No room at the inn
Germany's housing crisis is, like so many others, one of ambition — and of its own making.
Looking for a place to live in Germany? Get in line. Even if you’re rich, you are unlikely to fare much better these days than the lowly commoners lurking among you. Money always helps, but it can’t will a home into existence.
Feeling the political pressure to act on an issue he ran on, Chancellor Olaf Scholz held a housing summit this week, (re-)promising all kinds of doubled-down action to speed up new construction. His campaign talking point of 400,000 new homes every year has so far gone about half-filled.
Even if you could make substantial progress towards that goal, a policy of “build baby, build” only solves part of a much bigger problem — and creates new ones in its wake. Inflation, interest rates, labor shortages, and supply chain snafus, on top of environmental considerations and a very German bureaucratic building approval process, are coalescing to kill the dream of affordable housing.
It didn’t have to be this way. Germany’s housing crisis is getting worse, but it is hardly new. Nor is it limited to Berlin, which receives the lion’s share of attention when it comes to this subject. Understandably so: Whereas cocktail party small talk in most cities might revolve around what you do and how much you earn, in Berlin it’s all about where you live and how much you pay.
That is part of the problem. In rental-heavy Germany, and especially its capital, tenant law is great for existing residents to the detriment of new ones. More or less the only thing that matters is how long you’ve had your contract. A millionaire bachelor might pay €800/month for an exquisite, centrally located prewar palace if he’s been there since the 1990s, while a newly arrived working-class family will squeeze into half the space for twice the price at double the distance.
They are lucky to find anything at all. Even better-earning families struggle, as kids gets older and need more space. Friends of mine are considering leaving Berlin all together because moving within it, to rent or buy, has become almost impossible. When educated, high-earning professionals start moving out of your city, you are in for serious, long-term trouble.
As an existing renter in Berlin myself, I’m not here to rail against rent control. Many aspects of it are great — and the inverse is a nightmare in equity in other ways — but there is no such thing as a free lunch. Housing is incredibly hard to get right. A move to protect or benefit one side of the equation is likely to have a zero-sum effect on another side, not to mention all the loopholes that contractors, owners, and tenants can find to violate the spirit of regulations even as they abide by the letter of them.
In a system where older almost always means cheaper and better, no one wants to move. If they do, they’ll be sure to do everything possible to hold onto an existing contract. Little turnover means stagnation in human, economic, and cultural terms — in other words, the opposite of how a healthy city should function.
That leaves crisis as the only real impetus for change: financial in 2008, refugee in 2015, and war in 2022. Each of these moments saw huge influxes of people from places not doing well (I, indirectly and inadvertently, was one of them), into a place ill-prepared to meet the sudden surge in demand — for no better reason than it didn’t think it would ever have to.
While it’s nice to pat ourselves on the back, feeling proud that wir schaffen das, change by upheaval is not a winning strategy for maintaining social cohesion and democratic stability. When crisis becomes the overriding catalyst for change — and not, say, the push and pull of thoughtful policymaking that influences individual and group behavior — it starts to become clear why a swath of the electorate, which is probably wary of change in the first place, might start to seek out more extreme solutions to get back to its romantic ideal of the pre-crisis “good ol’ days.”
You can’t blame tenants. They are simply responding rationally to the regulatory environment they find themselves in. The result, however, is an insane situation in which Berlin — a wide, spread out, and relatively lightly populated city with room to grow — has a housing crisis and space problem. In this regard, little has changed since a century ago and earlier.
What goes for Berlin, applies to Germany more broadly. This country has plenty of money, space, expertise, purchasing power, and global good will, and yet it can’t house and employ all the people who live and actually want to come here — let alone those who fled here — because the institutional German mind can’t fathom that could possibly be the case. There is little reason to believe the Deutschland AG can build quickly, efficiently, and affordably when it can’t do that for an airport in Berlin, a concert hall in Hamburg, and a train station in Stuttgart.
A rich, global economic power gets up in the morning, looks in the mirror and all it sees is Podunk. Podunk doesn’t grow. Podunk doesn’t change. Podunk doesn’t need to accommodate. And that reflection suits just fine.
The obsolete, but stubbornly persistent refrain, “Wir sind kein Einwanderungsland,” is often framed as a xenophobic one. That it is, but the inability to comprehend that foreigners want to come to Germany says more about the host’s provincial imagination than any ill will it may harbor towards outsiders. If you’re looking for a nation’s inferiority complex in everyday terms, here it is.
Why are you coming here? That is what the U.S., UK, and Canada are for.
This sentiment expresses itself in different ways across the political spectrum. Paradoxically but not unsurprisingly, the prouder and more nationalist you go, the less confidence you hear. Talk to AfD officials, as I have, and the message you get is somewhat confused: Defending the great German nation from death by diversity, but also foreigners would be kinda OK if only the great German nation were equipped to handle them.
Not that I turn to politics, least of all the far-right, for my fill of consistent and logical argumentation. If I were cynical about things, I might suspect policymakers are biding their time until mortality solves the problem for them. Even accounting for high levels of immigration, Germany’s federal statistics bureau projects that net population will barely budge over the next decade.
Other calculations find a net population decrease. By 2070, we might be right where we are now. Germany is old and a lot of Germans by then will be dead. So if you’re looking for a place to live or foresee a need to upgrade, your best bet may be to befriend the elderly neighbor across the way with six rooms she’s had since the Weimar days.
Seeing that Berlin’s population today is almost exactly what it was a century ago, these projections may be onto something. Or, they suggest that even Germany’s stoic statisticians are falling into the inferiority trap. No need to improve because nothing will change so everything will be fine.
Kaffee-Kuchen, anyone?
That feeling you have that Germany’s problems are completely made up and of its own making is not just you. At the same time the country is short 700,000 housing units, according to one study, the government estimates at least 1.7 million homes are out there
sitting empty.
That accounts for more than four percent of Germany’s total housing stock. No surprise, the figure about doubles in former East Germany, which is also less populated and suffers from worse infrastructure than the richer and more industrial west and south. Even some of the housing in the government’s own hands are vacant.
All this talk about housing misses a major point and grade-school understanding of economics: supply and demand. Does anyone want to live where the housing already is? More importantly, can anyone live where the housing already is?
Build all the new homes you want, and subsidize the hell out of them to keep them affordable, but if they don’t come along with schools, parks, restaurants, libraries, theaters, hospitals, offices, and road and rail connections, few people will be willing or able to go live there. Then if you do pave paradise and build all those other things that people want and need nearby, you run smack into climate, environmental, and ecological concerns. Germany may have empty space, but a lot of it needs to stay that way to grow food, build wind and solar parks, and just leave alone to enjoy and maintain some semblance of biodiversity.
Still, there is a chunk of unrealized potential between today’s mediocre policy and all out blitzkrieg on housing. The state of Brandenburg, for example, is replete with idyllic towns and villages that could serve as ideal commuter hubs for jobs in Berlin. There’s just little to do there, and some can be difficult to reach. Such places make for a lovely day trip on the weekend with your bike, but it’s not long until you want to retreat to the big city that isn’t shut by 6 and has more than one bakery selling defrosted schrippe. If you don’t have a car, forget it.
That might be fine for the old and conservative people dying out in such places, but a setup like this is how you get hundreds of people applying for a single apartment in Kreuzberg.
As a musician friend once observed: Berlin is great, until you’ve hit all the bars that everyone else has already done, and there is nowhere left to tour. Or, in my words: Leave a very small area of central Berlin, and it’s Back-Factory till Poznań.
Wie lecker!