Author: Dr. Wolfgang Sachsenroeder

With the rental price brake/ cap in Berlin, decades of controversial debates about affordable housing and rents in Germany have for the first time conspired to make a political decision.

Rental and luxury refurbishment of existing real estate, gentrification of prime city center locations and suburban districts suddenly awakening from the slumber of their sleeping beauty have always excited the mind. Squatting and the evacuation by often huge police forces made headlines, violence and counter-violence have often enough by far exceeded the legally acceptable maximum, but the use of force with more or less clear anarchist undertones was limited to certain districts and milieus. At least in Germany angry residents became more likely to participate in clearly defined projects, such as Stuttgart 21 or city highway projects, and the like. The outbreaks of violence at the Hamburg G20 summit in 2017, on the other hand, were a first major issue for politicians whose work is still far from over. For the first time, they refuted Lenin’s mockery of the fact that the Germans first disassembled a platform ticket before storming a train station. Just as there are no longer any platform tickets, you will be able to count on the state of piety and peacefulness of the German Michel only conditionally, even if Pegida and similar demonstrations often quietly sanded.

If the Berlin rent-price brake, as many experts predict, will not alleviate the housing shortage in Berlin, but rather increase it, the question arises as to the potential for protest and its possible sustainability. The media is likely to increase their potential by absorbing depressing stories of retirees who can no longer afford their increased rent but who are struggling to move from their usual neighborhood to cheaper locations. Naturally, solidarity comes primarily from the neighborhood, less from the expensive top locations. But the theme is also ideal for politicization, for peaceful demonstrations, but also for out-of-control orgy with danger to life for the police officers deployed.

The more and more often appearing posters that housing is a human right, whether it is a socialist dream or not, raises the question of how far housing shortages can or may be a catalyst for political dissatisfaction, protest or violence. A look over the borders may provide some clues.

For example, comparing the housing situation in Hong Kong and Singapore, part of the violence that is now raging in Hong Kong’s fifth month becomes more understandable. Housing had always been in short supply in the British Crown Colony until its return to China in 1997, as a steady flow of refugees from the socialist shortages in the People’s Republic seeped into prosperous Hong Kong. Housing was not a joint task of urban policy, but a terrific speculative bubble and created the largest assets in the real estate sector. Housing is therefore one of the root causes of dissatisfaction for today’s predominantly youthful protesters. For a tiny shared room, repeatedly described as a „cell“, an average of 7,000 Hong Kong dollars are required, about € 800, whole apartments are therefore prohibitively expensive for the majority of 7.4 million inhabitants. The demonstrations, which were initially directed against a law on the extraditation of criminals to China, caused the housing issue a massive accelerator of fire and in part also developed in a direction that goes against the existing political restrictions in the Hong Kong Special Economic Zone and in the West as a fight for democracy and freedom are interpreted, but only a part of the problem situation.

In contrast to Hong Kong, Singapore’s housing supply is downright socialist in the most positive sense. The ownership rate is a whopping 91%, most of it in housing blocks of the Housing & Development Board (HDB), a parastatal society that can safely be called charitable. The houses are assembled serially from prefabricated parts, but are not comparable with the DDR-Plattenbau, which should have been a model in the early 1960s, and of high quality. The offer is so diverse and affordable with first-time grants that young couples can move into their own home at the wedding. With the high level of ownership and entry-level prices, Singapore’s housing supply has been an ingenious political move by the founding fathers of Lee Kuan Yew, who has become a major factor in the social stability of the city-state, which otherwise bears many similarities with Hong Kong. The basic capitalist structure, which is also flourishing unhindered in the segment of luxury real estate, has been joined by a socio-political correction in housing construction, leaving considerably less room for protest potential than in Hong Kong.

An international comparison of property quotas may also be interesting for Germany. In Europe, we came in second with 51.4%, but bottomed out ahead of rich Switzerland with 41.3% (Statista 2017). The leader is just the less affluent Romania with 96.8%, which was probably due to the direct conversion of socialist housing into the property of the tenants was possible. But Switzerland is of particular interest in a very different perspective. Despite a constant increase in single-households and second homes, there has been an astonishing vacancy of real estate in recent years, according to the Neue Zürcher Zeitung of October 24, 63,000 rental apartments and 12,000 uninhabited condominiums and single-family homes. As a result, apartment rents are expected to fall by 0.6% this year and by another 0.9% in 2020. In Munich, Stuttgart or Berlin, no one is likely to dream of falling rents, even if the Berlin Senate is thinking of forcibly lowering rents in favor of tenants.

The comparisons seem to indicate that there is a connection between a satisfactory policy for citizens with sufficient public services and livelihood and, on the other hand, their neglect with the result of dissatisfaction and increasing conflict potential. To this end, former CIA analyst Martin Gurri published in December 2018 a book with rather worrying theses, „The Revolt of the Public and the Crisis of Authority in the New Millennium“. At the center of his analysis is the public revolution through the Internet and social media, which has virtually marginalized the monopoly of political and economic elites. Simultaneously, the possibilities for self-organization and mobilization of citizens‘ initiatives with the widest range of motivation and political thrust were made possible and immediately multiplied. While print media and television are becoming less and less consumed and taken seriously, especially in the younger generation, the potential for disinformation and the influence of largely uncontrollable interest groups is growing at the same time. It becomes more confusing, complex and at the same time menacingly irrational. The protest movements in Hong Kong, Chile, France, Indonesia and many other hot spots indicate that governance in many countries is not only problematic, but could become an unsolvable task. Even in affluent countries, governments are increasingly caught up in the expectations they have fueled in the election campaigns and then implement them little or too slowly. Housing policy, if it bypasses the needs of easily networked groups, can become a catalyst with the force of an accelerator. Hopefully not in times of rental price brake/ cap (Mietendeckel) in German cities.