Gentrification in Berlin, Essay Example

Introduction

Regardless of what season it is, young and successful Germans crowd the streets of Berlin in the terraces and bars. Such an image suggests that the neighborhoods in Berlin are far removed from the global economic crisis that continues to wrack cities. Prior to the economic meltdown, these neighborhoods in Berlin occupied a much bleaker position. Currently, the presence of gentrification processes and the concomitant and deepening of the global economic catastrophe seemingly proffers an interesting contradiction. Some scholars view gentrification as an economic phenomenon as altogether dead.[1] Indeed, there have been prior economic crises that have prompted scholars to probe the enduring pertinence of gentrification as a phenomenon that structures urban shifts.  Berlin continues to have rising rent rates in comparison to other cities in Europe in addition to swiftly evolving consumption infrastructure.  Although there are policies and regulations in place, including a rent cap law that was implemented in June 2015 in addition to an injunction against luxury restorations in certain quarters, gentrification continues to adversely impact the local population. More specifically, low-income immigrants shoulder the burden of the process of gentrification. Germany has a storied history of welfare traditions, which is why it is difficult to detect adverse ramifications of gentrification. Indeed, the swift displacement of low-income families has been avoided since the government passes and implements very strict rent control, and Berlin became the first urban locale in Germany to enforce a rent cap law that hinders landlords from charging more than 10% over the mean rent rates for new renters. Unfortunately, the law is unclear in its wording, which is why landlords have found loopholes in order to hike up fees for new tenants.

Landlords in historically immigrant-laden and working-class boroughs are hankering to drive out low-income tents so that they can rent the apartments out to middle-class families in addition to students who are willing to pay more to share a flat. Immigrants remain at a disadvantage when striving to defend themselves because of linguistic barriers to effective communication in addition to an overall lack of knowledge about the legal system in Germany. Housing administrations and landlords frequently and purposely do not carry out all of the their duties so that immigrants who have lived there for a long period of time voluntarily leave the flats. An example of this practice is failing to renovate the apartments so that they were water leaks that cause a variety of problems and subsequently blaming the tenants for not taking care of the problem. Failing to be cognizant of the legal privileges tenants have results in their intimidation when they sign contracts without fully comprehending them. After the contracts are signed, it is often far too late to break the contract. It is clear that within Berlin, there is a fractured urban culture as a result of local practices due to gentrification and the persistence of hipster culture in which drug consumption is rampant. An examination of gentrification processes in Berlin from a political, economic, and cultural point of view provides a nuanced understanding how they gradually impact local traditions and the role they play in reacting to various economic crises.

Gentrification remains a central issue in political discourses and debates, especially within the context of the ongoing urban development that has taken place in the city. Gentrification has also been a hot topic of discussion for lay people, although the diagnosis of gentrification varies on an idiosyncratic basis according to urban context. Discussions about inner-city neighborhoods are all framed through the prism of gentrification. Urban renewal and upgrading has emerged as a universal phenomenon, although it must be pointed out that there are variations among historical trajectories pertaining to gentrification in various neighborhoods, and Berlin represents a paradigmatic archetype for the multitudinous variations that urban renewal and upgrading can take.[2] As such, Berlin provides a fruitful sight for analyzing and assessing the various phases and forms of gentrification within contemporary contexts including:  luxury housing projects that have been dubbed as “super gentrification”; displacement that takes place due to the blaring gap between new contract rents and long-term rental contracts, which is referred to as rental gentrification; and the metamorphosis of renting houses into vacation flats and boarding houses, which is gentrification geared towards tourism.[3] It is unequivocal that gentrification has become embedded into various contexts within Berlin that are locale-specific. As such, the assortments of gentrification processes that can be ascertained in Berlin suggest that examining political regulations and the real estate markets in Berlin should be at the center of analysis of gentrification in the popular German city. Gentrification in Berlin suggests that gentrification is not a homogenous process but rather one that is multi-faceted and demarked by heterogeneity.

