by Valeria Farina

The chairman of the board of Investitionsbank Berlin (IBB) Dieter Puchta, in the 2008 IBB Housing Market Report, states that “Berlin’s housing market is on the move” (1). The report’s focal point of the year is the population’s migration and structure in the North Neukölln which is reputed as very strong within the neighborhood. Additionally, the report sustains that the variance of important indicators within the individual districts shows how a small-scale analysis produces a differentiated knowledge, vital for an engaged and attentive research. In this vein, I consider fundamental for my ethnographic inquiry to amplify and focus on the indicators regarding mobilities, vacancies, ancillary costs and incomes inside the specific district under examination. My analysis will try to spark a debate on how the quantitative data of the rental market situation of the Berlin of 2009 is converted and entangled to discourses of territorial stigmatization (Wacquant, 2008). I am promoting a qualitative perspective on numbers and the importance of oral testimony, while taking into strong consideration how the processes of representation coexist and enable economic and political market decisions. 

In the IBB report of the year 2009, the district of Neukölln is pictured as traditionally working-class with a heterogeneous offer of residential neighbourhoods of different types. In the core area in the north, there are simple residential areas, mainly with old buildings, but also some newer multi-storey housing. Besides, the district of Neukölln combines very different types of development: “a dense, closed perimeter block of the Wilhelminian period dominates the workers‘ quarter near the centre in the north. While, in the north-east of the district, beyond the Neuköllner Schifffahrtskanal and the S-Bahn tracks in Köllnische Heide, are the two multi-storey housing areas at Schulenburgpark and Weiße Siedlung. From the Teltow Canal to the south, there is an increasingly loosened-up development, the core of which is characterized by the garden city development of the 1920s” (87).

Continuously, the same report states that the proportion of single-person households in Neukölln  is 54.1%, slightly above the Berlin average of 53.4%. However, the average household income is €1400/month, lower than the Berlin average that is €1525/month. Which is due in particular to the very high unemployment rate (18.7%) that is the highest in a district comparison (Berlin’s average unemployment rate for the year is 13.9%). Asking rents in Neukölln are predominantly in the lower range between €4.51 and €6.10/m2, with an average asking rent is 5.19 euros/m2 that slightly below the Berlin average of 5.82 euros/m2.

As regard to the topic of mobility, the IBB 2009 Rental Market Report evidences that “the mobility rate in Berlin has fallen from 17.2% to 13.2% over the past ten years (1999 to 2008). This indicates a decreasing frequency of moves, which in turn could be an indicator of a tightening housing market. The relatively largest decline is in Pankow (14.2%), Neukölln (13.7%) and Marzahn-Hellersdorf (12.4%)” (59). Besides, in the previous IBB annual report the mobility in Neukölln was indicated as predominant within the district. In fact, during my ethnographic examination, Helena, my principal informant, disclosed to me that she was moving within the district (from the North West to the North East of the district) and how her neighbors “have not changed at all in 14 years. They live here for all their lives, raise the children, grow older here, and we know almost everybody”.

According to the IBB housing market 2009 report, the rate of housing vacancies in Berlin is generally in decline (decline from previous year +0.01%). Nonetheless, due to the vacancy decline, the rents for new tenancies in Berlin rose on average by 2.4% in the entire market segment. Furthermore, the IBB 2009 report articulates that “above-average vacancy rates are generally found mostly in simple inner-city locations with stocks of old buildings, even in popular neighbourhoods. This demonstrates that vacancies are not automatically an indicator for relief in sub-markets. The reasons for vacancies are correspondingly diverse: besides unfavorable location parameters, poor structural conditions or a lack of professionalism on the part of landlords, structural reasons must also be considered in many cases. A difficult social environment is an obstacle to renting out in other areas” (87). This last statement of the IBB 2009 report is fundamental and has had a significant influence on my approach and reading of the data collected during my ethnographic inquiry. The example provided in the interview of Helena, a tenant of a council house in the North East side of the district of Neukölln, open the space for consideration on the social and cultural meaning of vacancies and how the process of territorial marginalization intertwined with practices of the privatization of the rental market. 

Back in 2009 Helena, a freelancer in her middle twenties working for the creative industry, and her boyfriend decided it was the time to move together. They both would leave their shared apartment (WG) and start looking for a two-room flat to make their new home. Helena does not remember the website anymore, but she is sure she found it somewhere online, and says: “it was an almost one-year-old advertisement that no one has looked at. When we called the company, they were very surprised that someone was interested in coming into this area.”

