Berlin's New Rent Cap Bill

EXAMENSARBETE INOM SAMHÄLLSBYGGNAD, AVANCERAD NIVÅ, 30 HP STOCKHOLM, SVERIGE 2021

BERLIN’S NEW RENT CAP BILL A CONTROVERSY DIVIDING THE CITY?

LISA HUESMANN

KTH SKOLAN FÖR ARKITEKTUR OCH SAMHÄLLSBYGGNAD

BERLIN’S NEW RENT CAP BILL – A CONTROVERSY DIVIDING THE CITY?

Author: Lisa Huesmann

Supervisor: Jonathan Metzger

Examiner: Maria Håkansson

Degree Project in Urban and Regional Planning (AG212HT20)

Master's Program Sustainable Urban Planning and Design

KTH School of Architecture and Built Environment

September 2020

ABSTRACT

Urbanisation and growing populations are causing a lack of housing in many metropolitan areas such as Berlin, Germany. Especially tenants of rental units are affected by rapidly increasing housing prices that exhaust a growing share of their income. With a large proportion of its population living in rental units, increasing housing prices are a prominent challenge in Germany’s capital. To approach this issue, the parliament of the city state of Berlin has passed a rent cap bill in Febru- ary 2020. It states that rent prices for units built before 2014 are not allowed to be increased for the next five years, including some exceptions. Further, rents are not allowed to be higher than the average rent level from June 2019. The rent cap bill is controversial and strongly discussed by many stakeholders. Since the housing market is complex and includes many stakeholders with various opinions and motivations, this study aims to understand the different aspects of the controversy as it relates to this rent cap bill. By using Controversy Mapping by Venturini (2010, 2012), this work focuses on the investigation what stakeholder groups exist, which opinions and motivations they have, and if there is a common ground between them. As result, this study discloses actor-network constellations of Berlin’s rental housing market and untangles stakeholders’ opinions and motivations to enable a conversation.

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ACKNOWLEDGEMENTS

I would like to thank my thesis supervisor, Jonathan Metzger, for his guidance and comments throughout the process of this project. Encouraging, fruitful feedback and suggestions were highly appreciated and of great support and motivation for my work. I would also like to convey my sincere thanks to my friends for their moral and practical support. Camilla Baier and Ellen Zouras for inspiring discussions; Rik Steenman for motivating climbing sessions; Sarah Weiser and Eva Katzer for always having my back, even from afar. A special appreciation goes to those who had the patience to read through my work and helped with their con- structive feedback. Last but certainly not least, I owe my deepest gratitude to my parents and my sister who have been supporting me on this journey in any possible way. Their encouragements and love together with their care-packages have been incredible while writing my master thesis during a global pandemic.

Lisa Huesmann

Stockholm, September 2020

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TABLE OF CONTENTS

ABSTRACT ...... 2 ACKNOWLEDGEMENTS ...... 3 LIST OF FIGURES ...... 5 LIST OF TABLES ...... 6 1. INTRODUCTION ...... 7 2. RESEARCH APPROACH...... 10 2.1. Research Design ...... 10 2.2. Case Study ...... 14 2.3. Actor-Network Theory and Controversy Mapping ...... 15 2.4. Discourse Analysis ...... 20 3. BACKGROUND ...... 22 3.1. The Concept Of Housing ...... 22 3.2. Economic and Social Function of Housing ...... 23 3.3. Housing Policy ...... 26 3.4. City State of Berlin and its Housing Policy History ...... 29 3.5. Case Description: Berlin’s New Rent Cap Bill ...... 35 4. ANALYSIS ...... 40 4.1. From Statement to Literatures ...... 40 4.2. From Literature to Actors ...... 46 4.3. From Actor to Network ...... 49 4.4. From Network to Cosmoses ...... 55 4.4.1. Values and Ideologies of Actors ...... 56 4.4.2. Overlaps and Contradictions ...... 60 4.5. From Cosmoses to Cosmopolitics ...... 62 5. DISCUSSION ...... 64 5.1. Uncertainties ...... 64 5.2. Outlook ...... 66 6. CONCLUDING REMARKS ...... 68 REFERENCES ...... 69

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LIST OF FIGURES

Figure 1. Sketch embedded case study. Source: Own figure based on Yin, 2018...... 15 Figure 2. The five steps pf controversy mapping. Source: Venturini, 2010, pp. 266–267...... 18 Figure 3. Current parliament of Berlin. Source: Own figure based on Abgeordnetenhaus Berlin, 2016...... 30 Figure 4. Share of rental units in Berlin districts in 2018. Extrapolation of Census data 2011 calculated by Berlin’s senate administration for urban development and housing. Source: Own figure based on Investitionsbank Berlin, 2020, p. 44...... 31 Figure 5. Comparison of developments in Berlin, calculations for the 2018 IBB Housing Market Report. Source: Investitionsbank Berlin, 2018, p. 7...... 32 Figure 6. Berlin’s sectors after WWII. Source: Neumann, n.d...... 33 Figure 7. Rent price median of offered apartments in Berlin in 2019. Source: Own figure based on: Investitionsbank Berlin, 2020, p. 68...... 36 Figure 8. Timeline of Process of the new rent cap bill. Source: Own figure based on Berlin Senatsverwaltung für Stadtentwicklung und Wohnen, 2020b...... 37 Figure 9. New rent cap bill summary. Source: Own figure based on: Berlin Senatsverwaltung für Stadtentwicklung und Wohnen, 2020a...... 39 Figure 10. Protests against the bill in Berlin 9th December 2019. Signs reading for example “Rent cap does not build apartments” and “Houses need roofs, not caps”. Source: Haus & Grund Berlin, 2019a...... 41 Figure 11. Overview of claims of statement area 1. Source: Own figure...... 43 Figure 12. Overview of claims of statement area 2. Source: Own figure...... 45 Figure 13. Overview of claims of statement area 3. Source: Own figure...... 46 Figure 14. Senate and opposition of Berlin’s parliament. Source: Own figure. 49 Figure 15. Network with unweighted links. Source: Own figure...... 51 Figure 16. Map with weighted links. Source: Own figure...... 53 Figure 17. Connections and actions in the Network. Source: Own figure...... 54

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LIST OF TABLES

Table 1. List of actors and their roles...... 11 Table 2. Characteristics of a controversy and its application to the new bill. ... 20 Table 3. Figure of maximum rent prices per square meter depending on year of construction and kind of heating facility. Source: Extract from MietenWoG Bln, 2020, p. 51...... 38 Table 4. Statement areas about Berlin’s new rent cap bill and examples for directly connected literature...... 42 Table 5. List of actors, their roles, and the statement areas they support...... 47 Table 6. Overview actor’s connections in network...... 52 Table 7. Actors and their ideologies, motivations for their standpoint, and bigger vision outside of the Controversy...... 61

LIST OF ABBREVIATIONS

ANT Actor-Network Theory

Ger German

GDR German-Democratic Republic

UN United Nations

WPR “What is the problem represented to be?” approach

Cover pictures: Carolin Timm, 07.08.2020, Berlin.

