57Bloomberg Businessweek February 10, 2020PHOTOGRAPH
BY
JOHANNA-MARIA
FRITZ
FOR
BLOOMBERG
BUSINESSWEEK
so that Berlin can build more apartments,” Lompscher says.
She is counting on a combination of municipal and private
businesses to construct 20,000 apartments each year during
the five-year rent freeze. That may be achievable, considering
that 17,000 homes were built in Berlin in 2018.
“Some companies have threatened to withdraw from
Berlin,” acknowledges Lompscher. “These threats shouldn’t
be taken seriously. As a business you want to be at the heart
of things, and Berlin is still an attractive city, despite the fact
that we’re implanting a different strategy to improve the lives of
those who live here.” At any rate, she adds, Deutsche Wohnen
has never built a single apartment in the German capital.
“Recently I got to see New York through the eyes of my
son, who’s a big music fan, and he was shocked to find out it’s
hard to go out and hear heavy metal because the clubs have
all been priced out,” says Lompscher. “Here in Berlin, you can
go out and hear metal at five clubs every night. And we want
to keep it that way.”S
caring off investors like Deutsche Wohnen, that’s
exactly what we want,” says one activist tenant who
uses the alias Ingrid Hoffmann when speaking with the
press. “We have no use for them; they only want to
make a profit with our rent money.” Despite torrential rain,
Hoffmann, 69, has just arrived by bike at a Berlin restaurant
wearing head-to-toe rain gear. Feisty, with short hair and spar-
kling turquoise eyes, she looks excited to take on Berlin’s cor-
porate landlords.
A former translator, Hoffmann joined Expropriate
Deutsche Wohnen about two years ago after Deutsche
Wohnen increased her rent by 10 percent, which she says
forced her to come out of retirement and get a part-time job
doing typist work for banks. She’s also dissatisfied with the
company’s services. “Every year when it’s cold out, the heat
stops working, and if you complain, nothing happens,” she
says. “Elevators are also a problem. I’m on the 11th story, but
the elevator often doesn’t work. Then I walk up.”
At first, Hoffmann didn’t like the term expropriation. “It
gives people the chills, makes them think of a Communist
sneaking up with a knife between his teeth,” she says. But
she concluded it would stir up necessary publicity and get
people talking.
According to city estimates, the government would have
to pay from €29 billion to €36 billion for about 250,000 apart-
ments. Expropriate Deutsche Wohnen, in a pitch that’s rad-
ical even by Berlin standards, counters that the government
should reimburse the companies only for what they originally
paid, plus a bit more to account for renovations, moderniza-
tions, and inflation. That price would be as little as €8 billion,
and Hoffmann says the city could pay the landlords just 20%
now and the rest over time, as rent money comes in. Asked if
the money wouldn’t be better spent on building more hous-
ing, Hoffmann says, “Yes, they should do that, too—but they
should have started building a long time ago.”
To be clear, Hoffmann’s group proposes the socializationof all properties belonging to landlords who currently own
more than 3,000 apartments. “If a landlord has 7,000, we
won’t take just 4,000,” Hoffmann says. Those with fewer than
3,000 would be safe. After remunicipalization, the proper-
ties would be run as a public nonprofit, similar to Germany’s
public radio and TV.
Whether or not expropriation is realistic, a recent study,
funded by Berlin’s Rosa Luxemburg Foundation, examines dif-
ferences between the city’s public landlord, Gewobag, and its
12 biggest for-profit landlords. It shows that, on average, for-
profit companies put less into upkeep than Gewobag (4% vs.
17%) and more into modernization (18% vs. 12%), a cost that
can be passed along to tenants. They also buy more properties
(60% vs. 44%) and build far fewer new apartments (1% vs. 27%).
“As a result, rents for private companies climb about 5% per
year, much faster than with Gewobag, where they grow with
slightly more than 2%,” writes Christoph Trautvetter, co-author
of the study and one of the journalists who helped Syndikat
research the Pears brothers. In a follow-up study, Trautvetter
suggests that publicly traded companies aren’t necessarily the
worst problem for cities. The larger one is anonymous inves-
tors that use loopholes to extract wealth while paying very
few taxes.
In late October roughly 100 Syndikat patrons and neighbors
showed up for the bar’s eviction hearing. Syndikat’s regulars
weredressedmostlyinblack,withplentyoffacialpiercings.
Therewerealsoa fewelderlyneighbors,aswellascolorful
characters,includingamiddle-aged man with flowing auburn
hair, painted-on fluorescent-orange eyebrows, and a dirty
stuffed animal poking out of his jacket pocket.
Schulte looked nervous. “You know, the Pearses, they have
a philanthropic foundation and, according to their website,
they want to help people and promote community,” he said.
“That’s exactly what Syndikat has always tried to do. When
someone in the neighborhood needs to borrow a drill or a lad-
der, they come to us. When a grandmother from across the
street can’t pay for her medicine, she comes and asks if we
can help, and of course we do.” Syndikat’s bartenders, he said,
pool their tips and communally decide what to spend them on.
But the neighborhood has changed. “It’s absolutely
mind-bending,” said Schulte. “In 10 years it’s gone from one
of the poorest corners of Berlin to a famous global hot spot.”
Already, Firman Properties had converted some of the build-
ing’s other units into furnished short-term housing. “It’s mostly
Americans who come,” Schulte said. “They call in noise com-
plaints starting at 7 p.m.”
To everyone’s disappointment and no one’s surprise, the
Pearses didn’t show up in person for the hearing. Instead,
Firman Properties sent two lawyers. “My clients didn’t want
to have to sit through all this,” one told the judge, gesturing
with her head toward Syndikat’s motley supporters packed
behind her in the courtroom and the halls beyond.
One month later, the verdict was in. Syndikat, the
neighborhood bar, would soon lose its home in Berlin. <BW>
�With Todd White and Benjamin Stupples