Housing Market in Berlin: Etiology of Gentrification

The housing market in Berlin is quite unique in comparison to the markets in the urban centers of the English-speaking world because it is predominately rental housing. Indeed, a meager 14% of the housing stock in Berlin is deployed by homeowners, while the rest constitutes of rentals. The majority of the rental sector is managed by private property companies and owners, which includes about 150,000 housing units that belong to so-called institutional investors. Historically, Berlin has been viewed as an urban center that has relatively low costs and rent rate, especially in comparison with other cities in Germany and all of Europe. Studies attest to the fact that the average prices for renting houses maintained homeostasis between the 1990s into the twenty-first century as a result of subsidies as well as consequential public investments; escalating construction activities at the outset of the 1990s; a herculean segment of both social and public housing; and ultimately, stringent rent controls they burgeoned at the outset of the 1990s.[4] Together these components all undergird a housing system that is much less susceptible to the dynamics of the contemporary market. As a result, the process of gentrification has slowly gained traction during the 1990s and early 2000s, and in 2005, it was discussed in relation to particular neighborhood developments and evolution in various districts in Berlin, including Mitte and Prenzlauer.

However, gentrification has profoundly altered the housing market in Berlin, as rent levels have exponentially increased despite the adverse economic conditions in Berlin. Both housing and urban initiatives are to blame for such a rapid shift in the housing market in the city. Government subsidies at the fin-de-seicle that were provided for construction and renovations previously were wholly detracted. Moreover, an exponential decrease of new activities in conjunction with escalating number of households, there was immense pressure placed on the real estate and housing markets. The city continues to be confronted by  a budgetary quandary, as the privatization of more than 200,000 housing units materialized. As such, social housing lost currency in a radical manner. Nonetheless, rent regulations that have been in place for a protracted period of time in addition to constraints placed on the planning for housing were removed. Such deregulation has enabled urban planning to be reoriented towards upgrading housing in Berlin which continue to yield high costs that working-class and immigrant tenants simply cannot afford.

Gentrification Cycle in Berlin

Within such modes of urban development, gentrification has emerged as the hegemonic trends for the augmentation of inner-city neighborhoods in Berlin. As such, gentrification has almost become mainstream in Berlin, which has resulted in a quandary in which gentrification cannot be adequately described with regards to the neighborhood scale. Neighborhood relations must be considered in order to fully comprehend the intersectionality as well as dynamics involved with the process of gentrification. Such a methodology renders it easier to pinpoint the dynamics of gentrification in manifold places and phases, which enables researchers to better see the exclusive nature of the dynamics of gentrification even when looking at tenuous social groups residing in Berlin. The variations of gentrification taking place concurrently in the inner cities of Berlin exhibit differences in the process when comparing neighborhoods therein. There have been a handful of new building projects in neighborhoods such as Prenzlauer Berg and Mitte in an effort to upgrade them, thereby suggesting that these respective communities are currently in an intensified gentrification phase while locales such as Friedrichshain is in a nascent gentrification phase where renovations to the housing already there is taking place.[5] More classical manifestations of gentrification can be seen in Kreuzberg among other districts where rental prices continue to escalate. As such, the inner cities of Berlin are being restructured as a result of the spatiality of the gentrification process in addition to the existence of variations of gentrification.

In the inner cities of Berlin, the spatial dynamics of the upgrading process suggest that there is a piecemeal process demarked by various upgrading waves that are happening concurrently, although on an idiosyncratic basis. The pioneer phase of gentrification in which existing homes are upgraded is followed by a phase in which there are investments made in the housing market, which catalyzes displacement of low-income homes in an exclusionary manner. The ensuing phase is referred to as super gentrification in which luxury homes are constructed, which is evident in both Prenzlauer and Mitte districts. Gentrification in Kreuzberg deviates from this blueprint, as there are vastly different conditions therein. During the 1980s, reinvestment took place in Kreuzberg, and subsequently droves of gentrifiers flooded in, which spawned a second round of neighborhood upgrading. Gentrification in Neukolln was delayed and has only begun fairly recently, although it is taking place in a celeritous manner. Gentrifiers have flooded in there from all around the world which is why gentrification has been driven at such a rapid pace.

