Housing Policy Hinders Essential Renovations: Association Labels Milieu Protection Rules as 'Investment Barrier'

The Berlin housing industry is expressing concern that restrictions imposed on landlords in designated milieu protection areas are becoming a significant barrier to investment. According to the Berlin-Brandenburg Association of Housing Companies (BBU), essential renovations and energy-efficient upgrades are frequently delayed or denied by local authorities, as reported by Maren Kern, a board member of the BBU.

While the intention behind milieu protection zones is to safeguard tenants from excessive rent increases and displacement, the BBU argues that the implementation of these regulations often has unintended consequences. Kern stated that while the goals of protecting tenants and preventing luxury renovations are valid, modernization efforts should not be equated solely with extravagant upgrades.

Many necessary renovations, such as installing elevators or adding balconies--improvements sought by tenants--are often classified as luxury enhancements, leading to their rejection. Kern highlighted that even basic features like wall-mounted toilets or heated towel racks are viewed through the lens of luxury modernization, which complicates the renovation process.

Furthermore, initiatives aimed at enhancing energy efficiency, such as thermal insulation, are frequently blocked. Kern emphasized that even when housing companies waive potential rent increases resulting from these measures, approvals are not granted. Innovative projects, such as using wastewater for toilet flushing to conserve valuable resources, face similar obstacles.

Kern described the situation as an extreme investment barrier, particularly impacting housing cooperatives and public housing companies known for their commitment to social housing and affordable rents. She pointed out that last year, the Senate enacted a stringent regulation that established uniform criteria for handling investment measures in milieu protection areas, which, in the BBU's view, warrants a review.

Currently, there are 81 officially designated milieu protection areas in Berlin, where approximately one-third of the population resides in around 680,000 apartments. These zones aim to maintain the social structure and protect tenants from significant rent increases and displacement. However, many construction measures that could lead to rent adjustments are generally prohibited in these areas, including converting rental units into condominiums. Local authorities hold a preemptive right of purchase in cases of property sales, and while there are exceptions, they are limited.