Berlin residents are worried that billionaire property developer Ivar Tollefsen is buying up thousands of apartments. His company Heimstaden claims it will work with the community, but won’t sign a pledge saying so.
Read it in Deutsche Welle
Berlin residents and anti-gentrification campaigners are banding together to counter the threat of a billionaire investor buying up vast tracts of real estate in the German capital.
Undaunted by the newly enforced rent cap in the city, Swedish company Heimstaden Bostad, owned by Norwegian billionaire Ivar Tollefsen, announced this week that it intends to buy 130 Berlin buildings containing 3,902 apartments, 208 commercial units and 321 parking spaces for around €830 million ($975 million).
The outrage was immediate in Berlin, a city that is in an ongoing battle with large-scale property investors, an acute shortage of affordable housing, and rents that are growing beyond the means of the city’s average income earners. Florian Schmidt, a local district Green party councilor, told the Tagesspiegel newspaper that the sale was a “crisis situation,” because it pushed the city’s housing market further towards “big investments steered by the financial markets.”
Tenants in some of the affected buildings have already clubbed together and launched a campaign calling for district authorities to make use of their “right of first refusal” — that is, the option to allow state-operated companies to buy properties when they go on sale in areas put under special protection.
But that is not so easy, as district councilor Ephraim Gothe told DW. Two of the buildings that Heimstaden Bostad wants to buy are in his district of Mitte, but neither is in the designated protected areas. Green party councilor Jochen Biedermann added that the outcomes of the right of first refusal assessments “could only very rarely be predicted.”
That, he said, is partly because the buyer can always get around a first-refusal by signing an “avoidance agreement,” a kind of commitment to protecting the rights of tenants and adhering to local regulations. Heimstaden has not yet signed such a pledge, though the company has said it will abide by all local tenants’ protections.
Heimstaden Bostad insists it has a “customer-centered business model.”
“Heimstaden and its long-term owners have an evergreen vision, we never buy to resell,” CEO Patrik Hall told DW in an email. “On the contrary, we invest in our properties and the communities and want to work together with tenants, political stakeholders, and the communities in delivering friendly and sustainable homes and neighborhoods in the Berlin market.”
He also insisted that Berlin’s rent restrictions did not deter the company. “We think regulations are an important fundament for a good housing market,” Hall wrote. “We first entered the German market in 2018 and see this portfolio as a good opportunity to scale up our presence and establish our own, in-house operations in Berlin.”
But many tenants are suspicious, despite the company’s assurances. “These are just words, they’re not something we can hold on to,” said Jagna Anderson of the tenants’ initiative Fünf Häuser (“Five Houses”), which is already busy organizing demos and hoping to strengthen its alliance by seeking out residents of some of the other buildings affected (only 16 of the addresses Heimstaden intends to buy in Berlin are known).
“We’ve heard stories from friends and acquaintances in Malmö and Oslo that this landlord doesn’t always act correctly, doesn’t maintain buildings properly,” Anderson told DW. “But these are just worries, and they would be partially allayed if the buyer were to sign the avoidance agreement.”
Heimstaden said that it was in contact with district authorities and would assess any agreement on merit. “If one district of the city of Berlin sends to us an avoidance agreement, we then check it for each case individually. A decision will then be taken,” spokesman Bernd Arts told DW in an email.
Councilor Gothe can certainly understand tenants’ concerns, mainly because the company has shown in the past how profit-oriented it is. “We’ve 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 DW.
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 property deals that the authorities should have been able to intervene in, and said the company should now sell the buildings back – at the going rates in 2014-2016, when the sales were made.
In any case, the sale shows Berlin property remains an attractive investment, despite the city’s left-wing government and its recently introduced a five-year “rent freeze.” But then, the rent regulation has its limitations.
“Clearly big investors aren’t deterred by the rent cap to make a profit here,” Wibke Werner of the Berlin Tenants’ Association told DW. “The assumption is that they’re going to wait out the five years of the rent cap in order to make their profits then.”
Gothe also concluded that companies like Heimstaden were making their big investments now on the assumption that the rent cap would 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,” said Werner.
The way landlords have reacted to Berlin’s rent cap so far has caused much insecurity among people trying to find somewhere to rent. It’s become routine now for landlords to list two separate rent prices on their ads: the actual rent and a higher “shadow rent” which would be payable retroactively if Germany’s constitutional court were to overturn the rent cap. Tenants are being advised to save up the difference should the rent suddenly be hiked in the future.
Wibke Werner says the Berlin Tenants’ Association considers these shadow rents unlawful, pointing out that the rent cap is the currently applicable law, and was working on a legal challenge to them.
For Anderson, meanwhile, the problem is allowing major investors to enter the housing market in the first place: “There’s just always a basic conflict of interests between the commitments of a share-oriented company to make profits for the shareholders and the needs of tenants, who just want an affordable home and to be left alone.”
