In April 2015, the finance committee of Germany's Bundesrat postponed the sale of the Dragoner Areal in Kreuzberg indefinitely. The site belonged to the Federal Institute for Real Estate Tasks (BImA) and was to be sold to the highest bidder. Citizens' initiatives and parts of Berlin's government opposed the plan.
What was at stake
The site is one of the last large undeveloped plots in central Berlin. Residents and social initiatives feared a sale to the highest bidder would lead to expensive condominium construction in a borough where displacement has been a contentious issue for years. Senator for Urban Development Andreas Geisel backed the critics: "It should no longer be whoever has the most money that wins everywhere, but whoever has the best concept."
Public land now serves urban development, not budget consolidation
The government defined "best concept" as a mix of affordable housing, social facilities and cultural offerings, ending the practice of selling public land purely for the highest price. Going forward, publicly owned plots were to serve urban development rather than budget consolidation. The Rathausblock today demonstrates how this shift continues to steer the market development.
Consequences for investors
The decision showed that political risks and the influence of citizens' initiatives are growing when it comes to developing large sites. At the same time, publicly owned plots are no longer available as development land for private actors. This increases pressure on private land and existing properties in boroughs such as Friedrichshain-Kreuzberg or Neukölln.
Where things stand today
Berlin ultimately acquired the site from the federal government and is developing it under the name "Rathausblock" as a model neighbourhood for cooperative housing, commercial use and culture. For Berlin's apartment market, the Dragoner Areal case remains an example of how priorities in public land allocation have shifted.