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1. INTRODUCTION

Urbanisation is a global phenomenon. While in 2018, 55 percent of the world’s population lived in cities, predictions expect this share to grow to 68 percent by 2050 (United Nations, 2019). As the number of residents grows, cities densify, expand, and need additional infrastructure including housing. In a globalised, market-driven economy, a high demand, for example for housing, leads to higher prices if the supply does not grow simultaneously. As discussed by Harvey (2013), the neoliberal city is more often seen as an investment opportunity than as a social space that caters for its residents. Especially bigger cities and capitals, such as Berlin in Germany, are what investors are interested in. As a result, housing markets become overheated as profits only grow for a certain group of stakeholders on one side and social consequences such as gentrification, displacement, and a lack of affordable housing for other stakeholders on the other side. In between these two groups, there is a political structure, or framework given by national laws and governing parties. The topic of housing is a complex one, bringing politics, social values, finance, and law together with very different perspectives (Holm, 2014). Including individual situations and stories in this list adds an emotional layer to the discussion. Housing is a basic human need and one of the main urban functions of a city (Malottki & Vaché, 2017). Reports about displacement of residents because they can no longer afford rent, stories of rental units being trans- formed into condominiums, and news about citizen protests demanding political action are in the core of the issue. Simultaneously, housing companies and investors demand planning certainty and the ease of regulations to speed up the construction of new housing units and modernisations of existing ones.

This project focuses on Berlin, Germany, which is no exception from this development trend. In early 2020, Berlin’s new rent cap bill was introduced in an effort to reduce these disparities. The average rent price per housing unit in Berlin has doubled within the last ten years, changing and challenging many residents’ lives (Investitionsbank Berlin, 2018). As a welfare state in a social market economy, there is a clear political mandate that the government must cater to its residents by setting a reasonable and affordable social frame for market activities (Franke & Gregosz, 2013). The controversy around the rent cap bill shows the classic dilemma of how strong this social frame should be and how much it should interfere in market development – an ideological question, particularly when approaching

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the residential housing market. An overview of this market challenge is the general uncertainty and lack of knowledge on how to deal with the overheated housing market. In considering the larger picture on a national level, the topic of who has “the right to the city” (Harvey, 2013, p. 4) e.g. who has the right to “change and reinvent” it, is crucial to understand Berlin’s approach. The approach includes the question which power rules in processes of urbanisation – the power of the market or the collective power of its residents as human right as mentioned by Harvey (2013). Consequently, this includes the decision to focus rather on the economic, rather than the social function of housing. As the topic is one that concerns all citizen in one way or the other, it leads to heated discussions whenever a new turn seems to be taken (Kholodilin & Kohl, 2019). Political actions of any kind are often controversial. One of those political actions with a currently ongoing emotionally loaded debate is the new rent cap bill (Ger. Mietendeckel) that is enforced since February 2020 in Berlin (MietenWoG Bln, 2020). The law does not allow for rent increases for the next five years for all properties built before 2014, including some specific exceptions (Berlin Senatsverwaltung für Stadtentwicklung und Wohnen, 2020a).

The aim of this work is to understand the different aspects of the controversy as it relates to this rent cap bill. Since it is legally bound and executed in late February 2020, the effects, and consequences of it cannot be empirically assessed yet. Therefore, the focus will be on the opinions and expectations from different parties and stakeholders, their relations to each other and their origin. Those expectations are highly contradicting and part of larger, more complex discussions. The objective of this work is to investigate what motivations and stakeholder groups exist and if there is a common ground between them. To this end, both the bill itself as well as stakeholders’ opinions about it will be examined. Answering the following research questions (RQ), will contribute perspectives on how to approach complex and controversial topics while keeping the context in mind:

RQ1 What are the stakeholder’s opinions on the new rent cap bill?

RQ2 What do stakeholders claim the outcome will be and why?

RQ3 How are the stakeholders’ motivations overlapping or contradicting?

Answering these questions will meet the demand of previous research to contex- tualise local issues while incorporating larger scales. This introduction is followed

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by Section 2, presenting the research approach. The methodological and theoretical components of this work are strongly connected and are thus presented in one section, together providing the backbone to investigate the research questions. The use of a case study is briefly described, followed by a focus on Controversy Mapping by Venturini (2010, 2012) within the field of Actor-Network Theory by Latour (2007). This approach has been chosen to pay tribute to the complexity of the topic in question as well as to adopt an approach that, to my knowledge, has not been used yet for this case. Further, the tool of discourse analysis will be used within the controversy mapping with the “What is the problem represented to be?”- approach by Bacchi (2009). It is useful to gain a greater understanding of the different stakeholders’ standpoints as well as to be familiar with publications of different types. Furthermore, the research design will be presented including the scope and limitations of this study as well as ethical considerations.

Section 3 sheds light on the background of this case. After briefly introducing the concept of housing and housing policies in general, particularities of the German housing market are presented as well as the historical and current situation of the rental housing market in Berlin. The focus lays on housing market regulations and specifically public policies concerning rent control. Furthermore, the case itself, Berlin’s new rent cap bill, is presented. This section provides insights crucial for the understanding of the controversy as well as the different viewpoints and ideologies practiced within it. Section 4 zooms in to the case of Berlin’s new rent cap bill and the analysis is conducted according to the previously mentioned methods. This section finished by collecting the findings and answering the research questions. Section 5 discusses the findings, contextualises them, and places them in a broader framework. On top of that, further research recommendations are given together with trends and an outlook. Section 6 concludes by summarizing the results.

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2. RESEARCH APPROACH

In many studies, the methodological and the theoretical framework are presented separately. In this study, they are so deeply intertwined that they will be elaborated together. A set of different methods and theories forms the foundation to investigate the research questions. Qualitative methods are complemented using statistical data and maps to explore the case holistically. The findings from self- conducted literature reviews create a theoretical framework and provide important data for the analysis. The case study of this work is Berlin’s rent cap bill with a focus on controversy mapping of the ongoing discussion. To enable the mapping, discourse analysis will be used such as Bacchi’s (2009) “What is the problem represented to be?” (WPR) method.

2.1. RESEARCH DESIGN In this chapter, the research design is presented as the basis for a transparent and comprehensible study. The case study is grounded on the idea to include a diverse range of perspectives on Berlin’s new rent cap bill to elaborate the complexity of the controversy. This meets Mol’s (1999) demand for a multi-perspective approach (see Section 2.3). Therefore, the data collection includes different types of sources as presented below.

