Berlin: On the way to a mega-flat community

Is Berlin running into a demographic trap

Depending on the reading, there are currently up to 200.000 apartments missing in Berlin. This threatens the German capital with considerable demographic consequences in the long term: Families or couples are waiting in vain for an opportunity to expand. This affects family planning and the birth rate. In 2018, Berlin's birth rate of 1.44 children per woman was 1.7 percent below the 2017 rate, despite the still high immigration rate of about 35,000 people in 2018. Distributed across Berlin, only 40 births more than 2017 were registered last year. According to statisticians, the birth rate in Berlin does not drop any further only because many Berlin women are currently at a reasonable age. Mothers in Berlin are on average 30.2 years old with their first child.

While young people search for housing without success, older people no longer feel the need to give up their mostly larger apartments for the benefit of future generations. Not only because existing rents are planned to be lowered artificially , but also because there is no smaller, affordable and, at best, age-appropriate housing available. Because large apartments remain affordable for the rest of one's life, under-occupancy among the old and over-occupancy among the young Berliners are the result. However, it is not only young Berliners who are affected by the shortage; newcomers are also standing in ever-longer queues on the increasingly tight housing market. Demography suffers because young couples delay their desire to have children and the voluntary migrations of subsequent generations to Berlin decrease. This development is already visible. After years of strong growth, only just under 6.300 people moved to Berlin in the first 6 months of 2019. In the comparison period 2017/2018 it was three times as much.

Households are buffering the backlog

Those who nevertheless come to Berlin, or are already registered here and cannot find their own place to live, are forced to resort to existing households. The household sizes show that the temporary alternative has already become a permanent solution. Statistically, since the 2011 census they have been updated according to the household generation procedure (HHGen, Kosis). According to statistical extrapolations, the average household size (2018) in the city is 1.77 persons.

Inner-city neighbourhoods become flat-sharing communities

As a measure for households, the statistically updated household figures since the microcensus in 2011 appear to be outdated. Where do households live without their own living space, if not in existing households? We therefore calculate the actual household size as the quotient of the number of registered residents by the housing stock. It can be seen that these calculated household sizes are almost everywhere above the statistical values, strongly differentiated according to districts and further refined according to quarters. The largest households according to this calculation method are in Berlin-Wedding with an average of 2.12 persons per household. The statistical household size here is only 1.76 persons.

Approximately 126,000 apartments vacant?

Interesting and also new insights into the housing stock in Berlin are provided by the figures of the Microcensus 2018. Every four years, a sample survey is conducted on the subject of housing and the details from 2018 are surprising. One of them is the number of empty flats.
The figures in the microcensus are always somewhat blurred. Firstly, because it is only a sample survey and not a full survey, as was the case in 2011, and secondly because even complex statistical methods are ultimately "only" statistics. Nevertheless, the figure of 146,100 empty flats echoes. Of these units, 125,900 apartments remain in residential buildings that were found to be empty after the deduction of buildings used primarily for commercial purposes.
The reference value for this statistical vacancy is not the entire housing stock, but only the rented stock. In order to determine the statistical vacancy rate, 17.4 percent of owner-occupied flats (owner-occupied flats) must be deducted from the total housing stock of around 1.95 million units. The ownership rate, which has risen to 17.4 percent, is another surprise of the microcensus. After deducting the approximately 340,000 owner-occupied dwellings, 1.61 million rented dwellings remain. In the microcensus, however, only 1.446 million have been identified as rented. Therefore, statistically speaking, the 125,900 apartments mentioned above are missing from the total account. That would be a vacancy rate of 8.7 percent and therefore a sensation. This would also be the case if the figure were corrected downwards by a few tens of thousands of units for reasons of statistical uncertainty.

How many apartments are actually missing in Berlin?