Another trait that can be discerned within the processes of gentrification in Berlin is its spatial gentrification in a step-by-step manner. During the pioneer stage, the so-called “out-and-out migration” to other districts over a five year span. Gentrifiers—dubbed pioneers—move in a way that reaffirms the logic of gentrification as discussed above. Districts that are in their nascent phase of gentrification have rising rental prices within the retail segment as well as for housing, which means that interim and sub-cultural utilization is reliant on affordable space that is available. Such use of space is linked to a shift in the appearance of the new locales, particularly in districts for hipsters and artists from vantage point of the public at-large and the media. As such, within discussions about gentrification, a cultural argument can be proffered regarding the necessity to persistently ascertain both new and authentic spaces in order to expound on the movement that undergirds the gentrification process. Upon closer examination of the various local trajectories underscores the central role that political policies and regulations have for an explanation of the gentrification process that is taking place in Berlin currently. A discussion on the core precepts of the gentrification process in three different districts in Berlin will enhance this discussion on the variations of gentrification that can be discerned in Berlin.

Amplified Gentrification via Luxury Housing Projects

Both Prenzlauer and Mitte are considered historical housing districts, especially during the last couple of decades as the housing there was constructed during the latter half of the nineteenth century. They have emerged as notorious symbols of how gentrification is a political process that calls for the official promulgation of urban renewal in certain districts in addition to public support for “modernization” that is privately funded and results if the displacement of original residents as a result (Holm, 2006). Eighty percent of the buildings have been renovated, which is quite a high quota, so only approximately 25% of the original denizens still resided in the renewal locales. Sociological studies carried out in Prenzlauer Berg reveal that the average income level of the residents there has climbed by over 75% between the 1990s and 2000s. Mitte and Prenzlauer Berg were two of the poorest inner-city neighborhoods in Berlin throughout the 1980s and 1990s, yet they were quickly transformed and have become two of the more affluent districts. Although gentrification has been taking place for over two decades in Prenzlauer Berg, beginning in 2005, the contours of the process profoundly shifted. The renovation potential within the housing stock in the district had hitherto been tapped out, which means that there were no longer any antiquated buildings and/or infrastructure to gentrify. In addition, the zoning declaration of the majority of locales pinpointed for urban renewal in Mitte and Prenzlauer Berg have already expired, and the various binding legal instruments and obligations stipulated in the planning and building policies under German law were annulled at the same time.[6]

Because of the rent chasms evident in the housing stock were closed, there are more opportunities in the lots that have not been developed. As a result, a change in investment strategies with regards to new construction of buildings rather than mere renovation in which novel construction projects have occurred in the open spaces and empty lots. Since 2005, there have been  over 1,250 apartments built or are currently under construction that are considered to be luxury apartment complexes in Prenzlauer Berg and Mitte.[7] These new luxury building projects are on the market as condominium apartments that can only be characterized as enclaves in which luxury housing is available. New residents in these respective districts primarily come from households already in the locations, although there are profound variations in comparison to the traditional gentrifiers that inhabit Berlin pertaining to their income and occupations. Although there is a dearth of statistical data regarding these components, there is information about the sales figures and prices in addition to media documentation that provide a somewhat clear image. The residents in these districts primarily are between the ages of 35 and 45 and live either in a domestic partnership or by themselves and have 1 or 2 children. They can be described as middle and upper class, as they typically work as PR spokespersons, architects, doctors, administrative workers, management consultants, and professionals.[8] Prominent members in the cinema and art industries are among the new residents as well. Gentrification endeavors underscore the internationality of the new residents that live in those respective cities, as the majority of the new residents come from the United States,  Canada, and western European nations. Ethnic minorities from eastern Europe and Turkey have also been reported as purchasers of the luxury apartments.

