Urban Development
Federal property allocation under scrutiny
Federal land in Berlin: How the highest bidder process slows housing construction
The Federal Institute for Real Estate Tasks sells land strictly to the highest bidder. The Senate and boroughs demand affordable housing. The dispute illustrated by the Dragoner-Areal.
Peter Guthmann
Berlin's Urban Development Senator Michael Mueller wants to stop selling state owned land exclusively to the highest bidder, so that affordable housing can be built. But this policy does not apply to federally owned land. The Federal Institute for Real Estate Tasks (BIMA) sells its properties by highest bid, because its legal mandate is to maximize revenue for the federal budget. This conflict of interest is intensifying in Berlin.
Dragoner-Areal: The current case study
The Dragoner-Areal in Kreuzberg, between the town hall and Obentrautstrasse, is up for sale again, once more via highest bidder process. A sale to an investor had already fallen through the previous year, after public pressure and borough demands for social housing made the deal unattractive. Now a new process is running along the same lines. The site is one of many inner city BIMA properties where apartments in Berlin could urgently be built.
Administration versus administration
The conflict has multiple layers. Stephan Regeler, BIMA's representative for Berlin properties, criticizes the slowness of Berlin's authorities. Inquiries are answered too late, agencies block each other. Anyone who has dealt with building permits or heritage protection in Berlin knows the problem. Even a dedicated housing construction coordination office seems to provide little help. This inertia slows the market development on both sides.
In response, the boroughs are threatening countermeasures. Kreuzberg's building councilor is considering blocking the zoning plan change for the Dragoner-Areal. The site is designated as commercial space and would need to be rezoned for residential use. Buyers of BIMA properties thus become supplicants.
Legislative change or cooperation?
For investors, the dispute creates planning uncertainty. Regeler points out that only a legislative change at the federal level could enable a departure from the highest bidder process. Initial proposals led by Berlin already exist.
Until such a regulation takes effect, pragmatic approaches like public private partnerships could be a path forward. The public sector could act as a partner and in return for financial participation ensure socially compatible housing projects on BIMA land. That costs money, but it would be a long term lever for urban development. Without constructive cooperation, the Senate and boroughs miss the chance to use valuable land for housing.