Helena moved to Berlin from a southern European country a couple of years prior, rented her first apartment in North Neukölln (NK), in the Tempelhof area, and now having to look for a new place, she wanted to stay in the same area: “I felt like home here (in NK). I guess Kreuzberg would have been also an option, but we were not expanding our search.” Recalling the first visit to what will become her new flat, she narrates a peculiar anecdote, a first glimpse to what was the perception of the district of NK back in 2009. She tells me: “The real estate company was in Charlottenburg, but they didn’t want to come to NK to show us the flat. So they asked us to pick up the keys from the office. We went to see the flat alone with a bottle of wine. We sat down in an empty flat, drank the bottle, and had the time to feel if this was our house.” The experience of the first visit to the flat is in complete contrast with viewing experiences from nowadays. Helena brings up in comparison examples of “horror stories” told by other friends obliged to queue outside for the same apartment with 50 other people. 

What was also very different in her eyes from the current situation was the abundance of empty apartments, in fact, her search only lasted two months. She says that in NK “there were too many empty flats”, to her memory she had no problem to find another apartment in her favorite spot of the city.

When I question her about possible problems that she encountered while looking for a new flat, she says that the problem for her was not the lack of vacancies, but the request from the real estate company for a commission. She explains that the commission was for an amount within the range of €1000-€2000. The commission was asked at the beginning of the rental contract, together with first rent and three months cold rent as a deposit, but to the contrary of the deposit, would not be given back at the moment of moving out. She explains that this additional investment for her and the partner was a burden that they were not ready to afford: “That’s what took long. We were young, we were not ready to give away this amount of money. It happened a lot in the area of Tempelhof, that at the time was still an airport, and no one wanted to go there.”

Again, in this case, she is able to make a comparison with the actual situation of the rental market in NK because lately, she was looking to move in the same area but to a higher floor. She was shocked and abandoned her search soon because “the rent has gone as crazy as the rest of NK. Even if this area hasn’t changed so much.” These feelings expressed by my informant are backed up by an article from the Berliner Morgenpost that shows the development for new rental contracts from 2009 to the present. In the graphic presented in the article, the lines were steadily going up but only until the more recent years. In the article are reported the findings of the CBRE-Germany, a worldwide real estate company, that descry the reason for the now weakened rent increase in the fact that the rent burden limit has been reached for many. The three areas, detected in the CBRE-Germany report, where prices have almost doubled since 2009 and rents continue to rise sharply, are Potsdamer Platz, the Neuköllner Kiez around Richardplatz (with a 99.2% increase in rents), closely followed by Rollbergstrasse (98.2%) also located in Neukölln. The Berlin Morgenpost article is also sharing the remarks done by Reiner Wild, head of the Berlin tenants‘ association, that underlines the facts showed by the figures: “While tenants with high purchasing power who have moved in can flexibly supply themselves on the Berlin housing market, the housing cost burden for lower-income households is reaching its limits.” The Berlin tenants‘ association now fears that the still relatively cheap alternative districts in the outskirts will no longer serve as an alternative, as rents there are also increasing overall. This same point is emphasized by Helena during the interview when I ask her if she felt that at the time the price-value of the flat was correctly adjusted. She says: “Well, now for sure! Considering how it is now, but at the time did not feel the cheapest. It felt average, there were cheaper places. But now it is actually cheap for NK. Nowadays, you pay three times more for the same amount of space.” Her perception is somehow corroborated by the official numbers, in fact, a graphic posted on the Berliner Morgen in 2018 shows that the increase in rent is for 110% since 2009, cold rent for the postal code 12059 is reported now as €10.92 per sqm (CBRE Annual Report 2018). Nonetheless, the boost in rent price is definitely substantive if considering that the income level for the household is not raising for the same percentage. 

The place where Helena has been living with her partner since 2009 is a two-room apartment on the ground floor of a council house. She pays a cold rent that at the beginning was of €460 but accommodates to €480 in the last twelve years (4.34% raise), for a 70sqm surface that makes it roughly to €6.5/sqm. The apartment has one living area which is the winter garden and the dining room, a kitchen, a small bathroom and in the back a room for sleeping. Helena’s description of her flat is still very positive, she says: “I am still in love with my kitchen. I love that we have a little winter balcony. We miss the outside balcony, but like this, we have a balcony the whole year.” However, after so many years Helena and her partner started to consider moving out and to a higher floor: “We would love to have a bit more light in the morning. Likewise, we would love to stay in our area. We like it very much. I would only consider if something affordable is coming up in our area.” 

