FranciscoorLondon.Beginninginearly2020,Berlin’sleft-
leaninggovernmentwillfreezerentsforfiveyears.Landlords
willberequiredtoshownewtenantsthemostrecentrental
contractstoprovetheyaren’tjackingupprices.They’llalso
havetofollownewrent-caprules,whichformanyland-
lordscouldmeanloweringrentsbyasmuchas40%.Those
whodon’tcomplywillbehitwithfinesashighas€500,000
($553,000)foreachviolation.
Evenmoreradically,tenantgroupsandthousandsofactiv-
istsaredemandingthatlargecorporatelandlordsbeexpelled
fromthecityaltogether,theirpropertyexpropriated.The
goalistogetthegovernmenttobuybackroughly250,000
properties—almostone-eighthofBerlin’shousingstock—and
turnthemintopublichousing.Andwhilethemovemaysound
far-fetched,it’swonsupport
fromanywherefrom29%to
54%ofBerliners,according
tovariouspolls.Twoofthe
city’sthreerulingpolitical
partieshaveevenendorsed
a nonbinding publicrefer-
endumonwhethertoforce
big landlords to sell their
real estate to the govern-
ment.(Thebiggestparty,the
SocialDemocraticParty,or
SPD,isagainstthemove,as
is GermanChancellorAngela
Merkel’sChristianDemocratic
Union.They’vesignaledtheir
intentions tochallengethe
newregulationsincourt.)
Berlin’s landlords, big
andsmall,arereeling.The
city’s publiclytradedreal
estate companies, whose
sharepricesfellformostof
thesummerafterthegovern-
mentannouncedtheplannedfreezeinJune,complainthat
Berlin’snewregulationswillscareoffneededcapital.Fewer
companieswillinvestinmodernizationstomakebuildings
moreappealingorenergy-efficient, they say, and construc-
tion of new units may suffer, which would exacerbate Berlin’s
shortages. “Almost 30 years after the fall of the Berlin Wall, it
seems that some people want the former conditions back,”
Michael Zahn, chief executive officer of Berlin’s largest pub-
licly traded landlord, Deutsche Wohnen SE, said in an earn-
ings call in November, referring to the former East Germany’s
all-controlling government. “Tenants and landlords will face
great uncertainty. That’s a poison pill for investment.”U
ntil about 15 years ago, Berlin was unimaginably cheap.
Although vibrant and beloved by artists and students
for its do-it-yourself culture, throbbing techno scene,
and world-class cultural institutions, the city had littleindustry, few jobs, and a glut of derelict apartments. That all
began to change as Berlin became the premier startup hub in
continental Europe. Then big companies moved in, including
Amazon, Daimler, Sanofi, and Sony, as did foreign investors.
Today, Berlin is still affordable by international standards.
A decent apartment in a good part of town costs about half
as much as a comparable place in New York and far less for
those lucky enough to possess an old lease. More than 80% of
Berliners rent, in part because renting was, until recently, so
cheap. Tenant regulations also distinctly favor renters, while
federal tax laws offer no incentives to homeowners. Because
commercial rents are also relatively inexpensive, the city has
preserved a thriving landscape of independent bookstores,
one-off coffee shops, storefront artist and design studios, and
thousands of other small businesses.
In this city of tenants,
a certain number of them
socialists and ex-commu-
nists, animosity toward
landlords finds frequent
expression. In April 40,000
people filled the streets
to protest what they call
Mietenwahnsinn, or “rent
insanity.” (It’s a play on the
German term for mad cow
disease, Rinderwahnsinn.) A
few months later, the win-
dows of one branch of high-
end real estate broker Engel
& Völkers AG were smashed.
Graffiti a few blocks away
read, “CAPITALISM IS
THEFT” and “Gentrifick
dich,” which basically
means, “F--- yourselves, gen-
trifiers.” Two vans belong-
ing to Germany’s biggest real
estate company, Vonovia SE, were also bashed in, spray-
painted, and set ablaze. “We took care to insure that no
other cars caught fire,” wrote the anonymous perpetrators
onananarchistwebsite.
Protestculture,squattermovements,andprogressive
tenant-rights groups are perhaps more entrenched in Berlin
than elsewhere, but the city’s plight isn’t unique. In much of
the U.S., home prices are rising at twice the rate of wages, and
almost half of renters spend more than 30% of their income
on rent, compared with 24% of renters in 1960. A renter work-
ing 40 hours a week and earning minimum wage can’t afford
a two-bedroom apartment in any county across the U.S.,
accordingtotheNationalLowIncomeHousingCoalition.
Partlyasa result,homelessnessis soaring.InOakland,the
homelesspopulationclimbed47%inthepasttwoyears.In
NewYorkCitythenumberofhomelessschoolchildren grew
70%, to 114,000, in the past decade.54
Bloomberg Businessweek February 10, 2020THE ANARCHIST BAR WHOSE EVICTION NOTICE INSPIRED
A MOVEMENT TO UNMASK ABSENTEE LANDLORDS