neat Mitte for 400-500 EUR or even less. Larger apartments are not much more expensive. You can still find a largeish 2BR below 1000 EUR.
The really terrible situation with no viable alternatives seems limited to SF and NY. (Maybe Paris? News about Paris always makes the cheap suburbs seem dangerous and non-French.)
Or is this merely a German joke about a rough town?
(Now I'm wondering if this is like the PRC, where Beijing has the rich history of a capital but bland areas like Shenzhen are where the money is made.)
The jokes about Berlin would be mostly about its horrendously mismanaged prestige project - the new airport.
So much for that...
I didn't say Mitte, though, but close to Mitte. Central areas like Friedrichshain, Kreuzberg, Prenzlauer Berg.