The luxury apartments on average cost almost four thousand Euros per square meter, which is exceedingly high for the housing market in Berlin. As such, only the wealthy who earn high incomes can afford buying these apartments. Although this development in Berlin’s housing market is aligned with the super gentrification phase within global discourses and debates in which luxurious housing is very expensive and thus only can be afforded by members of the middle and upper classes, it also must be stressed that it does not evince a natural development as a particular shift in the politics that govern Berlin’s gentrification processes.[9] Such a boom in luxury housing in neighborhoods that have already been gentrified such as Mitte and Prenzlauer Berg is wholly predicated on both the closing of any rent gaps that exist in the old housing market and the eradication of administrative constrictions in the building policies for new construction sites. As such, the current gentrification processes taking place in Berlin cannot be fully envisioned and comprehended without knowing the urban renewal policies that have been implemented in East Berlin over a protracted period of time.

Rental Gentrification: The Case of Kreuzberg

Gentrification in Kreuzberg can only be fully understood by knowing the entire history of urban planning and renewal policies within the district. Careful urban renewal and planning has historically been the policy in Kreuzberg and has shaped the contours of urban development there since the beginning of the 1980s. This particular policy germinated out of the militant protests waged against renewal policies that were previously in place, thereby spawning herculean deconstruction projects of historical buildings that were there.  More than one hundred buildings that were squatted in were demolished, thereby spawning trenchant, civic unrest. As such, careful urban planning took the place of previous legislation and created a new blueprint for urban renewal predicated on preserving structures that were already in place in addition to maintaining the social make-up of the residents living in the district and encouraging residents to actively participate in the process. From an economic vantage point, careful urban renewal depended on public funding, as approximately 95% of the renovated buildings benefited from public subsidies as well as land transfer to developers. Interestingly, this policy has contradictory ramifications once implemented in the gentrification process. Kreuzberg became a relevant player on the housing market, and one of the prerequisites of the process of gentrification was that the public was greatly involved. In addition, the utilization of public subsidies for the construction of standardized housing was crucial for the renovation of apartments.  In conjunction with rental caps, this policy has aided poor and low-income households become high-quality, and modern within this central district. As such, poor residents lived in very attractive housing in all of Berlin.

Such a paradox between private housing and public initiative is critical in the changes that are currently discernible in Kreuzberg. Two decades after the implementation of the policy dubbed careful urban renewal, Kreuzberg remains the at the center of gentrification in Berlin. Rental contract prices continue to rise at an exponential rate, which is why there are so few affordable apartments there as the supply has greatly dwindled. Careful urban renewal calls for intervention within the welfare state, which has maintained the residential infrastructure and the income at the time, emerged as a hindrance for the majority of property owners. Moreover, escalating rent expectations fomented tension amongst poor and low-income residents and their landlords. As such, there was a lot of pressure for the low-income residents to be displaced. The rent gap that created the pressure for low-income residents to be displaced is primarily predicated on the dissonance between new contracts and the rent prices that were stipulated in rental agreements that are long term. Because of the heritage of the current urban planning and renewal policy, there is no pertinent latitude for increases in rent within the context of modernization. Landlords increase rents in three different ways. Landlords, by German law, cannot increase rents solely for the purpose of modernization due to the upgrades in the quality of housing facilities. As such, a rent gap is present if the upgrades actually enhance the infrastructure of the housing rather than just merely upgrading of existing housing structures. Another way to elevate rental rates in long-term rental contracts is to align them with the mean rent level for apartments and flats that are commensurate. German law mandates that rent can only be hiked by 15% at the maximum every three years, which is in place to protect tenants.  Finally, landlords can close any new contracts in order to increase the rent, which is seemingly a loophole that facilitates the gentrification process.

Kreuzberg, unfortunately, is confronted by gentrification in the absence of modernization predicated on the conditions of urban renewal therein. The rent gap that undergirds the process of modernization is missing in Kreuzberg, which has forced landlords to alter their valorization strategies in order to get the most use out of their properties. Replacing tenants for residents who can actually afford higher rents is the primary goal of the new rent contracts. Almost all property owners have realized that new rental agreements can be made so that they can increase the price of rent, which enhances the exploitation that undergirds gentrification processes. Consumers view buildings as a great investment that can yield higher profits if original residents are displaced so that new rental contracts can be forged and rent prices can be elevated. Moreover, many convert rental properties into properties for sale on the housing market, which further enhances the displacement of low-income residents and, in the case of Kreuzberg, those who refuse to conform to the mainstream. In Kreuzberg, the dynamics involved in urban upgrading are primarily propelled by new rental agreements and higher prices to rent properties therein.

