(289) Berlin

745px-BerlinBerlin should have Straßen mit Gold gepflasterte.  It is a major city-state by any standard: 3.5 million people in 900 square kilometers with an economic output of about 100 billion Euros.  The city is renowned for its universities, green spaces, public transit, cultural and business life.  It is also much poorer than Germany as a whole.

Spiegel Online International published a brutal piece on Thursday about the slum housing industry in Germany’s capital.  This is a true industry, the large-scale undertaking of rental brokers and property owners to exploit the social difficulty of newcomers and the poor.  Truly hazardous nineteenth century dilapidation and exploitation is visited upon Roma, and other vulnerable people, to the profit of businesses registered outside of Germany.  The authors describe a lack of heat, toilets that don’t work and rents that have skyrocketed.  Those among Europe’s worst off people don’t complain, or cannot complain, indeed, seem not to even know they have the right to complain. “…conditions on some of the floors at Scharnweberstrasse 111 are like those in a refugee camp, with multiple parties sharing the few intact bathrooms,” say the authors.

Scharnweberstrasse 111 is cited as an example of a business model involving some 6,000 apartments and numerous players.  It is a low-rise residential building located barely one kilometer from the end of the runways at Tegel airport.  You can see it for yourself via Google Street View.  A mysterious German said to be abusing social welfare is described as having been the agent for a firm called Helvetica which has partners in the Middle East, Asia and the UK, exemplifying Berlin’s lucrative, internationally-based real estate industry.  Cash rents are funnelled upwards to the partners via Helvetica and a brace of holding companies after a handsome premium is deducted by the broker.  Claims are made as to the social value of housing the Roma, the homeless, the mentally ill, displaced youth and ex-convicts.  But this is true suburban poverty partly facilitated by a sell-off of publically held apartment buildings by a city government under financial stress.  In Berlin, a dynamic real estate and property development market exists alongside socio-economic difficulty with results that are not pretty.

Where this particular mess will be in twenty-five years defies positive imagination.

Real Estate Locusts: Developers Cash in on Europe’s Poorest

Increasing Returns: Berlin’s Poor Collect Bottles to Make Ends Meet