CHOICE OF DATA

The main sources of data are different kinds of literature such as peer-reviewed articles from scientific journals and publicly available texts such as legislative texts, public communication documents regarding the bill, articles from local and national newspapers, statements from property management companies as well as a wide range of subjective literature including statements from political parties. The decision to include a diverse mix of texts allows for the comprehensive analysis of stakeholders’ opinions within the controversy as well as public perception. Those texts can be characterised as biased since they articulate personal, subjective no- tions. Therefore, they are complemented by literature about the legal background as well as by scientific texts such as papers published in peer-reviewed scientific journals. The authors of these scientific texts take on a special role which is worth mentioning. On the one hand, they provide a basic knowledge to the heated and often emotionally loaded discussion around the rent cap bill which is crucial to acknowledge for this study. On the other, these texts and their authors involve

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themselves in this controversial discussion as actors since their writing can be used as arguments by the different groups of interests and even scientific texts are never bias-free. Some researchers created their papers on behalf of certain stakeholder groups such as Sagner and Voigtländer (2019) whose assessment of the possible consequences of the bill was funded by the political Party, Christian Dem- ocrats (CDU). This is an important detail that must be recognised since it can influence the opinion and information given in the text. Hence, the literature used in this study has been critically explored. In this study, the terms stakeholder and actor are used in a synonymous manner and are based on Venturini’s (2010) definition of actors. He describes them as entities whose existence or non-existence make a difference in the discourse and whose absence would be recognised by other actors. A total number of 18 actors were included in the main analysis of this study and they were chosen based on their proximity to the controversy (see Table 1). This does not mean that there are no further actors relevant to this debate but rather the amount was chosen based on a close relation to the controversy. In Section 4.2, further details about the selection of these actors and their roles within the controversy are described.

Table 1. List of actors and their roles.

NO. ACTORS ROLE

1 Rent cap bill Law 2 SPD Fraction Berlin Political party 3 Green Party Fraction Berlin Political party 4 Left Party Fraction Berlin Political party 5 CDU Fraction Berlin Political party 6 AfD Fraction Berlin Political party 7 FDP Fraction Berlin Political party 8 Listed Housing Companies Private company 9 Shareholders Participators in private company 10 Craftspeople Private business 11 Private Landlords Civil individuals 12 Owners Association Collective of private landlords 13 Tenants Civil individuals 14 Rental Union Collective of tenants 15 Public Housing Companies Public company 16 Cooperatives Company owned by users 17 Senate Collective of political parties 18 Opposition parties Collective of political parties

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As a desk study, most of the data was collected as followed. First, the literature was gathered by online key word searches, sighting through search results and researching documents cited in useful texts. Facilitating tools were for example literature databases, online newspapers, and actor’s webpages. The selected literature was then critically examined and information regarding the analysis and the research questions was extracted. Key points were identified, and inconsistencies were noted as important proof of different viewpoints. The information was then sorted and categorised to make it accessible and utilisable for the demands of the analysis. Developing an effective way of document and information management by for example using tables, sketches and overviews during the process helped to smoothen the workflow and to improved accuracy for references. It was crucial to re-examine the literature throughout the process and add more sources, especially when new issues were raised along the way and new perspectives unfold (Eisenhardt, 1989). This is a characteristic of an abductive study approach.

The topic of language employed in the literature has played a crucial role in this study. Texts were read and analysed in German, as the case is located in Berlin. Further, there were English texts used as well. Since German is my native language, the use of German texts did not require translating tools. Translations given throughout this work were performed by myself as the author of this study. Some German technical vocabulary was lacking a direct translation in English and therefore in some cases, the German term is given in brackets.

Other types of sources used in this study include audio-visual recordings from sessions of the Berlin parliament as well as recordings from panel discussions dealing with the current housing situation in Berlin. Those motion pictures did not only deliver statements for the analysis but also helped to get a deeper understanding of what the controversy looks like in practice and the way opposing actors interact with each other when discussion different aspects of the topic. To illustrate the results of the analysis, the software Gephi was used as well as Excel to prepare the data sets for it.

SCOPE AND LIMITATIONS

“No controversy is an island” (Venturini, 2012, p. 806) since it always consists of a number of sub-controversies and is part of bigger controversies itself. Yet, it is the researcher’s task to focus on the study subject and set boundaries to the

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investigation (see Section 2.3). Although Venturini (2010) demands for as many statements as possible to create what Suchman (2002) calls a certain degree of objectivity through many subjectivities, a scope needs to be decided on to be able to conduct this study. I was well-aware of the fine line between over-simplifications when drawing the scope too narrow and exceeding the feasibility by not respecting the realms of this study. I follow the methodology to the best of my knowledge within the limitations of this study.

It is important to mention, that there is an extensive amount of data available which is why, for example, personal opinions in the form of comments in comment sections on newspaper article or social media as well as social media posts themselves are not included in this analysis. Further, the number of available sources and statements concerning this controversy is constantly growing due to the cur- rency of the topic. Therefore, this work does not include statements published after the 25th July 2020.

Another limiting factor is the definition of actors. Tenants can also be shareholders of listed property management companies and therefore might be considered part of two groups of actors. To enable this study, these conflicts of interest are seen as individual exceptions and will not be included in the analysis yet recognised in the interpretation of the results. Another example for this discrepancy is the case of private landlords that do not pursue a profit-gaining model but a cost-covering interest framework while renting out their housing units. These landlords exist but for reasons of modelling and simplification are not included in the definition of private landlords.

In the topic of actors and the role of political decisions, it is also important that international, and short-term residents living in Berlin have not participated in the election for the city state government. Yet, they are affected by the new rent cap bill. Choosing a certain scope limits the cultural and geographical applicability and informative value. I am aware that in other countries and cultures, this analysis may not stand its ground and must be read with caution.

ETHICAL CONSIDERATIONS

Careful ethical considerations for the study include a personal questioning of my own interests and motives as well as full transparency of my research intentions. As this study only used secondary data, consent forms were not necessary.

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Ownership rights of the data used are fully respected through citation practice according to the 7th edition of the American Psychology Association Citation System (APA) facilitated by the reference management software Citavi. Since this study is conducted in a special qualitative manner, to a large extent it is based on my interpretation as the author of it. In terms of ethics of interpretation, it means that I am responsible for the interpretations that I make and that I am conducting this study to the best of my knowledge.

Another ethical consideration is the matter of use of language. Gender-inclusive language is used as much as possible following the UN Guidelines for gender-inclusive language in English (United Nations, n.d.). In case only one gender is mentioned, all genders are intended to be addressed. For example, the term landlord includes landladies and other genders as well. The UN suggests replacing the term landlord by the term owner which is not an option in this study because the owner of a housing unit is not necessarily renting it out and therefore not necessarily a landlord or landlady.

2.2. CASE STUDY

A case study is an example that is chosen to be analysed (Robertson, 2012). It can be approached with various research techniques. A single case can be chosen out of different reasons but aims for an in-depth analysis of a social phenomenon (Yin, 2018). The case can be relevant to theory development and evolvement by challenging, confirming, or expanding a given theory through knowledge derived from practice. It can be unusual as well as common. The form of an embedded single-case design was chosen for this study to match the complexity of the issue. As a single-case study, it focuses only on this one case because even though housing market regulations have a long history as a social policy instrument, especially in relation to World War I and II (Kholodilin & Kohl, 2019), the new bill in Berlin is unique in its design. It does affect new rental contracts as well as existing ones and does not only focus on new contracts, which is the case for comparable laws in other European countries. Therefore, it is a “unique” and “prototypical” (Scholz & Tietje, 2002, p. 11) case and does not include other cases of disputes around housing market regulations to the same extent.

