2020-11-12 | New construction instead of regulation – How do we get more apartments in Berlin?
14th Live Event | Meet the Expert
New construction instead of regulation – How do we get more apartments in Berlin?
Subject: Our 14th Berlin Real Estate Talk revolves around the subject of examination, planning, implementation and defence of construction in Berlin. The demand for living space in Berlin is currently much greater than the supply. More living space can only be created through new construction, and a wider range can relieve the market. What is the situation in Berlin right now? For example, does the rent cap influence the construction of rental apartments? Berlin does have enough space since the city could still be denser in many places.
Expert: Lawyer Dr. Mathias Hellriegel LL.M.
Dr. Mathias Hellriegel is a Berlin-based lawyer and a certified specialist for administrative law. For years, The JUVE Handbook of Commercial Law Firms has described him as a “leading partner in environmental and planning law (under the age of 50)”.
According to the “Handelsblatt”’s Best Lawyers Ranking, he is one of the best lawyers in Germany in public commercial law and “WirtschaftsWoche” also lists him as a TOP lawyer for environmental and building planning law. Since 2011 he has regularly published articles in the “Immobilien Zeitung”.
You can find more information at: https://www.hellriegel-rechtsanwaelte.com/en
Solution approaches in the Real estate industry
The consensus in the Real estate industry is that price regulation measures such as the rent cap will only lead to an increase in demand and, in case of doubt, even to a reduction in supply if the supply remains the same, since landlords will no longer rent but sell. Then there is the economic discussion of whether it is enough to simply increase supply and the new additional expensive apartment will set in motion a trickle-down effect in which the new occupant of that expensive apartment will free up another cheaper apartment. Case law supports this line of thinking in many decisions.
I think building alone is not enough. We have to build in a special way and create the right supply. That’s why we have the cooperative building land models, which stipulate that not only condominiums are created in new construction, but also a certain proportion of social housing.
Why are open spaces not being used for construction?
One problem is the lack of building land mobilization, or rather the lack of activation of building land. This is a political problem, but also an internal one for the real estate industry because it’s also partly due to the fact that the current building law is not always implemented. Although here again the solution lies in the city of Berlin activating more building land and thus lowering prices.