Berlin gentrification debate erupts over Norwegian billionaire’s investment | TBEN | 24.09.2020

0
133

Berlin residents and anti-gentrification activists unite to counter the threat of a billionaire investor to buy large swathes of real estate in the German capital.

Independent of the new rent ceiling imposed in the city, the Swedish company Heimstaden Bostad, owned by Norwegian billionaire Ivar Tollefsen, announced this week its intention to buy 130 Berlin buildings containing 3,902 apartments, 208 commercial units and 321 parking spaces for around 830 million euros. ($ 975 million).

Outrage was immediate in Berlin, a city that is in an ongoing battle with large-scale real estate investors, a severe shortage of affordable housing, and rents that are rising beyond the city’s average income means. Florian Schmidt, a local Green Party district councilor, told the Tagesspiegel newspaper that the sale was a “crisis situation” because it pushed the city’s housing market further towards “big investments led by financial markets”.

The tenants have launched a campaign calling on district authorities to use their “right of first refusal”

Tenants in some of the affected buildings have already rallied and launched a campaign calling on district authorities to use their “right of first refusal”, ie the ability to allow state-owned enterprises to buy. properties when they are put up for sale. in areas subject to special protection.

But it’s not that easy, as District Councilor Ephraim Gothe told TBEN. Two of the buildings Heimstaden Bostad wants to buy are in his neighborhood of Mitte, but neither are in the designated protected areas. Green Party adviser Jochen Biedermann added that the results of the right of first refusal assessments “could only very rarely be predicted”.

Part of this, he says, is because the buyer can always get around a first refusal by signing a “bypass agreement,” a kind of pledge to protect tenants’ rights and follow local regulations. Heimstaden has yet to sign such a pledge, although the company has said it will uphold all local tenant protections.

ALSO READ  Italian and Croatian governments criticize anti-corona protests | TBEN | 05.09.2020

Read more: Latest orders for a Berlin bar at the center of the rent war

A checkered company

Heimstaden Bostad insists that he has a “customer-centric business model”.

“Heimstaden and its long-time owners have an ever-renewed vision, we never buy for resell,” CEO Patrik Hall told TBEN in an email. “Rather, we invest in our properties and communities and want to work with tenants, politicians and communities to deliver friendly and sustainable homes and neighborhoods to the Berlin market.

He also insisted that Berlin’s rental restrictions did not deter the company. “We believe that regulations are a fundamental part of a good housing market,” Hall wrote. “We entered the German market for the first time in 2018 and see this portfolio as a good opportunity to strengthen our presence and establish our own internal operations in Berlin.”

Ivar tollefsen

Ivar Tollefsen, the billionaire behind Heimstaden, has a series of adventures, having taken part in the Dakar rally and leading expeditions to Antarctica

But many tenants are suspicious, despite the company’s assurances. “These are just words, these are not things we can hang on to,” said Jagna Anderson of tenant initiative Fünf Häuser (“Five Houses”), who is already busy running demos and hopes strengthen its alliance by seeking residents of some of the other affected buildings (only 16 of the addresses Heimstaden intends to buy in Berlin are known).

ALSO READ  Women in Germany feel unsafe in large cities, study shows | TBEN | 12.08.2020

“We have heard stories from friends and acquaintances in Malmö and Oslo that this owner does not always act properly, does not maintain the buildings properly,” Anderson told TBEN. “But these are just worries, and they would be partially alleviated if the buyer signed the cancellation agreement.”

Heimstaden said he was in contact with district officials and would assess any deal on merit. “If a district in the city of Berlin sends us a cancellation agreement, we check it for each case individually. A decision will then be made,” spokesman Bernd Arts told TBEN in an email.

Councilor Gothe can certainly understand the concerns of tenants, mainly because the company has shown in the past how profit-oriented it is. “We have had the experience with Heimstaden that when a tenant moves out, they immediately renovate as quickly as possible and sell the apartment if they can,” he told TBEN.

There are indications that Heimstaden may be prepared to circumvent local regulations for profit. Last week, an Oslo court ruled that the company had failed to properly report five real estate deals that authorities should have been able to intervene in, and said the company should now resell the buildings – at rates in effect in 2014-2016, when sales were made.

Read more: Comparison of the rent freeze in Berlin around the world

Berlin: always a good investment

Either way, the sale shows that real estate in Berlin remains an attractive investment, despite the city’s leftist government and its recent five-year “rent freeze”. But then, rent regulation has its limits.

“It is clear that large investors are not deterred by the rent cap from making a profit here,” Wibke Werner of the Berlin Tenants Association told TBEN. “The assumption is that they will wait until the five years of the rent cap to make their profits then.”

Gothe also concluded that companies like Heimstaden are now making their big investments assuming the rent cap will be overturned in court. “I’m pretty sure that’s their calculation,” he said.

“What this tells us is that we need to discuss how things will continue after the rent cap expires,” Werner said.

The way landlords have reacted to Berlin’s rent ceiling so far has caused great insecurity among people trying to find accommodation to rent. It has become common now for landlords to put two separate rent prices on their listings: the actual rent and a higher “notional rent” that would be payable retroactively if the German Constitutional Court canceled the rent ceiling. Tenants are encouraged to save the difference if the rent suddenly increases in the future.

Wibke Werner said the Berlin Tenants Association considers these fictitious rents to be illegal, stressing that the rent cap is currently applicable law and is working on a legal challenge to them.

For Anderson, meanwhile, the problem is allowing large investors to enter the housing market in the first place: “There’s just always a fundamental conflict of interest between the commitments of a stock company. to make profits for shareholders and the needs of tenants, who just want an affordable home and be left alone. “

.