Berlin Housing Policies: Reflecting on Social Sustainability Initiatives in Germany’s Capital
We spent our final few days abroad exploring sustainable development topics in the context of Berlin, the capital city of Germany. Visits to firms and institutions across the once-divided region deepened my understanding of sustainable urban governance, particularly the roles of the federal and state legislature in advancing well-being. For instance, at the Rotes Rathaus (Berlin’s Red Town Hall), policy officer André Moschke of the Senate Department for Urban Development & the Environment gave valuable insights into housing policies in Berlin.
The esteemed government official shared with us an analysis of trends in the housing market, discussing the correlation between population growth, stagnating housing prices and rising quota rent prices in Berlin. Over recent years, he explained using economic terms, shifting preferences toward single-dwelling households have caused an increase in demand for housing far exceeding the increase in supply. As a result, the costs of living in the city have skyrocketed.
André outlined various government policies designed to combat the housing crisis; many require cooperation among public and private stakeholders. He talked about the impact of rent controls and common-good-oriented (i.e., subsidized) housing on Berlin’s “dense housing market”. He also explained the city’s plans to build new residential areas, mostly on private land, and its goals to augment municipal housing stock (that which is entirely owned by the city) through acquisition and construction efforts by seven municipal housing companies.
In addition to increasing the quantity of (single-person) living spaces in Berlin, urban planners endeavor to improve affordability for lower-income residents. André described two strategies devised for this purpose: “new construction” and housing cooperatives. The former is a social housing program that distributes the costs of building new residences for low- to middle-class individuals (Wohnberechtigungsschein) based on one of four subsidy models, which differ in their requirements for construction. All four types allow rent and occupancy controls to be maintained by the city for 30 years. With housing cooperatives, which are regulated by German federal law, municipal legislation is more difficult to enforce. Funding for these organizations is allocated toward new construction, too, but with additional guidelines for acquiring housing stock and cooperative shares. This benefits younger, smaller organizations — which typically have less equity capital available to finance housing projects.
Unfortunately, federal regulation of housing production limits the ability of the public sector to meet the demand for new housing in Berlin. So, as an alternative to funding cooperatives, the city has entered into contracts with private property owners willing to bear the costs of infrastructure development, as well as pushed for the “socialization” of large housing companies.
As optimistic as André admitted to being about the future of affordable housing in Germany’s capital, I have reservations about the long-term social sustainability of these social housing policies. For one, given the rapid rate at which Berlin’s population is expanding, I wonder whether the programs adequately address problems of gentrification and unplanned “urban sprawl” in lower-density portions of the housing market. I am interested in learning about how these instruments interact with immigration policies, as well. Finally, I am not sure that new construction is an environmentally sustainable means for development — if Berlin housing policies were modified to affect “green” outcomes (e.g., by incentivizing renewable energy use), promote de-bureaucratization, and encourage integration, could Germany emerge as a leader in social sustainability?
