Both East and West Berlin had a housing shortage until long after World War II. Rain falls on this four-person family through the roof of their kitchen in 1954.
Photo: dpa picture alliance/ullstein bild

BerlinWhen you’re researching the housing market in Berlin, you might come across a real estate agent announcing a new record: The most expensive owner-occupied flat in the city is for sale. For 25 million euros, you can get 1,000 square metres in the top three storeys of a building with a beautiful view of Tiergarten. That’s three times more expensive than the previous record holder. 

Whether you’re purchasing a house or renting an apartment, prices keep shooting up. According to a well-known real estate broker, owning a detached house today costs an average of 4.634 million euros in Berlin. Seven years ago, it would have been a mere 2.526 million euros. Another company recently advertised a 40-square-metre one-room rental flat in a renovated East German prefab block in Mitte for 930 euros per month, including heating costs. Also on offer: 51 square metres on the ground floor in Neukölln for 1,046 euros.

“Poor, but sexy”. Ex-mayor Klaus Wowereit’s famous catchphrase hasn’t rung true for a long time. Berlin may still be halfway sexy, but cheap it is not.

According to industry data, the prices for owner-occupied flats have increased by 64 per cent within five years. The prices for newly rented flats have risen from 3.30 euros per square metre in 1991 to about 12 euros last year.

Berlin is booming once again and there are plenty of parallels to 100 years ago. After the founding of Greater Berlin in 1920, politicians found it necessary to intervene in the completely unregulated housing market at the time

This is the case once again today. The period following the fall of the Berlin Wall when Berlin was one of the most affordable big cities in the world is long gone. Today, freely available, affordable living space is a scarce commodity. This is why the “red-red-green” (SPD, Linke and Green) governing coalition in Berlin’s Senat are no longer leaving the issue to the market alone and have instituted a rent cap.

“We can see that the soaring prices for new rental contracts are being slowed by the rent cap,” say Reiner Wild, head of the Berlin Tenant’s Association. “Recent developments are encouraging.” While landlords try to get around the rent control rules with “shadow rents”, the rent cap is leading to a correction on the housing market. At least, that’s what the tenant representatives hope

Magazine cover: Berliner Verlag, photo: Horst von Harbou/Deutsche Kinemathek
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For low-income people, a boom can spell hardship. The current situation is reminiscent of another big boom period in Berlin. Following the founding of the German Reich in 1871, the small capital city on the Spree experienced an astonishing economic upswing, industrialisation at a massive scale and an incomparable influx of workers and day labourers. In 1875, Berlin counted 960,000 inhabitants; by the turn of the century, there were 1.9 million.

As housing construction was left entirely to the private sector in the German Empire, Berlin became the “biggest tenement city the world.” This was also the title of a book published in 1930. The miserable housing conditions of the poorer classes was one of the biggest social problems at the time.

The tenement courtyards were cramped and often only the legally mandated minimum size of 5.34 by 5.34 metres, just big enough for a fire hose to be turned around. The properties were usually narrow, with many wings, sometimes going back seven courtyards. Work and living took place in close proximity to one another. The housing blocks were riddled with small stores and workshops.

The Meyers Hof tenement building on Ackerstraße in Wedding is an extreme example: six rear courtyards and 257 flats with 2,000 inhabitants. Most of the flats consisted of one room, a kitchen and a small chamber. Outdoor toilet facilities were only located in every second courtyard.

“It smells like a tomb, musty, damp and cold,” wrote Bruno Schwan, the director of the German Association for Housing Reform, following a visit to a tenement. “The walls are damp, the floorboards rotten. Rats are bold, even during the day.”

In order to be able to pay frequently exorbitant rents, one third of Berliners were forced to sublet. These subtenants were often “bed lodgers”, shift workers who shared a bed one after the other in the flats of strangers.

The mortality rate in the tenements was twice as high as in middle-class areas. There was a great deal of public pressure to do something about the dismal conditions. Politicians intervened for two reasons at the time: first, a lot of men had died in the First World War and laws to protect tenants were passed for the first time to protect widows and children from eviction. Second, the frenzied growth of the Wilhelmine period ended with the war and the construction of housing came to a standstill. Space became scarcer and scarcer as huge numbers of people displaced by the war crowded into the city.

The founding of Greater Berlin in 1920 marked the birth of social housing in the city. “It was Greater Berlin that first opened up the room for manoeuvre required for new forms of housing,” says the city planner Harald Bodenschatz. He spent many years as a professor at Berlin’s Technical University and has now published the book 100 Years of Greater Berlin which focuses on housing and urban development. The way the enlargement of the capital led to improved housing was a once-in-a-century event. The era before “was a time of unbridled growth, full of hardship, zero tenant protection, with elegant neighbourhoods full of villas in the southwest and hopelessly overcrowded flats in working-class districts in the north and southeast of Berlin.”