Berlin gentrification debate flares over Norwegian billionaire’s investment
Berlin residents are worried that billionaire property developer Ivar Tollefsen is buying up thousands of apartments. His company Heimstaden claims it will work with the community, but won’t sign a pledge saying so.
Read it in Deutsche Welle
Berlin residents and anti-gentrification campaigners are banding together to counter the threat of a billionaire investor buying up vast tracts of real estate in the German capital.
Undaunted by the newly enforced rent cap in the city, Swedish company Heimstaden Bostad, owned by Norwegian billionaire Ivar Tollefsen, announced this week that it intends to buy 130 Berlin buildings containing 3,902 apartments, 208 commercial units and 321 parking spaces for around €830 million ($975 million).
The outrage was immediate in Berlin, a city that is in an ongoing battle with large-scale property investors, an acute shortage of affordable housing, and rents that are growing beyond the means of the city’s average income earners. Florian Schmidt, a local district Green party councilor, told the Tagesspiegel newspaper that the sale was a “crisis situation,” because it pushed the city’s housing market further towards “big investments steered by the financial markets.”
Tenants in some of the affected buildings have already clubbed together and launched a campaign calling for district authorities to make use of their “right of first refusal” — that is, the option to allow state-operated companies to buy properties when they go on sale in areas put under special protection.
But that is not so easy, as district councilor Ephraim Gothe told DW. Two of the buildings that Heimstaden Bostad wants to buy are in his district of Mitte, but neither is in the designated protected areas. Green party councilor Jochen Biedermann added that the outcomes of the right of first refusal assessments “could only very rarely be predicted.”
That, he said, is partly because the buyer can always get around a first-refusal by signing an “avoidance agreement,” a kind of commitment to protecting the rights of tenants and adhering to local regulations. Heimstaden has not yet signed such a pledge, though the company has said it will abide by all local tenants’ protections.
Heimstaden Bostad insists it has a “customer-centered business model.”
“Heimstaden and its long-term owners have an evergreen vision, we never buy to resell,” CEO Patrik Hall told DW in an email. “On the contrary, we invest in our properties and the communities and want to work together with tenants, political stakeholders, and the communities in delivering friendly and sustainable homes and neighborhoods in the Berlin market.”
He also insisted that Berlin’s rent restrictions did not deter the company. “We think regulations are an important fundament for a good housing market,” Hall wrote. “We first entered the German market in 2018 and see this portfolio as a good opportunity to scale up our presence and establish our own, in-house operations in Berlin.”
But many tenants are suspicious, despite the company’s assurances. “These are just words, they’re not something we can hold on to,” said Jagna Anderson of the tenants’ initiative Fünf Häuser (“Five Houses”), which is already busy organizing demos and hoping to strengthen its alliance by seeking out residents of some of the other buildings affected (only 16 of the addresses Heimstaden intends to buy in Berlin are known).
“We’ve heard stories from friends and acquaintances in Malmö and Oslo that this landlord doesn’t always act correctly, doesn’t maintain buildings properly,” Anderson told DW. “But these are just worries, and they would be partially allayed if the buyer were to sign the avoidance agreement.”
Heimstaden said that it was in contact with district authorities and would assess any agreement on merit. “If one district of the city of Berlin sends to us an avoidance agreement, we then check it for each case individually. A decision will then be taken,” spokesman Bernd Arts told DW in an email.
Councilor Gothe can certainly understand tenants’ concerns, mainly because the company has shown in the past how profit-oriented it is. “We’ve 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 DW.
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 property deals that the authorities should have been able to intervene in, and said the company should now sell the buildings back – at the going rates in 2014-2016, when the sales were made.
In any case, the sale shows Berlin property remains an attractive investment, despite the city’s left-wing government and its recently introduced a five-year “rent freeze.” But then, the rent regulation has its limitations.
“Clearly big investors aren’t deterred by the rent cap to make a profit here,” Wibke Werner of the Berlin Tenants’ Association told DW. “The assumption is that they’re going to wait out the five years of the rent cap in order to make their profits then.”
Gothe also concluded that companies like Heimstaden were making their big investments now on the assumption that the rent cap would 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,” said Werner.
The way landlords have reacted to Berlin’s rent cap so far has caused much insecurity among people trying to find somewhere to rent. It’s become routine now for landlords to list two separate rent prices on their ads: the actual rent and a higher “shadow rent” which would be payable retroactively if Germany’s constitutional court were to overturn the rent cap. Tenants are being advised to save up the difference should the rent suddenly be hiked in the future.
Wibke Werner says the Berlin Tenants’ Association considers these shadow rents unlawful, pointing out that the rent cap is the currently applicable law, and was working on a legal challenge to them.
For Anderson, meanwhile, the problem is allowing major investors to enter the housing market in the first place: “There’s just always a basic conflict of interests between the commitments of a share-oriented company to make profits for the shareholders and the needs of tenants, who just want an affordable home and to be left alone.”