For now Helena and the partner are staying in their flat and can count on safety because of the ‘Act to revise legal regulations on rent limitation’ (Gesetz zur Neuregelung gesetzlicher Vorschriften zur Mietenbegrenzung). First discussed in June 2019, the law was passed by the House of Representatives in January 2020 and is intended to cap the rent level of around 1.5 million rental apartments in Berlin which were built before the end of 2013. (IBB 2019 Market Report). In the IBB report of the year 2019, Katrin Lompscher, the senator for Urban Development and Housing, explains that the necessity of this law is “to ensure that households with small and medium incomes are not forced out of their neighbourhoods by this development, Berlin has, for instance, significantly stepped up its measures to protect the social environment. In an effort to give tenants in Berlin a breather before further rent increases take place” (1). The same year’s report states a different opinion regarding the cap of the rent, made by the chairman of the IBB Board Dr Jürgen Allerkamp: “I make no secret of my concern that reluctance on the part of the big housing investors will prevent the desired market relief in the form of additional housing. It is therefore all the more important to make additional efforts to promote new residential construction.” Allerkamp concern is about the fact that new construction by private investors will be less desirable due to the cap rent possibility, and so more public construction with rent control are necessary to resolve the housing demand of the developing city. For years, the supply side of the housing sector has been marked by an extreme shortage in new home construction. In Berlin, the number of construction permits decreased again during the first three quarters of 2009. At the same time, the demand keeps growing. 

What chairman Allerkamp and Senator Lompscher are discussing in the report is already happening in the area of the district where Helena lives. In fact, during our interview we took a short walk around the block while Helena introduced me to her neighborhood. As soon as we left her house, we took the first street on the left. She asked me to follow her because she wanted to show me something. Soon after she articulates her disappointment: “Look at that empty terrain, which has been completely abandoned for the last 14 years, now is going to be a newly developing area for family houses. But it is going to be so expensive that the people that live in this area cannot afford it. We are going to see a complete change of demography”. Helena’s preoccupation regards the discrepancy between income and household warm rent. This same preoccupation is reported in the 2019 IBB forecast that argues “the average monthly net household income in Berlin totaled €2,100. Below-average mean values were recorded in Neukölln, Lichtenberg, Mitte, Spandau and Friedrichshain-Kreuzberg.” The mandatory linkage to make at this point is concerning the employment rate, not a positive one in the IBB report: “Berlin’s unemployment rate reached 7.8% in October 2019 (slight increase over the previous year). (…) focal points with unemployment rates of over 9%, for instance, in Neukölln and Mitte” (2).

Strictly related to the topics of low incomes and unemployment comes the media image of Neukölln and its institutional representation. Veritably, the district introduction in the IBB 2008 Report that in that year focused on the district of Neukölln, starts this way: “Neukölln has a problematic image in parts. This is due in particular to a difficult social structure in the north of the district. It is therefore not surprising that Neukölln has several ‘areas with special development needs’ in which the instruments of neighbourhood management and district management are intended to improve living conditions” (5). The following year not much has changed. In the year IBB report is written: “the investment climate for both new rental and owner-occupied housing is considered poor in Neukölln (…) In addition to low incomes, social problems due to segregation and the increase in ‘difficult tenants’ are mentioned more frequently than average” (87). Since 2009 the district of Neukölln has been constrained under a strong gentrification pressure. The social disbalance that the IBB reports in that years, it wanted to be solved through privatization policies while blowing the living standards. For example, in 2013 an academic paper on the  stigmatization of the area of Neukölln is published by Julia Eksner. According to Eksner “accelerating wave of gentrification that has seen rent increases of up to 30% during the last couple of years in neighbourhoods that in media and public discourse are still represented as the ‘ghetto’. Given the increases in rent tied to the increased value of local housing stock, long-term low-income residents are currently moving out of the neighbourhood in masses in order to find more affordable housing in the periphery of Berlin” (Eksner, 2013: 339). This same sentiment was revealed to me during my ethnographic inquiry, in which a difference was made across the Neuköllner Schifffahrtskanal, after passing Wildenbruchplatz. Helena, my principal informant, while describing her location’s apartment does not talk about the district in general terms, but she specifically defines a corner in between the neighborhood for characterizing her home, eked by gentrification. As a matter of fact, she says “it is an interesting, small and forgotten area of Neukölln which hasn’t really changed so much through the years, which I love because Neukölln (NK) became so gentrified and so hipster like”. This relevant cut away of our interview is a highly teachable moment, as it suggests for social and cultural meanings of vacancies. 

Helena tells me about the changes that she witnesses in the other parts of the district: “The canal, they are cleaning it all up! It is used to be the corner park where all the young people and drug dealers hung out. When we would come here, we would sit down on the canal, and we would hear the  ‘NK killers kings’ which were the Turkish rappers, rehearsing underneath the bridge, it was so much fun! And now, it is just young families, hipster families. They made the park the place to have a little drink, walk your dog, and walk your baby, and complain if there is a rapper. Ya, it changed!” The corner where Helena’s house is located and where she feels at home is constructed in opposition to the rest of the district, that has been gentrified and so “denaturalized”. Simultaneously, Helena’s introduction to me of the reason why she was attracted to and chose to live in Neukölln is framed in the following way : “(it was) not so Berlin, but a mix of ‘ghetto’ like, working-class Turkish and Arabs.” This contradictory and ethnicised discourse is at the core of the popular and mainstream discussion on marginalized urban areas. The fact that Helena reappropriates and celebrates the term “ghetto” when talking about the corner where her apartment is situated, even if showing acceptance and tolerance, does underline on the process of ethnicisation of marginalization. When she talks about rappers been pushed out by gentrification, she described them in ethnical terms (as Turkish), the ethnicised “other” (Eksner, 2013: 339). The picture I drafted, of the Neukölln in 2009 from the literature and the memories of my informant’s experience, is morphing around the discourse of territorial stigmatization (Wacquant, 2008) and how gentrification zigzags through it. A specific form of gentrification that is produced by the discourse around “ghetto” and diverging on the privatization of housing policies. 

