taz: Ms. Eichstädt-Bohlig, the federal government wants to solve the rent problem with a construction turbo. Can that work?
Franziska Eichstädt-Bohlig: No, because that ignores the causes. The financial market-oriented housing industry is pushing rent and purchase price increases. You have to start there.
In an interview: Franziska Eichstädt-Bohlig
Born in Dresden in 1941, lives in Berlin, is an urban planner and politician (Alliance 90/The Greens) with many years of experience in urban development, housing and land policy. Co-founder and 1983–88 managing director of the alternative renovation agency Stattbau GmbH for the renovation of previously occupied houses in Berlin-Kreuzberg. 1989/90 construction councilor in Berlin-Kreuzberg. 1994–2005 member of the Bundestag, 2006–11 member of the Berlin House of Representatives.
taz: Berlin used to be considered an El Dorado for creative people with little money. Why has the situation changed so much?
Eichstädt-Bohlig: Berlin was a special case for a long time. The western part had been subsidized for a long time, rents in the east were extremely low – and the expected population increase after the capital city decision did not materialize. From 2010 onwards, rents and land prices increased sharply because a lot of capital was looking for investment opportunities after the financial crisis. So land prices and, as a result, standard land values rose rapidly. I once researched this for a property on Knobelsdorffstrasse. In 2012, a square meter of floor was valued at 550 euros, ten years later at 6,000 euros. And as a result, rents have also risen dramatically.
taz: How could this come about?
Eichstädt-Bohlig: The basis of today’s situation are political decisions. In 1990 the housing nonprofit was abolished. In the noughties, Berlin, like other states and the federal government, sold many apartments to private equity investors and private housing companies. Vonovia is now the largest in Germany with around 550,000 apartments.
taz: Such companies primarily use rental income to fill shareholders’ accounts. The Financial Turnaround Association has researched examples in which 40 percent of the income goes to the shareholders, only a quarter goes to the management of the houses. Is that legal?
Eichstädt-Bohlig: This is not just legal. Financial market-oriented companies are obliged to generate the highest possible returns. If not, they will be punished by the shareholders. Increasing prices and extracting value is their economic principle. And there is a fatal mechanism: stock corporations, funds and shadow banks have to account for the land according to market value.
taz: What’s the problem with that?
Eichstädt-Bohlig: If land prices rise, the balance sheet total increases and with it the creditworthiness of a company. This way you can buy more apartments. This no longer has anything to do with values that are compatible with the real economy. When the zero interest rate policy ended in 2022, land prices fell slightly. And because investors have since needed more money to pay off loans, the pressure on rents has increased dramatically again.
Construction kit for affordable housing: The author is very knowledgeable about everything that has to do with rents and urban development. And so the book “Property is Obliged – Why we need a land policy oriented towards the common good” (330 pages, published by Oekom-Verlag) by Franziska Eichstädt-Bohlig is a worthwhile read for everyone who wants to get involved politically and in civil society.
The architect, former construction councilor in Kreuzberg and Green member of the Bundestag not only explains how the catastrophic situation on the housing market for many people came about and also doesn’t spare her own party. Above all, it provides concrete suggestions as to what should and could now be changed at the legal and local level. She is concerned with affordable housing as well as climate and nature conservation in cities.
Many screws would have to be turned. This ranges from tax, corporate and planning law to the calculation basis for rent indexes and land values. It makes perfect sense that some issues are mentioned several times in the book, because this allows readers to specifically select certain aspects that are particularly relevant to them. Each chapter also ends with a summary: What needs to be done? A book with a high level of information and useful value. Annette Jensen
taz: How are land reference values created?
Eichstädt-Bohlig: A federal law requires that an appraisal committee compile the purchase prices for properties in an area. Then the top and bottom 30 percent are deleted. This results in the standard land value – and this is what the sellers use as a guide. According to the microcensus, financial market-oriented companies only own 15 percent of rental apartments. But their price gouging spreads like a wave across the entire market because other sellers also take their cues from it.
taz: Die Initiative Expropriate German housing wants a second referendum after the Senate failed to respond to the first. What does it mean if she is successful?
Eichstädt-Bohlig: I signed the referendum out of anger over the wrong housing policy, even though I knew from the start that expropriation would practically never work.
taz: But why not?
Eichstädt-Bohlig: Anyone who has ever had to deal with expropriation law professionally considers the project to be an illusion. The initiative’s bill seeks to finance it with over 100 years of debt repayment, which is extremely unrealistic. Organizationally, the Senate Department should be responsible for urban development, housing and construction. They would have to find out where to find the apartments, because these companies don’t manage apartments, but rather they manage subcontractors that house apartments. In its 2024 annual report, Vonovia lists around 500 subcontractors in Germany – but which subcontractor contains how many and which apartments: nobody knows.
taz: What do you suggest?
Eichstädt-Bohlig: In addition to the higher taxation of assets and the closing of numerous tax loopholes for the rich, three points are, in my view, most urgent: the strict and clear regulation of tenancy law and usury paragraphs, the limitation and reduction of land prices through a different determination of the standard land values and a changed accounting of housing companies.
taz: First things first: What would have to change in accounting law?
Eichstädt-Bohlig: Law professor Stefan Klinski has suggested that Berlin exclude financial market-based and dubious companies from the housing market. Because Berlin is formally responsible for housing, the state could require housing companies to report according to traditional German commercial law. Affordable housing requires a different rhythm of house management than financial markets; it requires long-term inventory and the combination of social responsibility and solid economic efficiency.
taz: What would a new tenancy law look like?
Eichstädt-Bohlig: You don’t have to change tenancy law in general, but you do have to specify stringent figures for the rent cap and change the calculation basis for the rent index. A 20 percent increase in rent is too much when the square meter already costs 10 to 15 euros. The absurd time-limit clauses for tight housing markets must also go. In addition, binding advice and inspections are necessary in the municipalities because people cannot defend themselves against excessive demands from landlords on their own.
taz: And what about the usury paragraph?
Eichstädt-Bohlig: Anyone who charges 20 percent more than the local comparative rent for new rentals is committing an administrative offense. Until now, the tenant has to take action himself. 50 percent rent excess is relevant under criminal law. Frankfurt am Main was the first city to use this. And in Friedrichshain-Kreuzberg, a landlady had to pay a fine of 26,000 euros for excessive rent and reimburse the tenant an additional 22,000 euros. This is the first time that a case of rent usury has been legally decided in Berlin. This must now be groundbreaking.