To Live and Buy in Berlin

A Facebook post making the rounds on forums in eastern Europe criticized Berlin’s social conservation laws restricting renovations apartment buyers can make

So, imagine that you’ve just found the Berlin version of a magical unicorn – an empty,1 affordable apartment for sale inside the city. Would you spend hundreds of thousands of Euros to buy it if you knew that you wouldn’t be allowed to renovate the bathroom or install a new kitchen?

If you buy in one of the 78 designated social conservation areas of the German capital, those are just a few of many restrictions on what you would be allowed to do with your property.

The Soziale Erhaltungsgebiete (better known by the colloquial term ‘milieuschutz‘ or ‘environment protection’) are designated districts within each of the city’s 12 boroughs that have been deemed most at-risk of becoming unaffordable to the average district resident.

Residential property within a designated milieuschutz area is subject to limitations on what renovations or changes can be made, as well as whether and how the property can be sold in the future.

A recent social media post that went viral on some European property forums ranted about the “unfree” environment in Berlin that made property ownership difficult. A key element that the oriiginal poster either didn’t mention or didn’t know, is that these rules don’t apply to all apartments across the city, but only ones in the specific areas.

Also, any renovation needed to bring the property up to modern living standards or the current building codes are allowed. The ones in protected areas just can’t be renovated beyond what the average living standard of the area currently is. (This is determined by a board at the district level, which determines what the standard is.)

Things commonly prohibited in milieuschutz areas include:

1. The addition of new balconies greater than 4 square meters;

2. Interior floorplan changes that increase or decrease the number of rooms in an apartment;

3. Combining or subdividing multiple units;

4. Installation of a separate shower and tub;

5. Replacement of the existing kitchen fixtures with a custom-fitted kitchen

6. Addition of a second bathroom

7. Installation of a double-sink vanity

8. Conversion of a all-rental building into individually privately owned apartments within a certain time after the property is acquired (some areas allow the sale of individual apartments to tenants during the prohibition period)

Each district has an office that enforces the regulation and can grant exceptions to the rules for certain reasons. The purpose of the restrictions are to prevent investors from buying up rental property and then performing extensive renovations that would make the resulting dwelling too expensive for the average renter in that district. It’s meant to work in concert with Berlin’s tenant protection laws (more about that in a later post) to preserve the economic diversity of the city.

It’s important to note that the milieuschutz protections don’t affect renters and their relationship to their landlord/lease.

Restrictions on when and how individual units can be resold are to preserve a healthy amount of rental property within the districts. Most Berliners (and most Germans) rent instead of own.

Across Europe, property speculation in historic city center has driven rapid increases in rents. The recent expansion of remote work has exacerbated the existing trends, with the so-called “digital nomads” bringing their non-local wages to the markets in lower income areas – making properties increasingly unaffordable for the local population.

In Berlin, average rents have increased more than 40 percent over the past year. By law, landlords can only increase existing tenants’ rents by a limited amount, but for most new contracts, the market largely dictates.

If these laws weren’t in place, it’s likely Berlin would be a sea of luxury apartments and AirBnBs.

That said, if you are fortunate enough to find the above-mentioned unicorn – but it is a 2-zimmer when you need three rooms, you should make sure to find out whether its in a protected area or not. It might not be a great deal after all.

More information on the social protection areas and other laws affecting Berlin property owners can be found at the link:

Engel & Volkers: Milieu protection, rent brake & conversion ordinance in Berlin

Note: A version of this article was previously published on the blog version of Alte Frau, New Life on June 17, 2023.