Kreuzberg vs. holiday apartments: new criteria for heritage protection areas

The borough of Friedrichshain-Kreuzberg has announced that it will update the assessment criteria for its social heritage protection areas (Milieuschutzgebiete). The aim is to make it harder, or impossible, to convert rental apartments into holiday lets. Borough Mayor Franz Schulz (Alliance 90/The Greens) cites housing shortages and rising rents on new leases as the reasons.

What it is about

In a press release, Schulz writes: "The goal is to return apartments that have been converted into holiday lets to the regular rental market." Using residential space for tourists worsens the situation on the Berlin apartment market and contributes to social segregation, according to the borough. Friedrichshain-Kreuzberg is following the borough of Pankow, which already applies similar rules. The new regulation is expected to take effect at the end of March 2013.

Which areas are affected

The new rules apply to the borough's social preservation areas. Specifically, the borough names the neighbourhoods around Boxhagener Platz, Bergmannstrasse-Nord, Chamissoplatz, Graefekiez, Hornstrasse and Luisenstadt. These are locations where demand for apartments has exceeded supply for years. Similar trends are visible in Neukoelln, where the authorities are likely watching the Kreuzberg regulation closely.

Consequences for property owners

For owners relying on short-term letting, this creates uncertainty. In the named areas, permission for holiday apartment use may be refused in future. Existing holiday apartments without a permit come under scrutiny. Returning units to the regular rental market typically means lower revenue.

Misuse prohibition at state level

In parallel with the borough-level initiatives, the Senate is negotiating a city-wide law prohibiting the misappropriation of residential space. A compromise is emerging within the red-black coalition: a registration requirement for holiday apartments and a four-year transitional protection for existing listings. The final shape of the law is still pending. For investors, the message is: regulation is coming, but the details differ depending on the borough and timing.