Berlin is no longer the ‘poor but sexy’ capital of Germany, as now the city is home to the world’s fastest-rising rents. Property prices in Berlin sharply increased by 20.5% last year, according to a study from property consultancy Knight Frank, while other German cities are also experiencing stiff increases. In a country with the some of lowest home-ownership rates in the developed world, rapidly rising rents are being met with soaring tension.
Protests erupt from the capital
Simmering tensions in Berlin reached a boiling point earlier this year, with tens of thousands of people taking to the streets to protest rising rent prices and rampant gentrification. Tongue-in-cheek protest signs proclaimed ‘this isn’t a demonstration; we’re all just going to an apartment viewing’, while frustrated Berliners took to the streets, overwhelmingly calling for rental reforms. These ongoing demonstrations from, and including most notably, an occupation of several apartment buildings from protesters, signals the mounting discontentment felt by locals and newcomers, who have been struggling with Berlin’s increasingly difficult and expensive property market for years. Other large German cities aren’t fairing much better, with Hamburg, Munich and Frankfurt also ranking in the top 10 in the world for price rises. In a country of renters, the calls for tougher rent control and more low-income housing are loud and clear, as they continue to make headlines and shape political debate.
A lack of affordable housing
Germany has an acute lack of affordable housing and a shortfall of two million low-income apartments have become a serious issue in many cities for a number of years. A study released last year by the independent academic institute, the Hans Böckler Foundation, found that four out of 10 households in Germany face rents that take up over 30% of their salaries. The study – which delved into the income situation of cities, as well as the housing shortage – showed both where housing is lacking and who are suffering the most. Finding that Germany’s 77 largest cities have a shortage of 1.9 million affordable apartments, the study unsurprisingly found that low-income singles and families are the greatest affected. With middle-income households able to afford 76% of all apartments, low earners can afford 61% of the apartments, meanwhile, people living below the poverty level are competing for 25% of apartments. In this climate, rising rent prices present a serious social and disparity problem for Germany.
Back in Berlin, where a lack of housing is coupled with an increase in investment fuelled by a rising population and industry, the mood is sour. Investment, in general, is not an issue. However, the many investors, most of them foreign, buying entire apartment complexes at comparatively low prices and turning them into luxury housing are rubbing up the city the wrong way.
All eyes on Berlin
The German government had taken steps to try and curb sky-high rents, implementing the Mietpreisbremse law, of German rent-brake law in 2015, which aimed to cap rent hikes. Similarly, Berlin neighbourhoods under Milieuschutz are theoretically protected from gentrification, as luxury conversions of low-rent flats are forbidden. However, the results of these laws are mixed, as they rely heavily on tenants knowing their rights and reporting abuses of said rights. Further still, there are little repercussions for landlords who ignore them. Some NGOs and communities are banding together to buy out whole apartment blocks to help ease the issue, but these stories are few and far between.
As Germany, like many other European countries, struggles with record-breaking rent prices, many eyes will be on the current government. In the meantime, as Berlin is plagued by the all-too-familiar stories of displacement that come with gentrification, the city’s days as a bohemian capital may be numbered.
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