Urban Development
Berlin housing policy 2016
Tenants' association demands more social housing: what it meant for Berlin's market in 2016
In 2016, Berlin's tenants' association demanded that two thirds of new apartments built by state-owned companies be designated as social housing. A look back at the demand and its consequences for property owners.
Peter Guthmann
What the tenants' association demanded in 2016
In May 2016, Berlin's tenants' association (Mieterverein) made a specific demand: the city's six state-owned housing companies should build two thirds of their new apartments as social housing, up from the existing 30 percent. For re-lettings in their existing stock, the share allocated to households with a housing entitlement certificate (WBS) should rise from 40 to at least 55 percent.
The backdrop: Berlin was growing by tens of thousands of residents each year, and construction could not keep up. Affordable housing was becoming scarce, particularly in central locations like Mitte and Prenzlauer Berg, but also in boroughs such as Neukoelln. A 2012 agreement called the "Alliance for Social Housing Policy and Affordable Rents" had already tasked the six municipal companies with expanding their stock to at least 300,000 apartments. The tenants' association argued this was not enough.
What it meant for owners and investors
The demand sent a political signal. The focus was on regulation and strengthening the municipal housing sector. For private owners and investors, three questions arose.
First, regulatory risk. A growing share of social housing pointed toward further interventions in the free market, a trajectory that later culminated in the rent cap (Mietendeckel).
Second, the impact on the open market. More social housing could have eased pressure in the lower and mid-range price segments, with consequences for apartment buildings and their yields.
Third, location. Depending on the borough and the share of municipal apartments, investment opportunities varied.
What happened next
The two-thirds quota was never implemented directly. Still, political pressure on both state-owned and private developers increased steadily in the years that followed. Market data show that purchase prices continued to rise despite regulation, because demand and population growth outpaced the limited supply. The 2016 debate was an early sign of the housing policy battles to come, from the rent cap to the expropriation discussion.