For various reasons, the actual housing deficit in Berlin can only be estimated with certain uncertainties. The population figures have been updated by the Office of Statistics since the 2011 census. Statistical deductions from the population register flow into the update twice a year and the figures are updated on the basis of births and deaths as well as immigration and emigration. The difficulty lies in quantifying how many of the registered inhabitants actually (still) live in Berlin. For arrivals and departures within Germany, the registration and deregistration procedure is automated and relatively accurate. If a person with his or her main residence registers elsewhere, he or she is deregistered by the authorities at his or her previous place of residence via data reconciliation. In the case of foreign persons, this possibility does not exist. In most cases, the interest in registering when moving to Berlin outweighs the interest in (properly) deregistering when moving away. It is not clear how high the black figure is in Berlin. For years, the number of residents registered has been successively and continuously adjusted; most recently, before the European elections, there was a major correction in the number of registrations concerning the return of election documents.

Approx. 3.8 million inhabitants

The question of how to deal with secondary residences contributes significantly to the estimation of the housing deficit. Anyone who has a second home in Berlin not only occupies or needs an apartment theoretically but also practically. As of 30 June 2019, the number of registered residents with main residence and secondary residences was 3,754 million and 123,000 respectively. Berlin has a total of 3.877 million registered residents with main and secondary residences. This figure must be corrected for a hard-to-estimate over-counting. In relevant statistics articles the number of approx. 60,000 secondary residences is mentioned more often. For foreigners who have left Berlin without deregistration, reliable estimates are hardly possible. It seems reasonably realistic to estimate Berlin's population at around 3.8 million at present.

How large is the demand for housing?

Even if the perceived reality is that the city is getting narrower, fuller and louder: The question of how many apartments are actually missing cannot be limited one-dimensionally to the current and acute situation. Construction is being carried out not only for today's Berlin, but also for tomorrow's Berlin and for a growing city. The examples of the past show that reliable planning is not possible without reliable population forecasts. In the early 2000s, politicians and statisticians in a crisis-ridden Berlin expected that by 2020 Berlin would shrink from its 3,382 million inhabitants to a maximum of 3,366 million by 2020. How much the forecasts were wrong can be assessed by everyone today. But even today there are many questions and many unknowns in the equation. If we nevertheless dare an attempt, we assume that there are currently about 3.8 million inhabitants, including secondary residences. With the statistically valid 1.77 persons per household, Berlin needs about 2.15 million dwellings. The housing stock amounts to approx. 1.95 million units. The delta in this calculation would be around 200,000 apartments. This figure would have to be reduced by the part of the vacancy that can be made available to the housing market. In addition, the unrecorded figure for foreign residents who are still reported but no longer living in Berlin must be deducted. Taking these factors into account, which do not claim to be exhaustive, into account, the housing requirement is currently around 150,000 housing units, excluding current population forecasts.

In spite of emergency: new residential construction lagging behind

Regardless of whether secondary residences, vacancy rates or household sizes are taken into account. Berlin's housing problem is very real when it is removed from theory. New construction could help. But that is a slow process. For example, an analysis of construction completions from 2011 to 2018 shows that the number of new buildings is not even sufficient to compensate for the influx. Most recently, 16,956 units were completed in 2018. However, the building permits issued in the first three quarters of 2019 indicate that construction activity will continue to decline. In September 2019, only just under 800 apartments were approved, less than half of the cases approved a year earlier. Private investors, who shoulder a large part of the construction activity in Berlin, are reacting to the rent cap approved by the Senate in October 2019 with an emphasis put on restraint in construction.

Construction completion map by districts and quarters

Our studies show the construction completion reports since 2001 (source: Amt für Statistik Berlin-Brandenburg). We have summarized the figures available at LOR level for the former districts.

Conclusion

The results of the sample survey of the 2018 Microcensus raise questions. 

• Are almost 126,000 flats actually vacant? A vacancy rate of approx. 8.7 percent would change the view of the housing market. 
• Is Berlin on its way to becoming a huge flat-sharing community? A lack of flats is leading to growing household sizes. This will not remain without demographic consequences.
• How big is the housing deficit really? Uncertain parameters such as secondary residences and vacancies make it difficult to take stock.
• Where is construction going on, where not? Since 2011, new residential construction has predominated in the eastern districts.