There is no European city that does not struggle with this issue: capital seeking for profit targeting real estate as the only source of possible benefits. And by doing so, pushing prizes up and tenants out of their apartments.
A development seen at first as a thriving force for building innovation, now shows its downside: banish tenants with low incomes to the outskirts of the city. The Berlin senate and the menaced tenants are stepping up their fight: if necessary expropriating private apartments.
A tough fight
In previous articles on this website we reported the harrowing situation at the Berlin real estate market. The campaign of the Berlin senate enters a new phase by implementing what is called ‘Vorkaufsrecht’ (preferred buying). But united tenants demand expropiating the private housing companies.
The ‘Vorkaufsrecht’, a legal form of preferred buying (by the city), is part of the German ‘Baugesetz’ (rules on building). This Vorkaufsrecht allows the city, or city districts, to a forced take-over of a purchase-agreement between private parties. The city nevertheless needs to accept the agreed conditions of the contract. Though the city has the right to change the price to what is considered as in line with the market.
This Vorkaufsrecht is executed in areas that are under protecting rule to keep a balanced mix of population. The goal is not just to prevent displacement of the current tenants, but also preventing moving community facilities from the changed neighborhood to an other. Community facilities such as community centers disappear when richer people move in, and low-income tenants move out. Replacing these facilities on the taxpayers expenses, is another aim of this law.
The city executes the Vorkaufsrecht
Just recently this Vorkaufsrecht was executed and on a large scale. In the district (Bezirk) of Wedding the city seized 125 apartments right before the eyes of a large international investor. The apartment blocks were transferred to a city owned building corporation. In the Bezirk of Neukölln, a poor and socially deprived area of 310.000 inhabitants mostly of Turkish descent, the city had the opportunity to bring 140 apartments under city control.
Not every apartment can be brought under public control under this Vorkaufsrecht. The apartment must be situated in a special assigned area, under the law ‘Milieuschutzgebiet’. The law forbids, in these specific areas, implementation of improvements to apartments in order to prevent making them suitable for higher prizing. If a block of apartments is without elevator, it should stay that way. If an apartment floor is without parquet, it is not allowed to install one. Wooden floors are extreme popular in Berlin, and increase selling prizes of the apartment. If there is one toilet in the apartment, installing a second is not allowed under this law. Again, this law is only effective in very specific areas of the city. It is one of the measures to prevent rents rising even further. (source)
Private property at the Karl-Marx-Allee
It has become a struggle on a daily basis to secure affordable housing in many places in Berlin.
One of those places is at the Karl-Marx-Allee in the Bezirk of Friedrichshain. This chique promenade of over 2 kilometers, gives visitors the impression of walking through Moscow. The apartment blocks in Sovjet-style architecture, in German ‘Zuckerbäckerstill’, were build in the 1950’s. It was supposed to be the first socialistic main street and build to impress the world. The original name was Stalin Allee.
The grotesk architecture had to intimidate the workers and making them happy at the same time. Both failed. On June 17th 1953 precisely here in the ‘socialistic main street’, the workers’ uprising started. It took 600 tanks of the Russian Red Armee to clamp down on the protesters in a bloody way, on workers who were not intimidated nor happy.
„Any misuse of economical power is illegal.“
Law in Berlin, Article 24
This street of socialisme could not stop the market from taking control. Often elderly, who lived at this boulevard since the times of de DDR (German Democratic Republic), were confronted with slick dressed businessmen.
One of the jung investors promises on his website to turn these rental apartments into profitable investments. Of course without the current tenants. In the face of the threats of replacement the resistance of the tenants grew.
The proces of buying rental apartments for the sake of speculation raised public and political attention when ‘Deutsche Wohnen‘ joined the game. This company is considered to be one of the largest private housing companies in Germany exploring over 160.000 rental apartments all over Germany. Profit has higher priority than affordable housing at this company.
The Berlin senate started to interfere. It proposed that the tenants would buy their apartments themselves before Deutsche Wohnen would take their chances. Of course the tenants would have to borrow money in order to collect the necessary funding.
This proposal received a negative response. Although some of the tenants once belonged to the DDR-elite, it did not make them rich. They were not willing to borrow money and expected they had to find a large part of the funding themselves. Buying real estate for people of age is no option. Buying the apartments by the tenants would only be an option if a city controlled housing company was prepared to buy up the apartments at same instance from the tenants.
Now a committee of tenants is demanding expropiating the apartments from Deutsche Wohnen. Many of the 160.000 apartments now owned by Deutsche Wohnen used to be property of the city controlled housing companies. Tenants say: ‘Give us back our apartments‘. The tenants rightly state this proces will bring more poverty to people (by higher rents) and force tenants out of their houses, in some cases after living there for decades.
The syndicate of private housing companies resists heavily: ‘It is populistic propaganda. Expropiating is legally and financially unrealistic.‘
On the other hand, the association of Berlin tenants doesn’t give way: ‘Tenants won’t accept this practice any longer. If politics doesn’t act, it will come to unrest.‘
Will the boulevard of Karl Marx become the battleground between workers and capital?