How to get out of the rent crisis ?: “New building alone won’t fix it”

How to get out of the rent crisis?
“New building alone will not fix it”

By Marc Dimpfel

Rents in major German cities are rising. The consequences are already clearly noticeable in Berlin. Politicians want to counteract the increasing displacement with building offensives. That doesn’t go far enough for the Berlin tenants’ association.

The Schöneberger Akazienkiez can be described in realtor jargon as a “coveted residential area”. In a central Berlin location, only a few kilometers from the Brandenburg Gate, small boutiques line up with chic cafés and well-frequented restaurants. A redeveloped old building district, on the streets you meet many families with children. The rustic ambience of the Schöneberger Bierstube seems to have fallen out of time. In the corner pub, the audience is long-established, the beer costs three euros, and Hertha plays on the screen.

A group of elderly men is sitting at the bar. One of them is Dieter, he has lived in the neighborhood for 65 years. He himself is lucky with his landlord, “but many I know had to move away,” he says. The rents in the neighborhood have simply become too expensive. Much has been built in recent years. “But who can afford to live in it?”

The question is legitimate. Because rents in Berlin have been rising for years. While asking rents averaged nine euros per square meter in 2016, it was an average of 12.80 euros in the first half of 2021, as can be seen from an evaluation of the real estate portal “immowelt”. In the popular, centrally located districts, the offers are sometimes even more expensive. Prices that are no longer affordable for many people in Berlin. So is a city threatened by the rich?

Such a tendency can at least be seen in the inner city areas, says Wibke Werner, deputy managing director of the Berlin tenants’ association in an interview with The association advises its approximately 180,000 members on questions relating to tenancy law and at the same time acts as a representative of tenants’ interests in housing policy.

Only tourists and the wealthy?

“It is becoming apparent that, particularly in the inner city districts, where rents are rising particularly quickly, a population that has hitherto been somewhat mixed is dividing up,” says Werner. The consequences of such a displacement can already be observed in other European metropolises, in which “the inner city districts are only reserved for tourists, the wealthy and businesses”.

Werner attributes the development in Berlin to three reasons. On the one hand, many people from outside moved to the German capital for years. The great demand, primarily for affordable living space, could no longer be met – so prices rose. In addition, there would be financial investors who invest their money in “concrete gold” with the interest of making as much profit as possible. The tenants’ concerns are only of secondary importance. In view of this, Werner criticizes a lack of political will: The regulation of rents is insufficient and offers too many loopholes.

Weak record

It’s not that politics didn’t recognize the problem. However were the efforts of the Berlin Senate to curb the rise in rents have not been crowned with success until the end. First of all, the Federal Constitutional Court tipped the Berlin rent cap in April. The measure decided by the red-red-green coalition envisaged freezing existing rents to the level of June 2019. There should be no increases again until 2022, and then only strictly regulated. But Karlsruhe cashed in the law: The competence would lie with the federal government.

Then two weeks ago the next blow. The Federal Administrative Court ruled that parts of the pre-emptive right practice customary in Berlin are illegal. Until then, the state of Berlin had a right of first refusal in the capital’s 70 milieu protection areas. If it was suspected that the social mix is ​​threatened by the sale of a property, this option could be used in favor of state-owned housing associations. However, the right of first refusal is not off the table. Berlin is currently pushing ahead with a change in federal law.

The scope for effective instruments to intervene in the housing market is therefore primarily at the federal level. In their coalition agreement, the traffic light announces that they want to tighten the rent brake. In addition, the focus is on a construction target of 400,000 new apartments annually. It looks similar in the exploratory paper of the likely red-green-red Berlin government. It says superficially: Build, build, build.

Counterweight to private investors

That is not enough, criticizes Werner: “New buildings alone will not fix it. In the last four years, more has been built than ever before, and yet rents have risen.” On the one hand, there is a need for stricter regulation of rental prices. But it is even more important to legally secure the right of first refusal and then exercise it more strongly: “In the medium term, and this is also our demand for Berlin, 50 percent of the housing stock should fall into the common good in order to counterbalance private investors”.

In Berlin there is another instrument in the room for this demand for orientation towards the common good. The “Deutsche Wohnen & Co Expropriate” initiative advocates the socialization of large private housing companies. A majority of Berliners voted for it. The SPD, the Greens and the Left recently announced that they would be looking into implementation.

The citizens’ initiative is anything but undisputed. Criticism comes not only from the Berlin opposition, but also from SPD election winner Giffey. “I still believe that expropriations will not help create a single apartment or even solve the big issue of affordable housing,” she said.

The Berlin tenants’ association, on the other hand, supports the initiative. “All other instruments have so far borne little fruit. Then you just have to go this sharp path,” says Werner. The resistance in Berlin politics is clearly audible. Your demand: “You now have to take the will of the people seriously and look very specifically at how that can be achieved.”

The group of men in the pub also believes that the rental situation in the capital will not improve without more political effort. “Politicians have to do something,” demands an older man. “I can choose,” says Dieter. “But whether Müller or Giffey rule now, I see little difference.”

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