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Embedded case studies investigate subunits which focus on different specifics of the case. According to Scholz and Tietje (2002), these can for example be groups with different interests affected by the same project. As Yin (2018, p. 54) states, “subunits can often add significant opportunities for extensive analysis, enhancing the insights into the single-case”. The researcher should be aware of the risk to focus too much on the subunits and to lose focus on holistic case. If the orientation shifts, it would need to be justified and argued for. Within the context of the city and federal state of Berlin, the case of the new rent cap bill will be analysed and with it the embedded subunits which are the different opinions of the stakeholders (see Figure 1).

Figure 1. Sketch embedded case study. Source: Own figure based on Yin, 2018.

In general, with case studies, there is the risk to generalise without keeping context in mind and to portray only a very small part of the bigger picture. On the other hand, it allows in-depths analysis and it is seen as ”a necessary and sufficient method” (Flyvbjerg, 2006, p. 241) in social science. This paper takes both of these points into consideration in the Section 4’s analysis.

2.3. ACTOR-NETWORK THEORY AND CONTROVERSY MAPPING

The case study of Berlin’s new rent cap bill will be approached by Actor-Network Theory (ANT) and Controversy Mapping which are both presented in the following sections.

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ACTOR-NETWORK THEORY

Actor-Network Theory (ANT) was coined by Latour in the 1980s within science and technology studies and is rather a research method than a theory (Dankert, 2012). It aims to capture dynamics and issues that are continuously reconstructed (Elam et al., 2019). While doing so, an ANT-analysis repeatedly goes back and forth between analysing components that are considered actors as effects of hetero- genous relations in networks and analysing components that are considered networks as actors originating concrete effects through the relations that they evoke. Those actors can be humans and non-humans, such as institutions, alike (Ven- turini, 2010). It is based on constructivism, rejecting postmodernist and modernist ideas (Dankert, 2012). ANT aims to deconstruct groups to see of which entities they are made of while understanding that “groups are not stable” (Dankert, 2012, p. 47). It is further based on the idea that there is a truth that changes over time and that the focus of research should be on the interactions and processes between the groups and actors (Muniesa, 2015). Over the years, ANT became a method used in many fields and further developed into ANT-driven methods. These methods are particularly “appropriate for the study of complex and controversial situations” (Muniesa, 2015, p. 84).

CONTROVERSY MAPPING

The term controversy describes disagreements as “complex phenomena” (Venturini, 2010, p. 260) of which questions and issues “remain undecided and open to combined scientific and political interpretation” (Elam et al., 2019, p. 67). In controversies, many actors are involved forming and decomposing units in a conflict depending on what aspect of it is discussed (Venturini, 2010). As Venturini (2010, p. 262) frames it, in controversies, actors are not only disagreeing on an- swers, but they dispute on what questions to ask, too. As in ANT, those actors can be human and non-human (Venturini, 2010) while non-human actors usually have humans as advocates to ask questions in their interest. When questioning main issues such as the housing market, it becomes clear that controversies are often related to social inequalities (Venturini, 2010, p. 262). The attempts to preserve or shift those inequalities combined with discussing things taken for granted and barely questioned in the past fuels the controversy as a complex matter, especially when social hierarchies are at stake (Venturini, 2010, p. 262).

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For scholars such as Suchman (2002), the only way to objectivity is through collective knowledge which can be achieved when multiple, partial perspectives are included in the research. This can be linked to Mol’s (1999, p. 74) idea that “reality is multiple” and that there are different versions of reality. Those versions can be related differently, for example they can clash or depend on each other. It is crucial who chooses which reality to act upon and who is affected by this choice. Ven- turini’s (2010) work can be understood as bringing these ideas together in a method. Venturini states that research perspectives are always biased and that many subjectivities have a better chance to create objectivity as well as that there is not the one truth but rather several truths and that those can change over time.

Mapping of controversies is seen as an applied form of ANT (Elam et al., 2019) and as such as a constructivist method (Venturini, 2010, p. 263). Originated by Latour as a new form of social cartography, controversy mapping aims to “monitor and visualise controversies as they are actually unfolding” (Elam et al., 2019, p. 65). As a mean to share and communicate concerns already known by many (Elam et al., 2019, p. 74) it observes and describes social debates (Venturini, 2010, p. 258). Observing is referring to “unfolding the complexity” (Venturini, 2012, p. 797) while describing to “ordering such complexity”. The classical controversy mapping follows five steps, as shown in Figure 2. These five steps are not to be conducted individually after each other but with a constant connection between them and a repeatedly back and forth in the process. Further, the term literature is used in a wider sense in this method than the common understanding of it. It does not only include written texts but rather the entire discourse around a controversy with its different communication channels.

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1) FROM STATEMENT TO LITERATURES As a first step, statements around the controversy are examined to identify the “controversial arena” (Venturini, 2010, p. 266). This serves as a basic map of references and is followed by the search for connected literature.

2) FROM LITERATURE TO ACTORS Based on the literature, actors become visible. Actors are defined as entities whose existence or non-existence make a difference in the conflict. It is important to keep in mind that actors can be human and non-human, and they should all be considered in the same manner.

3) FROM ACTOR TO NETWORK Actors are crucial components of networks. They compose networks and by interacting and building relations they are as well shaped by other actors. In this step, the connections between the actors are examined as well as theirs actions.

4) FROM NETWORK TO COSMOSES The focus is on the importance of ideologies behind statements of actors which are called cosmoses. Different actors believe in different truths and the bigger visions outside of the con-troversy are steering its direction. Therefore, it is important to understand which different meanings actors attribute to statements and actions.

5) FROM COSMOSES TO COSMOPOLITICS As a final step, the ideologies discovered in step 4 are included in the map of the controversy and enable the map to not only be a “mirror” of the situation but a making it “legible” (Venturini, 2012, p. 797).

Figure 2. The five steps pf controversy mapping. Source: Venturini, 2010, pp. 266–267.

A challenge of this method is to include as many statements as possible to create a “second-degree objectivity” (Venturini, 2010, p. 270). It is the researcher’s task to set boundaries to the investigation and to decide on the scope. Another fre- quently mentioned critique is that this method does not lead to “taking a stand on the issue” (Venturini, 2010, p. 268). According to Venturini (2010), researchers are not responsible for finding a decision to the controversy, the actors are.

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Further, controversy mapping “is not meant to close controversies, but to show that they may be closed in many different ways” (Venturini, 2010, p. 268). This corresponds with the dilemma in planning described by Rittel and Weber (1973). According to them, social problems are “wicked problems” (Rittel & Webber, 1973, p. 160) because they can never be entirely solved due to barriers such as plurality. Every question asked depends on the understanding of the problem. Since there are various values held by different groups of actors, different problem formula- tions lead to different questions and lead to different problem resolutions. On top of that, solutions in planning cannot be tested because they are “one-shot opera- tions” (Rittel & Webber, 1973, p. 162). Since housing is related and affected by so many other fields, it is a challenge to put it in a certain field of research or policy. Strengths of mapping a controversy are the ones valid for mapping in general (Venturini, 2012, p. 797). Even though controversy mapping might seem confus- ing at first, the map develops over time and are corrected while exploring the issue. It is also important to keep in mind that maps are not meant to be read point by point but as a holistic picture.

