“Suddenly, they were all here. All these students, artists, layabouts. The complete mob called creative class[…] and suddenly all was changing. The rents were no longer cheap, the drug dealers left the Reuterplatz, whorehouses closed, instead we got open-minded and open-gendered[sic] galleries, junk dealer became to dealer in antiques, and dirty dog shit was turned into peaceful baby buggies. More general this phenomenon is called gentrification”1.
These words are taken from the so-called “video manifesto” of one Mathias Merkle, a disgruntled Neukölln bar owner who blames the recent influx of students and ex-pats for the rapid changes occurring in his beloved borough. This point of view is not an uncommon one in Berlin. Merkle’s 10 minute, broken-English rant went viral in Germany last year and he has become something of a self styled anti-hero for the hipster-averse Berlin purists who want to stem the tide of young, affluent creatives who are supposedly ruining the ‘old Berlin’, whatever that is. Recently The Guardian ran an article with the headline “Berlin’s housing bubble and the backlash against hipster tourists”2. Reuters wrote that “some blame the tourists, especially the young 20-something ‘Easyjet set’ who ride the budget airline to party through the night in the uber-cool, hedonistic German capital, for a host of ills from rising rents to noise pollution”3. Der Spiegel published a number of articles on the topic, saying that “in the last few years, Berlin’s gritty Neukölln district has become a hotbed of the creative class and nightlife, attracting students, artists and bourgeois bohemians. But some worry that the neighborhood is changing too quickly and that locals are being pushed out”4. Even when I spoke to my friend who herself is an American Student living in Neukölln, she cited the abnormally high percentage of ex-pats as a primary cause of gentrification in the area.
It seems then that this is not just the crackpot conspiracy theory of a few fringe anarchists, but rather it is a widely held belief amongst many in Berlin: rich young hipsters are driving up the rents and driving out the poor.
Hearing all of this I can’t help but wonder if people aren’t confusing correlation and causation. You look out your window and see a bunch of ostentatious hipsters walking around, you look at your bills and find that you can’t afford your rent, it’s not so unreasonable to assume the two must be connected somehow. Admittedly, as an American student living in Berlin I can say that we are an easy target: we are loud, we travel in groups, we don’t speak German, we fall head over heels into just about every stereotype you can think of. It’s not so hard to see why we would make excellent scapegoats for a whole host of systemic problems, but I wonder if perhaps there isn’t some more nuanced explanation for the rising rents and widespread displacement in Neukölln’s northern neighborhoods. Gentrification after all is a very complicated subject, situated as it is at the intersection of politics, economics, culture, and identity. Like most social phenomena, it defies simple description or easy illumination, and it so rarely has a single clearly defined cause. It obviously feels very satisfying to throw your weight behind a catchy slogan like “no entry for hipsters” or “noisy tourists go home”, but if you want to devise a meaningful solution to a complex problem it behooves you to approach that problem with more than just emotion, but also with self-awareness and intellectual rigor.
Is Neukölln Gentrifying?
In that spirit, my first step in interrogating this question was to establish that north Neukölln is indeed experiencing gentrification. I don’t want to take anything for granted. Now obviously, it’s a hard phenomenon to pin down but I found a few indicators that I think provide some insight. First, I found that over the past 5 years north Neukölln has seen an abnormally high rate of increase in both median household income and median rent prices5 6 7 8 9.This alone of course is not enough to imply gentrification because it does not prove that displacement has occurred, without which you only have urban upgrade or urban renewal. I also found however, that the area has above average total migration10 and a very low population with at least 5 years residency compared to surrounding areas (Figure 1). What this information tells us is that in the northern neighborhoods of Neukölln, the rents are getting higher, the people are becoming more affluent, many people have been moving in, many people have been moving out, and more than half of the population has moved in in the last 5 years. All of these indicators taken together suggest pretty strongly that the improvement and displacement characteristic of gentrification are indeed occurring.
One rather striking coincidence that I noticed very early on is that the neighborhoods where my gentrification statistics seemed to be the most pronounced also
happened to be home to all nine of Neukölln’s Quartiersmanagement Areas (Figure 2 and Figure 3). The Quartiersmanagement Areas are designated by the Senate Department for Urban Development, and the program was intended to target and revitalize “socially disadvantaged” neighborhoods suffering from increasing pauperization, ethnic tensions, poor socio-demographic indicators, and systemic neglect of public infrastructure
Bottom-Up Sources of Gentrification
I set out to see if this agglomeration of Quartiersmanagement Areas and gentrification indicators held any significance, so I sat down with Daniella Fleig, a member of the Quartiersmanagement Council for the Flughafenstraße area.