Fractured Urban Culture: The Problem of Drugs in Hipster Circles in Kruezberg

Gentrification in Berlin has fomented a fractured urban culture due to how bifurcated the city has become as a result of immigration. Berlin has emerged as one of the most drug-ridden cities in Europe, and Gorlitzer Park—commonly referred to as Gorli–has been dubbed the biggest drug-dealing center in all of Germany. Upon arriving at the park, within minutes people are approached by dealers probing whether or not they “want to score.” Very minimal amounts of drugs are actually carried by dealers, as the majority of the drugs are stashed in nearby bushes. The escalating rate of refugees in Germany is blamed for rampant illicit drug selling due to the fact that many of them by law are unable to work. The city government of Berlin has faced several problems as a result of the illicit activity going on in Gorli, which is located within the hipster borough known as Kreuzberg district. Located near the railway, Kreuzberg is one of Berlin’s most densely populated districts, and over 120 drug dealers—the majority of whom are of African descent, although some of the dealers are white–are active in it. Marijuana, cocaine, ectasy, heroin, and crystal meth are all dealt in this hub, and the majority of customers are tourists who are drawn into Berlin because of the hipster reputation and for the infamous bar and club scene.[10]

Unfortunately, the problems with illicit drug selling has been exacerbated by the authorities in the borough who fear losing the political support of the hipsters and young voters drawn to the alternative scene. Attacking immigrants is viewed as unfavorable by the authorities if they want to maintain their political support. The mayor even supported the legalization of soft drugs as a means of ameliorating the problem.  Local authorities remain in a proxy war from an ideological vantage point with the radical left-wing activists in the burrough.  The activists contend that clamping down on drug dealers and driving them away from Berlin would hasten gentrification, which is a decried phenomenon amongst the hipster and alternative crowds that has increased since the Berlin Wall fell in 1989. At the same time, many of the restaurant and bar owners in addition to angry denizens argue that ignoring the drug scene has hurt the local economy and disparaged trade. Young children have found balls filled with cocaine on the playgrounds, which poses a great danger to the safety of the youths there.

Concerned denizens in Kreuzberg have launched various initiatives for street laborers to be put on duty in order to assist in the mediation of any conflicts that break out as a result of the drug scene. However, radical activists have lashed out against any individuals who try to regulate the drug trade through vandalism and raids. Halting gentrification has thus torn some districts asunder, and Kreuzberg serves as a microcosm for what is transpiring throughout Berlin. Police have increasingly made more appearances in the park in order to patrol the premises in large droves, sometimes over one hundred at a time. However, once the police arrive at the park, the drug dealers quickly scatter to avoid getting arrested. In addition, bushes in the park have been sheared so that there is less cover for the dealers to hide their drugs in. Enabling the drug dealers to work legally would solve the problems listed above, although doing so would also accelerate the reviled process of gentrification that continues to fracture Berlin’s urban culture.