The method is chosen for this project because it clearly deals with a controversy, a public social conflict about the new housing regulation bill in Berlin where many actors are involved. It enables the researcher to untangle the controversy by clar- ifying and understanding the different actors and their constellations better without aiming for one clear solution to it. It rather aims for making the disagreements more readable and help all involved parties to participate in dealing with the issue. When Venturini (2010) explains how to choose a controversy to investigate, he stresses that it is best observed when it reaches “the peak of its overheating” (Venturini, 2010, p. 264) (see Table 2). This characteristic fits well with the conflict around the new rent cap bill. A characteristic that is met to a certain extent is the restriction of the controversy to a specific subject which in this case is the previously mentioned bill. Even though the bill is part of a bigger discussion about the housing market in Berlin and despite being strongly entangled with other subjects, it is the trigger of this specific controversy. Furthermore, the bill can be characterised as a social-political technology in a wider sense because questions about ef- fectivity, cost-benefit and acceptability of side-effects qualify it to be of technolog- ical nature.

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Table 2. Characteristics of a controversy and its application to the new bill.

Characteristics to choose a controversy by (Venturini, Controversy around the new housing 2010) p. 264) market regulation

“Still controversies are best observed when they reach the peak of their overheating”

“Issues should be studied when they are both salient and unresolved”

“As a general rule, the more a controversy is re- The case is relatively complex. But the stricted to a specific subject, the easier will be its trigger of the controversy is one specific analysis” bill.

Was developed to map public debates

“favour controversies concerning scientific or technical issues”

Since the case of Berlin fits Rittel and Weber’s (1973) definition of social problems, the method of controversy mapping was chosen for this study. Just as all other “wicked” problems, this case is entangled with other problems. It is unlikely to find the one solution to this dilemma, but it will be used to explore the different understandings of the problem. After all, controversy mapping aims to provoke a think- ing process and create awareness (Whatmore, 2009). This is supported by other scholars, such as Suchman (2002) who demands for multiple perspectives through an “ongoing process of debate” (Suchman, 2002, p. 92) instead of the one objectivity. Additionally, as “maps are never fully formed” (Kitchin & Dodge, 2007, p. 331), this study represents rather a snapshot than a final state that will not change in the future. In this study, the discursive approach of controversy mapping is used which aims to map the different positions in the debate and to detect relations between them (Marres, 2015). As mentioned by Marres (2015, p. 661), it “builds on sociological methods of discourse analysis” to do so.

2.4. DISCOURSE ANALYSIS Discourse analysis is a qualitative research method that focuses on language and communication (Manzi, 2012). It is commonly used in urban studies and housing studies as well as policy analysis to investigate the use of language, communication, and normative strategies (Manzi, 2012). Weak spots of discourse analysis are [20]

that it can be seen as too broad and that texts can be interpreted differently and subjectively (Manzi, 2012). First, these critiques will be met by clearly stating the scope and second, arguing for the choices made.

Bacchi’s (2009) “What is the problem represented to be?” (WPR) method is a form of discourse analysis based on the idea that any kind of communication document emerges from a problem. These documents can be for example policies, plans or newspaper articles. The term ‘problem’, in this context, means the need of im- proving a certain matter. When applying this method, the aim is to boil down the problem from the document and render it explicit. By contextualising the findings, the problem is further described to find out how it is “represented to be” and why it is represented in that way. The method is based on six central questions as listed below.

1) What is the ‘problem’ represented to be?

2) What presuppositions or assumptions underlie this representation?

3) How has this representation of the ‘problem’ come about?

4) What is left unproblematic in this ‘problem’ representation? Where are the silences? Can the ‘problem’ be thought of differently?

5) What effects are produced by this representation of the ‘problem’?

6) How/where has this representation of the ‘problem’ been produced, dis- seminated, and defended? How could it be questioned, disrupted, and re- placed? (Bacchi, 2009, p. 2)

The overall aim of this method is to consider different understandings of the issue at stake and grasp the different contexts they emerge from (Bacchi, 2009). The method focuses on analysing a solution by deeply exploring the problem behind it and was chosen for this work as it serves as a conduit to better understanding of the discussion and origin of different opinions on the Berlin bill.

It will also be helpful when looking at different policy and planning documents regarding the new housing bill as well as at counterproposals from different groups of stakeholders. It is useful for critical analysis because it does not only focus on what is being said but also on what is omitted. Opinions are based on subjective views that entail representations rather than indisputable facts.

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3. BACKGROUND

This section introduces the concept of housing in general as well as its social and economic function in relation to the housing market. Furthermore, the context of the case study is explored which “is a crucial part of understanding housing and its role in both national and local situations” (Clark, 2012, 245). This will lay the foundation for Chapter 4, the analysis of the controversy. Relevant facts about the city state of Berlin are outlined, followed by a summary of the historic and current development of Berlin’s housing market and its challenges. Finally, the case itself, the new rent cap bill, is presented.

3.1. THE CONCEPT OF HOUSING Housing is a basic human need (Malottki & Vaché, 2017, p. 234) and is strongly connected to the well-being of residents and “embedded in complex social rela- tionships” (Maclennan, 2012, p. 10). Regardless of cultural and social differences, housing describes the built environment that functions as shelter and space of living. As an essential part of human life, it has been investigated from various angles and within different fields of research. Acknowledging that there are various challenges people face in regard to adequate housing in different parts of the world (UN Habitat, 2014), this study focuses on housing in the metropolitan area of Ber- lin, Germany. Therefore, it is investigated within the European, and more specifically the German context.

Housing holds both a social and an economic function (Nepal et al., 2010). Further, it shapes the city due to its close connection to urban development. The social function of housing is strongly connected to affordability, adequacy, accessibility, and security. The economic function relates housing to the financial markets as a commodity, seeing it as an asset for investors and the city. Correspondingly, the housing sector is a complex system with many different stakeholders that have various relations to each other (Holm, 2014). They all offer different ideas about which function of housing to prioritise. This goes hand in hand with the dilemma in planning, described by Rittel and Weber (1973). Accordingly, an interdisciplinary discourse is needed to understand and approach urban housing and its challenges.

Considering the ongoing worldwide urbanisation, the question of how and where residents live in cities is not novel, yet it is increasingly taking centre stage in

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public debate. It is considered to be the public authorities’ task to cater to resident needs by providing adequate affordable housing. A 2019 survey among mayors of different cities has shown that the importance of housing – as a task of a city council – has constantly grown in the last decade (Henger et al., 2019). The characteristic of affordability has particularly been a growing challenge in many cities due to several factors, such as intense urbanisation and the growing gap between rich and poor (United Nations, 2019). Coalitions are formed and controversies are discussed based on highly contrasting standpoints (Holm, 2014). One conflicting point discussed is the role of housing as a commodity that is, being traded as a scarce market good, causing detachment from its social function.

3.2. ECONOMIC AND SOCIAL FUNCTION OF HOUSING The economic value of housing and the possibility to generate revenue from it are prominent factors of urban development. There is a wide range of opinions and approaches in politics, literature, and public debates (Maclennan, 2012), spanning from the extreme market-liberal understanding foregrounding the economic function of housing to the contrary understanding focusing on the social function of it. The question of how much these two can overlap in practice is often discussed. To be able to follow the argumentations in the analysis, this disagreement is explored further in this section.

