Another in The Guardian series:


Until a few years ago, investors discovering Berlin ignored Neukölln as too scruffy and working-class. It has the largest number of migrants of any district in the city, and the highest number of social welfare recipients. But in recent years, as Berlin’s housing market has boomed, investors have been seizing everything they can: “I’d say every second building has either been bought or is in the process of being bought,” Sander says.

Recognising that the city’s Social Democrat government had minimal interest in bucking this trend (the mayor said she welcomed a middle-class influx), the Neukölln Tenants’ Alliance set about collecting signatures in support of introducing “milieuschutz” in the area. Under this law – translated as “social environment protection” – real estate is shielded against owners’ attempts to renovate and modernise it to the extent that existing residents could be forced out.

“The milieuschutz should ensure that neighbourhoods in Berlin remain lively and socially mixed, enabling anyone to live wherever he or she wants,” says Hans Panhoff, a city councillor responsible for building, planning and environment in the neighbouring district of Kreuzberg, which has borne the brunt of Berlin’s gentrification drive.

berlin-2Panhoff says the law can work in conjunction with other measures, such as new rent control regulations and the right of authorities to block sales, should they be able to raise the money to buy a building themselves. …

In areas protected by the law, owners are forbidden from changing floor plans, merging two flats into one or splitting large flats up into several, adding balconies or terraces larger than four square metres, installing fitted kitchens or undertaking luxury bathroom renovations – or using the flat as a holiday let.

“We have been seeing a rapid increase in such modifications being carried out,” says Andreas Haltermann of the Tenants’ Alliance, “primarily so landlords can increase the rent – sometimes to an extortionate level – with the intention of pushing existing residents out, so they can either sell the flat or rent it out at a much higher rate.”
Haltermann claims the milieuschutz – which was passed by the Neukölln government in its “most urgent” areas in the new year, and finally came into full force this summer – has already prevented planning permission on several building projects. …

Of course, Germany is very much a renters’ market, with 85% of people renting and sympathy for property owners not typically uppermost. Rent rises are, in theory, capped – the longer someone has lived somewhere, the lower their rent is and the more rights they have.

But if the owner upgrades the property, he is able to offset a considerable chunk of those costs on to the rent. Long-term, sociologists warn, this is likely to water down the healthy social mix in neighbourhoods that city residents often cite as one of the reasons life in Berlin is so pleasant and relaxed. …

Criticism of the milieuschutz has also come from the home owners’ association Haus & Grund (House and Land), which has accused the authorities of “taking away from people the chance to buy, at a time when it has never been so easy to secure provision for old age due to the low borrowing costs”.

Meanwhile the Chamber of Industry and Commerce has described the measures as “a renewed attack on the ownership rights of property owners, which is having a detrimental effect on the investment climate in the city without doing anything to keep rents under control on a mid-term basis”.