“The target is to activate the population to identify more with the quarter, to help each other, and also to initiate projects to improve their situation” says Fleig who stresses the essentially bottom-up nature of the program11. The council awards small amounts of money (usually less than 1000€) to community initiated projects that are submitted by residents. These projects have involved community gardens, gathering supplies for the local school, initiatives to clean up parks and public squares, and vocational classes for migrants and other residents.
The Flughafenstraße, like many neighborhoods in this part of Neukölln suffers from rampant poverty, deeply engrained ethnic tensions, and high crime rates. Fleig talks about illegal prostitution flourishing in the back rooms of dilapidated tenements, opposing gangs of Lebanese immigrants clashing violently in the streets, she discusses her own experiences with petty crime in the area, and the trash and graffiti that accumulate at local parks, she laments that children in the area lack opportunities that their counterparts in wealthier neighborhoods take for granted.
Just walking around its easy to see the impact that the Quartiersmanagement Program has had on this so-called “social hotspot”. In the platz in front of the local school where recent improvement efforts have been focused I saw a sign erected by volunteers proclaiming that “We ‘kehr’ for the square”, I walked through a community garden planted with the help of Quartiersmanagement funds, and talking to people on the streets, many can attest that their lives have been directly impacted by the program.
Bottom up projects like the Quartiersmanagement Program have empowered citizens in these neighborhoods to actively improve their surroundings, which has made them nicer places to live. One of the unintended consequences of this development has been an increase in rents, and ultimately gentrification, “maybe we are gentrifiers,” says Fleig who acknowledges this secondary effect, “but what is the alternative? We must improve the area for all people, and maybe the consequence is that the rents go higher”.
She also believes that perhaps poor public policy is to blame as well, “maybe we need to hold the government responsible, because they have instruments to influence it so that people can stay here, so that the rents don’t get too high”. She decries the loss of social housing (Sozialer Wohnungsbau) in the area which she says has been all but eliminated in Neukölln as well as other parts of the city.
The Policy Dimension
Indeed the move in urban governance away from rent controls and careful urban renewal is part of a larger trend in Berlin’s urban governance which dates all the way back to the 1990’s.
In the late 90’s, public housing accounted for nearly 30% of all the housing stock in Berlin. Today it accounts for around 13%. Over 200,000 publicly owned housing units have been sold by the city since 199012. This housing stock was privatized mainly as an attempt to deal with skyrocketing public debt which in the early 2000’s had run to approximately 50 billion Euros. Ironically, privatizing public housing “had only a very small effect on the public budget”12. The city has only raised about 4 billion Euro since 1990 by selling off publicly owned housing units, so it appears to be a wholly symbolic gesture. It seems to me like a perfect example of what David Harvey once described as a shift away from a managerial style of urban governance; that is city governments shying away from providing services directly to citizens in favor of more market based approaches13. Indeed this privatization coincided with a larger neoliberal tendency which overtook much of the western world in the 1990’s and early 2000’s and which strongly encouraged a “let the market solve” mantra.
Because nearly 58% of the public housing was sold to financial investors, such as private equity funds12, this privatization initiative represented a huge redistribution of housing stock into the hands of developers and speculators. It is quite comparable to what happened in Prenzlauer Berg immediately following reunification when dilapidated apartments were returned to “original owners”, owners who almost universally resold their newly acquired properties to predatory developers at artificially low prices. Prenzlauer Berg today of course is the poster child for gentrification, and many believe that poor privatization policy is part of the reason why.
This systematic movement of housing stock to private equity and the high indirect subsidies (a.k.a. tax breaks) given to developers by the government have artificially created demand for development in areas that otherwise wouldn’t be very enticing. Mathias Bernt says that “neighborhood change did not happen as a structural result of anonymous market forces, but as an outcome of changes in public policy”14. The city created conditions under which gentrification could flourish, which in and of itself isn’t necessarily a problem.
In the past, the city has used subsidies and incentives to affect urban renewal in blighted neighborhoods, but the presence or absence of strict rent controls makes all the difference. In the 90’s when nearly 60% of all renewal work was directly funded by public programs, land lords were tied to strict rental obligations which kept gentrification in check while allowing for robust urban regeneration. Eventually, direct funding gave way to tax incentives which also retained some semblance of conditional rent controls though “in the long run it proved to be a step back towards much weaker forms of regulation”14. It became increasingly easy for landlords to game the system and exploit weakness in the regulation. In the early 2000’s largely due to budgetary crises, the city opted to more or less abandon intervention into the housing market. In this new paradigm, “careful planning with expanded community participation was replaced by an individualized affirmation of interests”15. Developers and land owners who before could achieve satisfactory return on investment even with low rents, thanks to subsidies, were incentivized to increase rents and prioritize profit. Furthermore, the shift in regulatory policy allowed them to raise rents at alarming rates. The city enticed predatory institutions into the neighborhood and then removed the policies designed to keep those institutions in check.
