Housing Economics and Changing Residential Quality in Berlin

Berlin is a growing city. Almost 48,000 people permanently moved to Berlin in 2013, and the number of national and international tourists is constantly rising: 30 million tourist overnight stays are expected in over 700 tourist accommodations in 2016. This massive influx of people challenges the existing built capacities, leading to a tense housing market with increasing rents, selling prices and standard land value, especially in attractive inner-city neighborhoods. The politicization of real estate development and rent prices has produced several regulatory housing policy measures such as the increase of the land purchase tax (2014), Subpoena on the Prohibition of the Misuse of Living Space (2014), and Rent Control (2015). The development of Berlin’s real estate market into one of the most attractive capital investment markets took place at unprecedented speed: inter alia, the transformation of rental property into condominiums or the transformation of residential into commercial usages, vacancy rates have decreased to around 2 percent today. These developments have resulted in a strongly articulated demand for new (residential) constructions requesting about 20,000 additional dwelling units in Berlin.In a four-field-matrix developed elsewhere (Landau/Wellner, 2014), the variable of ‘tourist accommodations’ (TA) is being examined as influential factor on the changing residential quality in inner-city residential neighborhoods in Berlin, where tourism has an increasing impact on both economic development as well as on social cohesion. Tourism has evoked resentment and protest amongst some residents of areas that are heavily frequented by tourists. The variable TA is divided into an official or formalized accommodation segment, i.e. hotels and hostels, as well as an informal sector, i.e. privately-rented sublets or vacation rentals whose number is estimated at 12,000 in all over Berlin. The dimensions of residential quality will be differentiated into built features (location, quality of building etc.), economic (rent level, tenant mix etc.), social (neighborhood atmosphere, security, fluctuation etc.), ecological and health-related (noise, pollution etc.) aspects, thus contributing to the conceptualization of ‘residential quality’.