Today, 115 inhabitants per hectare live in central Berlin, making Berlin more densely inhabited than central areas of London. In 1910, Berlin’s population density was far higher: 312 people per hectare. Within the tenement belt surrounding the old city centre, that number was thought to be 1,000 inhabitants per hectare. The pressure on the housing market was enormous: after the First World War, the city required 200,000 additional flats.

Beginning in 1920, large cooperative associations were founded and financially supported by the city enabling them to build housing estates with ample space, light, air and green areas – in contrast to conditions in the tenements.

Before the founding of Greater Berlin, politicians were faced with the problem that the thriving region was a sprawling patchwork of small cities and villages. Before the merger into a single city, every municipality had its own construction regulations and could lure rich people with low tax rates. Following the merger, uniform planning guidelines applied for the entire city.

And, finally, there was more space. Beyond the gates of the old “little Berlin”, large airy housing estates were laid out. The prerequisite for doing do was the new construction code of 1925. Another prerequisite was that Greater Berlin pursued a progressive land reservation policy. A new tax was introduced. The currency reform of 1924 freed building owners from their pre-war mortgages; in return, they had to pay a tax on inhabited housing. This tax revenue was primarily invested in new housing.

The "Horseshoe Estate" was built in 1925 in Britz according to plans by Bruno Taut has been named a UNESCO World Heritage Site.
Photo: imago images/Günter Schneider

This is how famous large housing estates such as Siemensstadt, Weiße Stadt and Hufeisensiedlung ended up being built. When visiting Hufeisensiedlung, the impressive horseshoe shape in which the residential blocks are grouped in the middle is not the only thing that stands out. The estate set new architectural trends: an elegant overall concept, plain and functional buildings, smartly situated in a green area where many tenants have their own front yard. Ponds, meadows and generous amounts of greenery accessible to everyone. The housing estate is bright, airy and close to nature. It is the opposite of an urban behemoth.

During the Nazi era, some large-scale projects of the Weimar era were continued. However, the Nazi ideology favoured small estates. During the war, hardly any housing was built at all. The production of armaments took priority. The Nazi era could be summed up as such: by the end of the Second World War, 500,000 flats had been destroyed in Berlin.

Plenty of helpers at the FDJ (Freie Deutsche Jugend) youth group’s 1957 reconstruction event on Stalinallee, today Karl-Marx-Allee.
Photo: dpa picture alliance/ZB

Across both East and West Berlin, it took decades until the last of the rubble had been cleared. Later, most of the new building took the form of large housing projects. Enormous prefabricated blocks with a total of 300,000 flats were built in East Berlin, in areas like Marzahn, Hellersdorf and Hohenschönhausen.

Massive housing developments sprung up in Marzahn on the eastern edges of the city in the 1970s and 1980s.
Photo: dpa picture alliance/ZB/Peter Zimmermann

The West opted for wholesale redevelopment. In Wedding, on Bernauer Straße, for example, all the old buildings were demolished, and 28 new blocks were built. In the 1960s, this street was the largest urban renewal area in Western Europe. Housing estates such as Gropiusstadt in Neukölln and Märkisches Viertel in Reinickendorf sprouted out of the ground.

After the Fall of the Berlin Wall, very little social housing was built. In the early years after reunification, eastern prefab buildings were even torn down because no one believed an upswing was in sight. Following Brexit, Berlin has become the most populous city in the EU. The Germans call it a Schwarmstadt, or swarm city, a metropolis that’s enormously attractive to young people. The fact that tens of thousands of refugees have needed to be housed here since 2015 has placed even more pressure on the housing market.

How should the problem be solved? One solution being suggested is for the state of Berlin and the federal government to provide cheap land to “socially responsible housing companies” to build on. Other proposals being floated include simplification of construction regulations and accelerated approval processes. Some are also calling for tax cuts.

Others want higher taxes. Just as the landlords of the 1920s financed new social housing through a tax on inhabited flats, leftwing politicians are calling for a “tax on real estate profits.” This is intended to make speculation less attractive for investors and generate funds for the construction of affordable housing.

There is one thing, however, that the politicians can always agree on: the clock is ticking. Ironically, 100 years after the founding of Greater Berlin, the city has become too small once again.

This time the discussion is not about shifting borders again, but about productive cooperation with the surrounding state of Brandenburg. Once again, Berlin is approaching four million inhabitants. Nearly half as many people live in the suburbs as in the capital. Once again, part of the solution to the problem is being sought in the 57 surrounding communities: a prosperous, expanding “settlement star” has been developing along the highways and rail lines that lead out of Berlin.

Experts see ample space for large new housing estates there. Their models are the garden cities that were built after the founding of Greater Berlin, such as the six modernist estates, including Hufeisensiedlung, that have since been deemed World Heritage Sites. Sometimes, you have to look back in order to look ahead.