Housing in Germany

Keine Profite mit der Miete!

Berlin:

The Berlin housing market is mainly one of tenements. More than 80% are rental apartments. Due to its history of division Berlin is in the excaptional situation of still accomodationg poor people in its inner city districts. But processes of gentrification in districts of the former East such as Prenzlauer ,Berg and Friedrichshain, with high vacancies and rather homogenious ownership strcutures took place extremely rapidly within a few years. But the ‘caravan of gentrification’ did of course not stop before western inner city districts such as Kreuzberg and Neukölln, which are heavily under pressure right know.

The rents in Berlin are sky rocketing, especially in the last few years since the financial crisis. The displacement of big parts of the society, mainly working class, migrants and the poor, to the outskirts of Berlin was induced by municipal politics as well as by developments of the housing market.

Neoliberal Urban Housing Policies

Traditionally Berlin had a rather big stock of public and/or social housing. In its Western parts the Berlin government took up to the global neoliberal politics in the 1970s and 80s by taking housing politics from the political agenda. After its reunification and the resolving exodus of the city’s population this trend was intensified. Both the SPD-CDU coalition and the following red-red coalition cut the subsidies for social housing and other social urban renewals to zero, sold 200.000 units of public housing and deregulated the planning and building laws, paving the way for the construction of luxury apartments in Berlin’s inner city districts. The administrative instrument of so called “Sanierungsgebiete” (areas of modernization) furthermore fostered the displacement in poor neighborhoods. The model of “soziale Mischung” (social mixture) was used to promote the elimination of the working class from attractive districts to make way for private investors under the banner of elevating the under classes to the middle classes.

An example of the massive impact of this politics is the specialized form of subsidized social housing built in the 1970s and 80s. It was not build as public housing, but by private investors who received subsidies for their credits from a public bank. In this system the more expansive the investors constructed the houses the more subsidies they could get. Since the subsiedies for more than 150.000 of this units are running out, tenants are facing severe rent increases. Often the rent in this flats built for people with littel income is now higher than the average rent in Berlin. Another example of the politics impact is the so called ecological modernization of buildings, which is financed with credits from the state and where landlords can add the cost of the modernization to the rent, often causing rent increases of over 90%.

The Housing Market since the Crisis

Before the financial crisis Berlin’s rental market had a rather moderate development. A decrease of the city’s population and the availability of vast plots of vacant land and housing kept the supply higher than the demand. But, as described above, the neoliberal urban politics cleared the way for the massive impact of the financial crisis on Berlin’s housing market.

Since the financial crisis Germany’s real estate markets became the safe havens for global investment capital. Especially Berlin’s real estate market promises to be a safe asset. Because it was a city with relatively low prices per square meter and relatively low rents, which makes it easy to raise the rents and thereby make easy profits, even without investing further money in the structure of the building. Because of this mechanism rents in Berlin, a city with a high percentage of welfare recipients and low wages, increased much faster than in other German cities. The conversions of numerous tenements into condominiums, mainly carried out by international investment groups, increased the rents additionally.

In numerous of the gentrified neighborhoods this abstract process has quite tangible outcomes for the tenants. Doubling rents are in no way unusual after the owner of a building changed, rental apartments are converted into condominiums and luxury modernization makes flats unaffordable.

The financialization of real estate investments further boosts this development. Financialization means that the ‘artificial’ production of capital on financial markets is not bound to real production on e.g. the industrial markets any longer. For the real estate market that means, that housing stakes are split up and sold to various investors in any different kind of derivative instruments. These investors expect a fast backflow of their capital, not suitable to the traditionally long investment circles of housing. Thereby the pressure on Berlin’s real estate market is further increased.

 

New Political Discourse on Housing Policies

Since the growing tenant protests in Berlin, gaining public since a big demonstration in September 2011, and since numbers confirm the growth of Berlin’s population and the massive increase of inner city rents, also the Berlin government put the construction of social housing politics back on the agenda. Even in the current federal election campaigns rents have become a populistic outlet for the parties. But what is discussed now, is a substitution discourse to the actual problems: Most affected by the housing policies and the pressure on the housing market are ‘current tenants’, tenants who already live in an apartment and want to stay put. The city’s representatives at the moment only think about new housing. Discussing the best way of how to construct these new buildings – aka how to make way for new investors – does not help the current tenants. Furthermore the solutions proposed for building new ‘affordable’ housing fulfill in no way the demand for real social and public housing and a decommodified housing market and would only reproduce the existing problems.

 


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