REFIRE
Charles Kingston - REFIRE
One thing looks sure. The rise of the Greens, and the accompanying pressure on their political opponents to match their voter-friendly social outlook, will require more and more political lobbying from the array of real estate interests to ensure a fair hearing and the overdue reform of the constipated planning and regulatory structures that are in danger of strangling future growth. Not an easy path ahead.
Chaos in Berlin, with numerous political parties vying for power, each following its own agenda with nothing but contempt for the others. Thousands of people flooding into the city, driven to explore the arts, humanities, and freedom while forced to live in crowded tenement dwellings, as the city is gripped by radical change. A nightclub and party scene attracting hedonists of all nationalities and persuasions, where everything is available for those with the time, money, inclination and connections to indulge their most outrageous fantasies.
Yes, Germany’s biggest-ever TV production, Babylon Berlin, launched this weekend on free TV, depicting the German capital in 1929 through a collection of individual storylines, while rampant speculation, inflation, and corruption wrench the city apart.
Hopefully – and probably, we expect – the series’ backers, Germany’s ARD and pay-TV channel Sky, will more than recuperate the huge costs involved through international syndication. Casts of thousands were required during filming, which saw Berlin landmarks such as Alexandraplatz and the Museumsinsel completely re-created for historical authenticity. Costing $40 million, it is the most expensive non-English language drama series ever filmed.
It is Germany’s first real attempt to play in the big leagues of high-quality TV series production – and plays to its strengths in focusing on its own dramatic history, while at the same time portraying to a global audience the Sodom and Gomorrah that Berlin represented for many during the Weimar Republic. And which gave rise to the forces of order and discipline which followed in the decade thereafter.
Ninety years and a transformed Germany later, the government of the day in Berlin is feeling pressured enough to address one aspect of the lunacy and squalor that afflicted so many Berliners in the so-called Golden Twenties – the chronic shortage of affordable housing.
The accident-prone coalition government of CDU/CSU and the SPD agreed to a so-called Wohngipfel, or housing summit, which took place in Merkel’s own chancellery headquarters earlier this month. The parties brushed aside their differences for a full day to address themselves to the problems of affordable German residential housing – an issue on which many politicians now know their very existences depend.
More than 100 various lobbying and interest groups showed up to draw attention to their causes, while 50 political groups and trade associations from all 16 Länder, including Merkel and three of her senior cabinet ministers, haggled at the negotiating tables inside.
The last time a similar group met was in 2013, since when rents have risen enormously – with the strongest rises – of 52% - in Berlin. Seemingly reliable estimates by social and tenant organisations such as the DGB and DMB say the number of affordable housing units have fallen from 4 million in 1990 to 1.25 million today, while rents and house prices have soared (which they certainly have in the last ten years).
High on the discussion list was how to accelerate the building permit issuing process for faster building and an easing of rents. Lobbying group ZIA is calling on the government to simplify construction laws, grant certain ‘type’ approvals at the federal level, and increase tax relief for new building.
The message seems to be partly getting through. The government has backed a new tax incentive which should indeed encourage investors to give priority to building new apartments. They can now, after August 31st, reduce their tax bills by writing off about a third of their construction cost over four years, as long as the new apartments are let for 10 years and have construction costs of below 3,000 per sqm, to avoid supporting the construction of yet more luxury homes.
The Baukindergeld is another measure designed to help families, due to come into effect this autumn. Parents with a taxable income of less than €75,000 annually, plus an allowance of €15,000 for each child, will qualify for government payments on the purchase of their first home. They will receive €1,200 a year for each child for 10 years.
Several other key initiatives were thrashed out at the Wohngipfel, some which can expect to see the light of day. As we report in this issue, the SDP want to put a stop to any rent rises above the rate of inflation for the next five years. The government will instruct its own property manager, the BIMA, to initiate its own house building programme. The age-old issue of Share Deals is being revisited with a vengeance, to hinder what is viewed as an unfair advantage by corporations in avoiding the 6% or more Grunderwerbsteuer, a form of stamp duty. A new law, to shift the burden of broker commission away from buyers and onto sellers, is being considered.
A variety of other proposals to alleviate the housing shortage were tabled and filed away for further discussion. Although committment to actual named sums of investment seemed to have been in short supply, at the end of a long day the politicians claimed a number of radical breakthroughs.
And yet…we’ve seen a lot of this before. The government accepts that 1.5m new housing units are required across Germany – and in Berlin, despite a construction boom, the gap remains as wide as ever.
A small chunk of the 300-hectare Tempelhofer Feld, a piece of empty communal land with more space than the principality of Monaco with its 40,000 citizens, was mooted as building land for nearly 5,000 homes (including much affordable housing), shops, offices and a large public library. Berliners were granted a referendum on Tempelhofer Feld four years ago – and two-thirds voted to keep the land as it was, with no new building permitted. They voted to keep it all as a playground, a place to fly their kites at the weekend. All of it.
As the newspaper Die Welt wrote at the time, “In the Prussian capital, hippie culture is state policy.” If this is true – and in the Roaring Twenties it wasn’t the city’s sober housing policy that attracted the daring and creative – then there’s no need to expect Berlin’s housing dilemma to get resolved any time soon.
