Europe

The Germans solving rising rents with people power

The residents of Ligsalz8
Image caption The residents of Ligsalz8 believe they have found the answer to the expensive cost of renting in Munich

Despairing of rising prices, some Germans are taking matters into their own hands to secure long-term, cheap, and stable rents.

Rents in Munich's trendy Westend district have soared in recent years. The former working-class neighbourhood, home to the city's oldest brewery, the Augustiner, has been smartened up and gentrified.

Anger at rising rents has grown, with 10,000 people taking to the streets in protest in Munich last September.

But in one building, known as Ligsalz8, rents have remained the same for 10 years - and are set to stay that way.

"In 2008, we started with rents of €7.88 per square metre and in 2018 it is still the same," York Runte, one of the tenants, told me.

And in Munich, that's cheap.

Image caption Ligsalz8's colourful decor stands out, complete with a slogan demanding an end to migrant deportations to Afghanistan

"Average rent around here is €13 per square metre, but now if you are a new tenant, you have to pay more than €17," said York.

How Ligsalz8 keeps its prices low

It's a communal property, neither owned by private landlords nor by the state.

Ligsalz8 is part of a rental housing syndicate, the Mietshäuser Syndikat, which aims to keep rents affordable and out of the hands of speculators.

There are rent controls in Munich and prices are lower than in the UK, but rents are still creeping up.

Ligsalz8 is involved in more than 100 projects throughout Germany, and has links to similar setups in the Netherlands and Austria. Aware of how high living costs are in the UK, the organisers are keen to spread the idea even further.

"We thought, what can we do to make sure that these flats never get privatised again?" said York.

How they buy their buildings

Groups of tenants create housing associations, which join with the syndicate to form private limited companies. Those companies then buy - and own - the buildings.

They are financed by direct microcredits in the form of tiny loans and crowdfunding, as well as "standard" bank loans and support from the syndicate.

The rents stay the same, even after the loans are paid off.

It's not a co-operative.

Tenants would need their own capital for that, York told me, and there is the danger that with a majority vote, the rental flats could be put on the market again.

Image caption York Runte is keen on the shared ownership model

Instead, the tenants administer the buildings themselves and make the key decisions on upkeep, renovation and rents, but the syndicate has the right to veto any proposal to re-sell the property.

"We are not start-ups, we are very solid and stable and pay off the interest on our loans on time," another tenant, Ralf Homann, said.

For residents like Ramona Pielenhofer, a young freelance designer, the model provides security.

"In Munich it is particularly hard to find affordable places to live. But compared with other flatshares I have lived in, Ligsalz8 is cheap," she told me.

Image caption Tenants share a common area to socialise in - which for many is an advantage

"And that makes many things much simpler for me, including my decision to go freelance. I became self-employed three years ago and it's a real relief to be able to live here.

"It is also really nice to be in the centre of the city. I can cycle to work and take advantage of the shops and bars and restaurants."

Ramona says her fellow tenants are like "a kind of family".

"We are all very different, we have different jobs, we are of different ages including a 20-month-old baby. But this building brings us together. We feel responsible for the house. I like it very much."

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