'In
Berlin’s housing market people are getting mad, getting scared'
Emily
Manthei
news@thelocal.de
15 March
2018
10:21
CET+01:00
'In
Berlin’s housing market people are getting mad, getting scared'
Germany’s
affordable housing problems are magnified in Berlin, where a swelling
population is leading to eye-watering rent increases. While some tenants are
being pushed out of their homes, others are fighting back.
When Marian
Ryan moved into what she calls “the last scruffy corner” of Berlin district
Prenzlauer Berg in 2010, she and her partner were already paying what most of
the neighbours in their house considered too much: €700 cold for 75 square
metres.
But the
ground-floor location was ideal for Ryan, a writer with physical mobility
issues who works from home. So in 2014, when the landlord offered her and all
of her neighbours a €100-per-square-metre settlement to leave the building
prior to renovation work, most refused. “Everybody thought that was an
atrocious offer,” she said.
Ryan was
experiencing something first hand that has become a central social issue in
Berlin in recent years: an overheated rental market is making it lucrative for
landlords to try and push out long-term tenants in order to charge new tenants
much higher rents.
Two years
after the initial offer, a representative of the real estate company came to
discuss building renovations to the common spaces, like a new elevator and
balconies. He passed out a letter stating that the changes would affect
tenants’ rent, and they should contact the landlord to discuss it.
“It was all
very vague, and it didn’t say anything about us having to leave,” Ryan said.
In late
2016, construction work commenced, with each project leaving a bigger mess,
like uncollected trash accumulating for weeks. Ryan remembers it “like a frog
being boiled in a pot of water, just gradually getting worse.”
Through
2017, construction noise and the chaos took its toll. When a jackhammer started
deconstructing the marble tile in her hallway, the noise became unbearable.
Ryan’s partner was ready to leave, and he contacted the landlord. They were
sent a contract to sign, but it still had the name and settlement amount of a
different tenant in the building, who had moved out two years prior.
“There were
typos and things. All of these alarm bells went off - the contract was so
unprofessional!” A lawyer from the Berliner Mieterverein whom they consulted
agreed the terms were unfair, and their proposed deal included a gag order
against the couple talking about their settlement.
Instead,
they filed an injunction against the elevator construction. After two court
cases, a settlement of nearly €30,000, and continued construction, Ryan and her
partner moved out last autumn.
Germany: a
renter society
Across the
country, Germans are more likely to rent than people in most of the rest of
Western Europe. Historically, the partnership between public-sector subsidies
and private-sector development has contributed to a robust, high quality, and
fairly stable rental market, making renting a more attractive option than
owning for nearly half of Germans.
But this
delicate balance has been breaking down recently.
Low-income
housing in Germany is decreasing while rent prices in Germany’s big cities are
rapidly growing, explains Dr. Jutta Hartmann of the Deutscher Mieterbund,
Germany’s national tenant association.
She cites
less construction of homes, increased immigration, and complicated legal
requirements on energy efficiency as major contributors.
Additionally,
the much-lauded Mietpreisbremse, or “rental price break law,” introduced in
2015 to cap rent increases at 10% above the local average in areas with tight
housing markets, has often proved ineffective.
SEE ALSO:
Germany's controversial rent control law works after all (at least in central
Berlin)
“In
Germany, there are actually only around 1.25 million social housing units,” Dr.
Hartmann explains. “Annually, between 40,000 and 50,000 apartments fall out of
social housing agreements, and there has not been an expansion in the
offerings.”
In 1990, a
federal government report placed the number of social housing units at around
three million.
The
national trend is amplified in Berlin, where the population is growing by
around 40,000 people a year. Since 2009, rents have increased across the
capital city by 46%, while around 50% of households in Berlin are now entitled
to rental assistance.
Many of the
capital’s young, new inhabitants spend weekends hopping between open houses,
vying with 50 or more prospective tenants in rapidly gentrifying
neighbourhoods.
Loopholes
in the Mietpreisbremse allow landlords to breach the 10% ceiling for a variety
of reasons. For example, if the landlord spends more than one-third of the
price of building a new unit on modernizing the flat, the Mietpreisbremse does
not apply. That means that there has been more money spent on modernizing
Berlin’s housing stock, but it has also led to coerced move-outs and outright
evictions.
Public
housing mysteries sorted - sort of
There are
about 1.6 million rental homes in Berlin, around one-fourth of which are either
owned by the city’s six municipal housing companies or are part of social
housing programs.
The
municipal housing companies are for-profit, independent entities whose shares
are held by the city. Encouraged by a city government eager to pay down its
debts, several years ago city officials mandated that these companies raise
rents, generate revenue, and create an income for the city to pay off debts. As
a result, much of Berlin’s public housing is market rate and higher.
In 2015 a
grass-roots initiative collected 50,000 signatures and threatened to force a
referendum on social housing. The Berlin Senate responded by passed an
affordable housing law, making social housing more affordable and less at risk
for privatization. It provides more funds for the modernization of buildings,
makes it more difficult to evict a tenant from social housing, and expands the
role of tenant advisory boards to make the sale of public housing much more
difficult.
It also
stipulates that one in five apartments owned by those city-controlled companies
shall be reserved for refugees and homeless people. The core feature of the
bill caps rent for low-income tenants at 30% of their income, with the
government stepping in to subsidize higher rents in municipal buildings.
However, as
Dr. Hartmann points out, a number of units fall out of social housing
agreements each year. This “fall out” has to do with a public sector subsidy
offered in the 1990s to private developers which encouraged them to build low
income housing in exchange for the promise that the rents would remain
affordable for 20 years. Often renters have been forced out of their homes of
over 15 years when the agreements expire and landlords have snapped rents back
to market rates.
Critics of
the city’s bill also claim it doesn’t go far enough. “It’s not a sustainable
policy at all,” says Michael LaFond, referring to the 20-year subsidies. “We
can’t afford to throw money out there to build homes that we won’t have 10 or
20 years later”, says Le Fond, founder of ID:22 Institute for Creative
Sustainability, a non-profit idea lab for urban co-housing theory and practice.
Another
critique is that this only reforms those 25% of rentals owned by municipal
companies, leaving the other 75% to the private sector, which is gobbling up
central Berlin real estate on the speculative market.
Taking back
control?
On a Monday
morning in late January, more than 100 people gathered in an old brick
warehouse in central Berlin to discuss the development of a new social housing
project. Haus der Statistik is the object of plans by ZUsammenKUNFT Berlin, an
alliance of local artists, architects, and social and cultural associations.
The group
has been working together since 2016 to take control of the austere former DDR
statistics headquarters at Alexanderplatz and turn it into social housing,
artist workspaces, and public education spaces. The project gives some hope for
social housing in a time when many city residents see only anxiety and
gentrification.
The motto
of ZUsammenKUNFT cuts straight to the heart of Berliners working to keep their
city on their terms: “Through solidarity, creating a Berlin that’s sustainable
and cosmopolitan.”
When it
comes to working together though, nothing happens quickly, and nothing happens
without the clear buy-in of all interested parties. Unlike in private housing
like Ryan’s building, where tenants can be enveloped in construction without
their consent, Haus der Statistik will be a slow road to consensus.
In fact,
the planning meeting in January simply initiated an agreement to spend the next
eight months negotiating how space will be divided and used.
But for
advocates of social housing, it is the best way towards building a stable and
sustainable rental market - and one fitting to Berlin’s alternative ethos.
“The story
of Berlin is bottom-up organizing. It’s a question of power, and people in the
city getting mad, getting scared,” says LaFond, “It’s a city of renters and low
income people, and those people are expressing their basic interests and
fears.”
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