I spoke with one man on the street in Neukölln who had been living for years in an apartment where the rents had been kept stable in order to protect the diversity of its residents. In recent years however, the rents had increased exponentially and he had been forced to move to a less expensive apartment on the outskirts of the district. He said that he still felt a strong connection to his old neighborhood despite that fact he can no longer afford to live there.
“People are always talking about improvement causing gentrification” says Fleig, “but gentrification may be a consequence of not having the proper laws in place. Not just in Neukölln, but everywhere”.
“Tourists Go Home”
While my investigation has not exactly yielded any finalized conclusions, it has confirmed my suspicion that gentrification is not as simple as it may at first appear. To simply chalk it up to too many noisy hipsters is unfair, and ignores the very real forces at work influencing urban development. On the one hand gentrification and displacement are very much a result of poor public policy and many who are angry that their neighborhoods are changing for the worse have more of a reason to look to the Senat than to the foreigners pouring out of Berghain. On the other hand, the rapid renewal of blighted neighborhoods which is a catalyst for gentrification, in many cases arises directly from communities that have mobilized to improve their surroundings. In these cases the changes are very much bottom-up, initiated by and directly benefitting residents. So while it is easy to simply demonize the forces of gentrification, its hard for me to cast aspersions when I walk through a garden lovingly planted by hand and I see how proud people are of it. It’s hard for me to cast aspersions when I see empowered communities working to improve their lives and their living conditions. It’s hard for me to cast aspersions when I see cleaner, safer neighborhoods and happier, more productive people. The issue of urban renewal is obviously one fraught with ethical dilemmas and complicated questions.
At the end of the day, it’s simply not productive to blame one small group of individuals for a problem that has deeply entrenched and far reaching origins. As Fleig so astutely put it, “I don’t think its fair, and I think this is a very dangerous discussion. To be honest, as a German we had some years ago big trouble with excluding people from our society and I think we need to be very careful. Wherever you come from, I am glad you are here, that’s what makes Berlin what it is, the constant change of people, of creatives, of foreigners, all looking for something special here. I think its part of the atmosphere and I am personally very proud of it.”
*Darius Rafieyan is a student at NYU Berlin
1. Offending The Clientele. Mathias Merkle. Retsina Film.
2. Hung, Jochen. “Berlin’s housing bubble and the backlash against hipster tourists.” The Guardian. 18 Sept. 2012.
3. Duvernoy, Sophie. “Tourist-bashing turns ugly in Berlin.” Reuters. 17 Sept. 2012.
4. Mendoza, Moises. “Foreigners Feel Accused in Berlin Gentrification Row.” Der Spiegel. 3 Nov. 2011.
5. GSW Housing Market Report. Rep. Berlin: GSW Immobilien AG, 2008.
6. GSW Housing Market Report. Rep. Berlin: GSW Immobilien AG, 2009.
7. GSW Housing Market Report. Rep. Berlin: GSW Immobilien AG, 2010.
8. GSW Housing Market Report. Rep. Berlin: GSW Immobilien AG, 2011.
9. GSW Housing Market Report. Rep. Berlin: GSW Immobilien AG, 2012.
10. FIS Broker .
11. Personal Interview with Daniela Fleig (used throughout). 13 Dec. 2012.
12. Aalbers, Manuel B., and Andrej Holm. “Privatising Social Housing in Europe: The Cases of Amsterdam and Berlin.” Berliner Geographische Arbeiten Heft. Vol. 12, No. 23 (2008).
13. Harvey, David. “From Managerialism to Entrepreneurialism: The Transformation in Urban Governance in Late Capitalism.” Geografiska Annaler. Series B, Human Geography. Vol. 71, No. 1 (1989).
14. Bernt, Mathias. “The ‘Double Movements’ of Neighborhood Change: Gentrification and Public Policy in Harlem and Prenzlauer Berg.” Urban Studies. Vol. 1, No. 18 (2012).
15. Holm, Andrej. “Urban Renewal and The End of Social Housing: The Roll out of Neoliberalism in East Berlin’s Prenzlauer Berg.” Social Justice. Vol. 33, No. 3 (2006).