HOUSING AS COMMODITY?

According to market-liberal understanding, housing should be conceptualised as a scarce good (Malottki & Vaché, 2017) that is traded and distributed in the housing market. The price for goods traded on the free market is formed by demand and supply (Malottki & Vaché, 2017). This dates back to Adam Smith and Marshall who focused on the price as allocator for resources (Whitehead, 2012). The liberal market is based on the idea that an open and deregulated market is the ideal basis for socioeconomic welfare (Theodore et al., 2011). According to liberal theory, when the demand exceeds the supply, the price increases and forms a new equilibrium. Thereby demand is discouraged and no longer exceeding the supply, which means only a certain amount of market participants can afford the higher price. According to extreme market liberals, the market regulates itself (Theodore et al., 2011). This approach is not only to be applied to the housing sector but to urban development in general. Housing is just one of many examples of commodification in [23]

urban areas. The city itself is commodified and “continually reorganised in order to enhance the profit-making capacities of capital” (Brenner et al., 2009, p. 178). Smith (2002) understands it as a shift from an urban scale of social reproduction to a focus on productive capital grounded in liberalism. Voices that demand for decommodification of the housing market are growing louder since markets get more saturated in many metropolitan areas globally (Holm, 2014). They demand shifts from private ownership towards municipalities, non-profits, and cooperatives, aiming to extract housing from the free market (Holm, 2014). This perspective forms the other end of the spectrum with a very social understanding of housing and the city itself. It would require prioritising the collective power of the residents over the corporate or for-profit one.

CHALLENGES OF THE HOUSING MARKET

There are challenges when applying extreme views on housing function. Social understanding could threaten a capitalist tradition ranging from validating the right of ownership (for example apartment owners renting out their units) to large, listed companies that are specialised in generating revenue (for example financialisation of the housing market). This is often articulated by political parties with socialist backgrounds but more so from sociologists and members of anti-growth move- ments (Gretten, 2019).

The challenge that arises with the extreme market-liberal position is the understanding of housing as a scarce good. It may lead to the exclusion of certain groups of stakeholders from the housing supply based on the fact that they cannot afford the ‘good’ any longer. This translates into violating people’s freedom to choose the place of their living and can lead to displacement. It is often the case in many larger cities, that only wealthy households are able to afford living in high-cost areas, historically causing an issue for low-income households as housing prices are driven up. This is now an issue valid for an increasing number of districts. Suburbanisation and fragmentation of cities (Nepal et al., 2010) is now a challenge for average income up to upper-average income households as well. Statistics show that the share of income spent on housing has increased steadily in recent decades and is expected to continue to do so (Fratzscher, 2020).

What fuels the conflict between the range of positions is that within the logic of the market, there is no motivation for the social provision of housing which socialist and urban planner Wilhelm van Vliet calls the “social blindness of the housing [24]

market” (Holm, 2014, p. 29). It goes hand in hand with Harvey’s (2013) description of the neoliberal city as an investment opportunity instead of a social space that caters to its residents. It leads to the question of who has “the right to the city” (Harvey, 2013, p. 4) and the dispute between the power of the free market and the collective power of its residents.

There are considerations that approach the topic of housing with a mix of the two views such as increasing the housing supply to meet the increased demand, where market mechanisms are applied to solve a social issue. At the same time, it is important to keep in mind that constructing and providing a higher quantity of housing units is a time-consuming endeavour. Bureaucratic barriers such as building permits and construction times are slowing this process down. Therefore, this approach requires long-term planning. Besides many challenges caused by increased housing prices, such as displacement and segregation, another important, yet often unmentioned factor is its influence on a population’s purchasing power (Kholodilin, 2018). Since rent takes up a high share of household expenditures, the impact of its increase is relevant to the economy.

FINANCIALISATION OF THE HOUSING MARKET

The reasons for the increased housing prices are manifold (Malottki & Vaché, 2017). While the previously mentioned changes in demand and supply is one of them, privatisations of public housing and speculations with properties have been fuelling the commodification of housing even further. Changes in politics and increased national and international migration to cities (for example for education or employment) can be added to the list as well (Malottki & Vaché, 2017). Schwartz (2020, p. 485) sees the financialisation of housing as “a state-driven story” and cautions for the “erosion of state power in favour of markets”. What he refers to is the public loss of control over a large amount of the housing stock for example due to privatisation of public housing. In the past, authorities were the ones making decisions over management, rents and distribution from a cost-covering and welfare position. Now, in many cases, profit-orientated investors and listed residential property companies are in charge. The reasons for the privatisation of properties will be further elaborated in Section 3.4. The speculation of real estate is a major topic of its own which will not be discussed in depth in this project, yet it is worth mentioning that the financial markets have increasingly added real estate to their portfolio. Especially in times of low interest rates, real estate is an

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attractive profit-promising investment which often happens internationally through for example private equity funds (Moschke, 2019). This is creating a mental and geographical gap between decision-makers and residents of a property. As a result, investors and shareholders become powerful participants in the complex system of housing. At this point, it becomes clear that housing is no longer only about residents finding a place to live in a city.

The case of Berlin is situated within the German social market economy following principles of a welfare state. In a social market economy, the government designs a set of rules as a social frame for the market to act in. Those rules are meant to protect social standards and society’s welfare as well as maintain a fair competition between market participants (Franke & Gregosz, 2013). Therefore, it is understood as a position on the range that tries to combine economic and social aspects.

3.3. HOUSING POLICY

The German government is obligated to provide intact cities and housing for its residents (Bundesministerium des Innern, für Bau und Heimat, 2020b) and to “supply people with affordable, quality living space” (Kholodilin & Kohl, 2019, p. 348) which is grounded in the higher goal of a political, social, and economically stable society. Especially in a social market economy, this task is traditionally man- ifested. The way in which it is carried out can differ depending on the approach (Henger et al., 2019). Housing policy is a “set of measures applied by a government in order to affect the market performance” (Kholodilin, 2018, p. 2), which originates from a failure in the housing market and is therefore strongly connected to economic ideologies. Typical historic examples where governments intervened in the housing market were after World War I and II when housing was scarce and prices were rapidly increasing (Voigtländer, 2014). In this case, rent control was the measure of choice.

Regardless of the ideology scholars represent, they all stress the importance of a policy-mix. If regulations are not part of a bigger set of measures with consideration of affected groups, the risk of a negative impact on households and the economy is high (Henger et al., 2019; Kholodilin, 2018). Such negative impacts could appear if the long-term effect of a new policy has not been assessed or if a policy is imbalanced and one stakeholder group is favoured over the other. One example

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for components of this policy-mix could be a pre-emptive right for the city when privatising buildings, so that in case of a resell the city would keep control over ownership changes (Henger et al., 2019). Additionally, strategies on how to allocate building plots could be changed to concept-based rather than highest bid- based. In general, when creating new policies, “the balance between the interests of tenants and those of investors must be preserved” (Kholodilin & Kohl, 2019, p. 352).

