In some respects, Berlin is becoming the San Francisco of Europe: It has an amazing tech scene, but at the price of sky-high rents with more people unable to find affordable housing. Handelsblatt Global Editor Grace Dobush gives her scoop on the renters’ situation in Berlin and tells us how the city is working to fight against these skyrocketing prices.
“There is this clash between startups with lots of venture capital funding…moving into areas that are hip and grungy and cool and then raising rents,” explains Dobush, who notes that the increase in prices has led more people to advocate for government intervention in local urban planning. Dobush says that through a law known as Vorkaufsrecht, or the right of first purchase, the city of Berlin has the right to buy any commercial development that comes on the market in order to keep the rental pricing “at social levels.” Though there is some debate as to whether the government buying existing older building is the right strategy, Dobush says, “buying up buildings before developers can get them sends a really strong statement that Berlin is going to take a different path than San Francisco or Paris or London.”
By providing affordable housing in the heart of Berlin, Dobush notes that the city government is attempting to avoid forcing Berlin’s working class to the outskirts of the city. “Berlin has long had that mix of cultures and income levels within the central city,” says Dobush, who feels that the Berlin government needs to do more to help ease the city’s escalating problem with rent prices. “There is already a shortage of tens of thousands of apartments,” says Dobush. “So…we need to build as fast as possible.”