Conclusion

It can be concluded then that Berlin has emerged as a showcase for the process of gentrification, a process that is not homogenous but rather quite multi-faceted. Various developments that have taken place in Berlin that the various mutations of the process have increasingly germinated in Berlin. It is noteworthy, however, the evolution of inner city neighborhoods in Berlin have not merely emulated the global blueprint for the process of gentrification.  There are particular traits that developed on an idiosyncratic basis and can only be fully comprehended if specific local trajectories are taken into consideration. Examining gentrification in Berlin further informs an ongoing, international dialogue about the phenomenon of gentrification. It is necessary to divorce neighborhood studies from research on gentrification. Local research is necessary in order to arrive at a full picture of gentrification with regards to actors involved, but a broader analysis facilitates better comprehension of gentrification on a macro level such as the conditions of the housing market that are necessary for gentrification to manifest. Focusing gentrification at the city level rather than at the local underscores various multiplicities of the process of gentrification. Specific conditions must be present within neighborhoods in order for gentrification to take place. Gentrification is clearly historically embedded within inner city districts and neighborhoods, as discussed in the cases of Kreuzberg and Prenzlauer Berg where extant rent chasms depend on policies of urban renewal and evolving interventions within the local administrative and political conditions of the housing market. Indeed, the government retains a latent role in the process of gentrification, while the decline of subsidies has also contributed to the acceleration of gentrification in Berlin. Rent gaps existing within local political matrices must be further explored, and urban renewal strategies in addition to housing politics provide the foundation for gentrification to take place.

Bibliography

Atkinson, R. “Padding the Bunker: Strategies of Middle-class. Disa?liation and Colonization in the City. Urban Studies, 43.4(2006): 819-832.

Bernt, M. and Holm, A. “Exploring the substance and style of gentri?ca-tion: Berlin’s ‘Prenzlberg.’” In Atkinson, R. and Bridge, G. (eds.). Gentri?cation in a Global Context. Routledge, London/New York, 2005.

Gothan, K.F. “Tourism Gentrification: The Case of New Orleans’ Vieux Carre (French Quarter).” Urban Studies 42.2(2005):1099-1121.

Holm, A. “Urban Renewal and the End of Social Housing. The Roll Out of Neoliberalism in East Berlin’s Prenzlauer Berg.” Social Justice 33.3 (2006): 114-128.

Holm, A. “Townhouses, Urban Village, Car Loft. Berliner Luxuswohn-anlagen als ‘dritte Welle’  der Gentri?cation.” Geographische Zeitschrift 98.2(2010): 100-115.

Jamin. “Gentrification killing Kreuzberg.” Original European Tours. http://originalberlintours.com/gentrification-killing-kreuzberg/ (Accessed November 6, 2015).

Lees, L. “Super-Gentri?cation: The Case of Brooklyn Heights, New York City.” Urban Studies 40.12 (2003): 2487-2509.

Lees, L., Slater, T., and E. Wyly. Gentrification. New York: Routledge, 2008.

Marquardt, N., Füller, H., Glasze, G. and Pütz, R. “Shaping the Urban Renaissance: New-build Luxury Developments in Berlin.” Urban Studies 50.8 (2013): 1540-1556.

Patterson, Tony. “Kreuzberg: Berlin’s hip district becomes a battleground between dealers and gentrification.” Independent. http://www.independent.co.uk/news/world/europe/kreuzberg-berlin-s-hip-district- becomes-a-battleground-between-dealers-and-gentrification-9909118.html (Accessed November 6, 2015).

[1]L. Lees, “Super-Gentri?cation: The Case of Brooklyn Heights, New York City.” Urban Studies 40.12 (2003): 2487-2509.

[2]L. Lees et al., Gentrification (New York: Routledge, 2008). 4.

[3]K.F. Gotham, “Tourism Gentrification: The Case of New Orleans’ Vieux Carre (French Quarter).” Urban Studies 42.2(2005):1099.

[4]Lees et al., Gentrification, 67.

[5]Ibid.

[6]A. Holm, “Urban Renewal and the End of Social Housing: The Roll Out of Neoliberalism in East Berlin’s Prenzlauer Berg.” Social Justice 33.3(2006): 114.

[7]A. Holm, “Townhouses, Urban Village, Car Loft.” Geographische Zeitschrift 98.2(2010): 100.

[8]M. Braun, “Townhouses and Lofts.” Berliner Zeitung(2008).

[9]Lees et al., Gentrification.

[10]Tony Patterson. “Kreuzberg: Berlin’s hip district becomes a battleground between dealers and gentrification.” Independent. http://www.independent.co.uk/news/world/europe/kreuzberg-berlin-s-hip-district-becomes-a-battleground-between-dealers-and-gentrification-9909118.html (Accessed November 6, 2015).