Another aspect of housing policy is that the measures can be stimulating or restricting. They can be stimulating (Kholodilin, 2018) by binding the support to a property, such as grants paid to first-time homeowners or by supporting individuals’ housing allowances independent from the property it is used for (Bundesministerium des Innern, für Bau und Heimat, 2019). They can also restrict the market by controlling prices and housing space management (Kholodilin, 2018), as well as by providing protection against eviction (Kholodilin & Kohl, 2019).

Depending on what a housing policy is aiming for, it could remain ineffective or result in unexpected consequences in practice, even if it the aim itself is clearly formulated (Kholodilin, 2018). Especially restrictive measures must be combined with “enforcement mechanisms” (Turner & Malpezzi, 2003, p. 17) to ensure vali- dations of the measure are traceable and fineable. When the measure causes in- conveniences for a certain group of market participants, the targeted group can be motivated and innovative to search for loopholes to bypass a measure. For example, what some landlords in Berlin currently do is offering furnished instead of unfurnished apartments which they think enables them to have a user contract (Ger. Nutzungsvertrag) with the tenant instead of a rent contract (Jürgens, 2020). Since the rent cap bill is only applicable to rent contracts, the change in the type of contract allows them to charge as much as they want. Legally speaking, they now charge a “user fee” and not a standard “rent”.

Despite the fact that there might be illegal actions involved, tenants often do not practice their rights. Sometimes because they do not know their rights, sometimes because they do not want to risk the relationship with their landlord and sometimes simply because they are willing to make sacrifices to finally find an apartment in a tight market (Kholodilin, 2018). Furthermore, the fear of legal costs can hinder

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residents to act. Therefore, communication, monitoring, regular assessments, and a solid reporting system are recommended and necessary.

It is important to keep in mind that the housing market is strongly influenced by policies from other sectors as well (Kholodilin, 2018). Land use regulations, environmental policies, construction requirements, and tax policies are some examples. If the regulations are too strict it can take longer to build a new housing project and to find investors. If the regulations are too loose, it might attract investors, but it might also risk a fair distribution of housing or housing quality. This goes hand-in-hand with Voigtländer’s (2014) demand to explore tools other than traditional housing subsidies or regulations such as redensification, designating more areas as building plots and speeding up approval procedures to boost construction of new housing. However, a higher quantity of housing units does not automatically secure their affordability which is why a close look at new construction is crucial.

RENT REGULATIONS

Rent control can have different forms and aims (Micheli & Schmidt, 2015). One of the main motivations to put such regulations in place is the “increase in the welfare of the less wealthy” (Micheli & Schmidt, 2015, p. 238). As counteraction to displacement and fragmentation of cities, the regulation of rent is based on the idea of social integration. Scholars (Kholodilin, 2018; Micheli & Schmidt, 2015) distinguish between first and second generation rent control. First generation rent control fixes the rent at a certain level below its market value and has been used often until the 1970s. Second generation rent control describes more flexible control measures that can differ between locations and often apply for new rental contracts, such as Germany’s national rent regulation (see Section 3.5). Even though the number of first generation rent control cases in recent history has been low, Berlin’s new rent freeze would fall in the first category.

There are different interpretations of the drawbacks and assets of rent regulations. On the one hand as drawbacks, tenants might for instance stay in their apartments even if it is not a perfect match for them any longer due to the shortage of alter- natives (Kholodilin, 2018). There may be less frequent repairs since owners are cutting expenses and investing in housing can become more unattractive for landlords due to the decreased profit opportunities. On the other hand, as assets, according to Micheli and Schmidt (2015, p. 244), ”rent control might not be as [28]

harmful as widely perceived”. Housing regulations can help to allocate housing in a more fair and affordable way. It can make units more accessible and have an anti-inflationary impact. As Turner and Malpezzi (2003, p. 15) found in their review of hundreds of rent control studies from various countries, the “regulation per se is neither good nor bad” because the outcome highly depends on how it is designed and implemented in a certain market.

While several regulations are discussed and investigated in a short-term and national framework, a study from 2019 using historical long-term data has shown that there is a negative “correlation between rental market regulation and home- ownership rates” (Kholodilin & Kohl, 2019, p. 345). It has also shown that over the past 100 years, the intensity of regulations has fluctuated. The higher the regulations, the lower the share of rental units. The reasoning behind this finding is believed to be that it is the rational thing to do for investors to retreat from the rental housing segment while interested tenants are queuing for apartments that become attractively cheap. Based on the assumption that regulations are not implemented comprehensively in an area, the study has also shown that rents in non-regulated areas rise faster than they would without regulated rents in their surrounding (Kholodilin & Kohl, 2019), which is clearly a drawback for residents and an advantage for investors. Overall, there is an ongoing heated debate about how much intervention into the housing market is beneficial and for whom. Fol- lowing Holm’s (2014) demand for coalitions and stakeholder constellations to break apart to allow for change in housing politics, the following analysis aims to clarify the discourse around one example for rent control, the new housing regulation bill in Berlin.

3.4. CITY STATE OF BERLIN AND ITS HOUSING POLICY HISTORY

To understand the context of the case study, this section provides crucial background information about the history of Berlin and its housing policy as well as the current political and socio-economic situation. Berlin is the federal capital of Ger- many since 1991, and one of its 16 federal states (Arandelovic & Bogunovich, 2014) which makes it a city state. With 3.3 million inhabitants (Destatis Statis- tisches Bundesamt, 2018) it is the largest city in Germany and associated with many cultural institutions and political power (Arandelovic & Bogunovich, 2014). Since 2016, Berlin’s parliament consists of 160 parliamentarians from six different [29]

parties, three of which are independent (see Figure 3). A political coalition holds the majority, consisting of the Social Democratic Party (SPD), the Green Party and the Left Party. The parliament elects the governing mayor who then forms the senate to govern with her or him (Abgeordnetenhaus Berlin, n.d.). Since 2014, the governing mayor of Berlin is Michael Müller, member of the SPD, and since 2016, the senator for urban development and housing is Katrin Lompscher, member of the Left Party (Senatskanzlei Berlin, n.d.). The next election is scheduled for 2021.

Figure 3. Current parliament of Berlin. Source: Own figure based on Abgeordnetenhaus Berlin, 2016.

Today, the rental market is still a major part of the housing market in Germany (Meulen & Mitze, 2014). With 53 percent (2012), the house-ownership rate in Ger- many is low compared to other European countries (Meulen & Mitze, 2014). The rate describes the “percentage share of persons living in owner-occupied dwellings in total population” (Meulen & Mitze, 2014). For example in France, 62 percent of the population lives in owner-occupied dwellings and 83 per cent in Spain (Meulen & Mitze, 2014). In Berlin, it is significantly lower with 16 percent, thereby the low- est in national comparison (Meulen & Mitze, 2014). A look at the map of Berlin’s districts and their average share of rental units shows that the rate is especially lower in the inner-city districts (see Figure 4).

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Figure 4. Share of rental units in Berlin districts in 2018. Extrapolation of Census data 2011 calculated by Berlin’s senate administration for urban development and housing. Source: Own figure based on Investitionsbank Berlin, 2020, p. 44.