To interpret Neukölln rental housing status, it is necessary to be aware of the substantial changes in housing policy embedded into restructuring from welfare to workfare of the German system (Holm, 2006). Started in the early ‘90 (just after reunification), in its third phase in 2009, the privatization of the social housing system is justified by the crisis of public budgets. The problematic social dimension of privatization is due to the fact that “households with very limited economic resources are opposed to the high interest in revenue of the purchaser. (…) The new investors’ core business is real estate speculation, leading to a buying and selling of housing units” (Aalbers & Holm, 2008: 15). Since Berlin is dominated by rental housing, gentrification primarily takes place in the private rental sector, spurring gentrification in specific neighbourhoods (Hochstenbach, 2015: 823). In Nord-Neukölln, the term gentrification is heavily contested and policy-makers refute accusations, representing current investments as necessary to prevent ghettoization and decline. For them, it is only marginal gentrification because the “current in-moving residents are as poor themselves and having few alternatives. (…) an important justification for further investments despite apparent neighborhood changes, including steep rent increases” (Hochstenbach, 2015: 833). But what I find compelling for the cultural analysis of the rental market in Berlin is what Eksner argues that “the process of gentrification set in motion in order to create middle-class housing in the inner city required by those attracted to the capital of the New Berlin Republic is thus a central contextual determinant of the process of ghettoization (…) processes of marginalization and gentrification coexist and are mutually enabling.” (Eksner, 2013: 350). To call for observance about the discourse of territorial stigmatization in the media, institutional and public discourse means to involve the chance for an increase in the demand of small, reasonable priced apartments, but not only. As reported back then in 2008 by the IBB annual report:“the residential market can only be a real location factor for Berlin if the social mix can be additionally maintained and segregation trends effectively countered” (5). Therefore, to understand the experience of looking for an apartment in Berlin, in addition to the consideration of social demographic trends (in particular the growing number of small households, the attraction of young and creative people and internationalization) and to the socio-economic risks (in particular the increasing income – rent differentiation and ancillary costs), it is of fundamental importance to build awareness of the discourse and processes of ghettoization. 

Bibliography

Aalbers, M. & Holm, A. (2008) “Privatising social housing in Europe: The cases of Amsterdam and Berlin, Berliner Geographische Arbeiten Heft”, 110, pp. 12–23. 

Berliner Morgenpost, online (2016) “Berliner Mieten seit 2009 – Wo sich die Preise verdoppelt haben” Available at https://interaktiv.morgenpost.de/berlinmieten/ (accessed 23 January 2021)

Hollersen, Wiebke and Guido Mingels (2012), “Immobilien/ Häuserkämpfer” Der Spiegel, n. 40, Available at https://www.spiegel.de/spiegel/print/d-88861733.html / (accessed 29 November 2020)

Eksner, H. J. (2013) Revisiting the ‘ghetto’ in the New Berlin Republic: Immigrant youths, territorial stigmatisation and the devaluation of local educational capital, 1999–2010, Social Anthropology, 21(3), pp. 336–355. 

Helena, personal interview, Berlin, December 29, 2020, conducted by Valeria Farina.

Hochstenbach, C. (2015) Stakeholder Representations of Gentrification in Amsterdam and Berlin A Marginal Process? Housing Studies, 30:6, 817-838, DOI: 10.1080/02673037.2014.979770 

Investitionsbankberlin, (2008) IBB Housing Market Report, Available at https://www.stadtentwicklung.berlin.de/wohnen/wohnungsmarktbericht/pdf/berlinhousingmarket_summary_2009.pdf/ (accessed 29 November 2020)

Investitionsbankberlin, (2009) IBB Housing Market Report, Available at https://www.stadtentwicklung.berlin.de/wohnen/wohnungsmarktbericht/pdf/berlinhousingmarket_summary_2009.pdf/ (accessed 29 November 2020)

Investitionsbankberlin, (2019) IBB Housing Market Report, Available at https://www.stadtentwicklung.berlin.de/wohnen/wohnungsmarktbericht/pdf/berlinhousingmarket_summary_2009.pdf/ (accessed 29 November 2020)