The rental market is prominent for various reasons. One of them is the detailed national legal framework (Ger. Bundesmietengesetz) that clearly states protection as well as duties for tenants and for landlords. This goes hand in hand with a whole sector that has evolved around the rental housing market on a national level and more and more on an international level, too.

Figure 5 shows the current socio-economic development of several indicators for a five-year period with data representative for what has been observed in Berlin over the last ten years. The findings show that the disposable per capita income of households (light blue line) was forecasted to increase around 8.3 percent between 2013 and 2017 while the asking rents (dark red line) have increased by 24.5 percent in the same period (see Figure 5). This means that over the observed period, rents grew at a faster rate than income, thus increasing the proportion spent on housing. Additionally, the housing stock (yellow line) has grown by 2.6 percent while the population (dark blue line) has grown by 5.6 percent. Together with the trend towards single-person households, this indicates a higher demand

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than supply of housing units and has been identified as an important factor contributing to the increased rents (Investitionsbank Berlin, 2020).

Figure 5. Comparison of developments in Berlin, calculations for the 2018 IBB Housing Market Re- port. Source: Investitionsbank Berlin, 2018, p. 7.

The average rent price per housing unit in Berlin has doubled in the last ten years, changing and challenging many residents’ lives (Investitionsbank Berlin, 2018). The increased rent price level is a result of many different factors as presented in Section 3.2. Demographic trends such as a constantly growing number of residents, an aging society, as well as the growing number of single-person households put additional pressure on the housing market.

HOUSING POLICY HISTORY

Berlin has a rich history that has shaped the city and is still visible in urban landscape for example in prefabricated concrete estates as typical built environment in the German Democratic Republic (GDR). Since the beginning of the Weimar Republic, the topic of housing has been a central part of social politics (Hanauske, 2001). Especially after World War I, the supply of housing units was disrupted, and many citizens were homeless. The decreased quantity of residential properties was translated into the first rent cap bill in 1931 as an emergency act, based on the first tenancy law “Reichsmietengesetz” from 1922 (Deutscher Bundestag, 2018). In 1936, the bill was further expanded to freeze rents to keep them low. After World War II, the destruction of major infrastructure hit the housing sector [32]

again with around 40 percent of Berlin’s housing units being fully destroyed (Hanauske, 2001). Since Germany was divided between the four occupying pow- ers, the lack of housing was approached differently. The US, the UK and France were in charge of the three Western territories, founding the Federal Republic of Germany in 1949 while the Soviet Union in the Eastern territory was founding the GDR. Berlin was located at the joint of it, divided by two major geopolitical blocks and its housing policy was divided in two paths accordingly (see Figure 6).

Figure 6. Berlin’s sectors after WWII. Source: Neumann, n.d..

Both sides put high value on the topic of housing, using it as a tool to prove their strength in the Cold War. In East Berlin, the planning and construction of new residential properties happened quicker in the first post-war years until they ran out of construction materials that were, at the time, rather used for industrial progress than in housing construction (Hanauske, 2001). The rent freeze was renewed and kept in place until the German Reunification in 1990. The western part of Berlin was challenged by an economic crisis and high unemployment rates until they received funding through the Marshall Plan in 1950 (Hanauske, 2001). Further- more, there was a population growth due to refugees coming from the GDR (Egner, 2014). A new housing bill called “Wohungszwangsgesetz” was passed which banned terminations of existing rent contracts as well as introduced state-regulated rent levels. In the same year, a residential construction bill was passed where

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the government funded 3.3 million housing units all over Germany within one year, many of which were built in Berlin, in clear view for the GDR to see (Egner, 2014). While the rent cap was active during the reunification, social market economy picked up housing as market opportunity in the western part of Germany in the late 1960s and the importance of the mandate to provide housing declined in favour of economic values (Egner, 2014). The lack of housing was no longer an urgent issue thanks to the large investments in new construction and the growing population. Growing wealth also led to a new pillar of housing policy, promoting home-ownership (Ger. Eigenheimförderung) (Egner, 2014). From the mid-1990s onward, municipal governments followed the temptation to increase their income by privatising a large amount of their urban housing stock (Fields & Uffer, 2016). National and international property management companies, some of them listed on the stock market, took over, and municipalities lost grip on the fundamental housing infrastructure. This favoured market conditions for risk-seeking investors and financial instruments such as private equity funds (Fields & Uffer, 2016), often on an international level. In terms of accountability, globalised “investor-landlords” (Fields & Uffer, 2016, p. 1490) can be more challenging to work with than local landlords in social, political, and legal regards. Studies have shown that this development has “heightened inequality and often worsened housing conditions” (Fields & Uffer, 2016, p. 1497).

The recent history of Berlin’s housing market has been dynamic as previously described. Between 2016 and 2018, only 73 percent of the needed additional housing was built in Berlin and the majority is in the higher price segment (Investitionsbank Berlin, 2020). This sheds further light on the fact that the number of new residents is growing faster than the number of additional housing units. As reason for the mismatch in pace, the city of Berlin states that the constructions are not built overnight. They do not only demand for available plots of land and investors but also for skilled workers (Stiftung Lebendige Stadt, 2019). Another aspect of Ber- lin’s housing market, clearly visible in general in Germany as well, is that the number of publicly supported housing units, so called social housing, is heavily decreasing. Those units are a special kind of publicly funded housing aimed at providing housing for low-income households. To be eligible to live in these units, households must meet a number of characteristics, such as having a certain income level which is then checked on a regular basis (Bundesministerium des Innern, für Bau und Heimat, 2020a). The directives are valid on a national level. Publicly supported

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housing units are traditionally tied to public support for a certain period of time when they are built or taken under contract, often around ten years. If these ties are not renewed by the government, they will enter the regular housing market after this period and will be available for everyone. Many cities have missed out on renewing these ties, mostly due to conserving financial resources. Keeping them as social housing is simply more expensive (Moschke, 2019). However, they do provide an important resource for low-income households, especially in com- petitive housing markets.

These recent developments together with a growing amount of resident protests and pressure from the media have been followed by reactions of politics. One example is the bill for social conservation areas. Those so called “Milieuschutzzonen” are aiming to protect districts in the city from further privatisation by making it more difficult to transform rental units into condominiums (Moschke, 2019). Trans- formations are only allowed with a special permit. Critics say it slows down investments and is therefore harming the economic performance of these districts. A policy to protect tenants from disproportionally high rents are rent indices (Ger. Mietspiegel), evaluated and published on a local level (Sebastian, 2016). A rent index assesses local rent prices for new contracts in a five-year period and sets a rent level based on a specific calculation which then acts as the base for the maximum rent that can be charged in that specific area. Critics say that in local markets where the rent prices are increasing quickly, the maximum allowed rent level simultaneously increases, therefore not necessarily restricting rent price increases (Deschermeier et al., 2017). Building on the rent indices, the German Government introduced the national rent price control (Ger. Mietpreisbremse) in 2015 and up- dated it in 2019 (Henger et al., 2019). Valid for certain metropolitan areas in Ger- many with especially tight housing markets, such as Berlin, this bill restricts rents of newly signed rent contracts to a maximum of 10 percent more than the local average rent level (Deschermeier et al., 2017). Exceptions are recently built, and fully renovated properties.

3.5. CASE DESCRIPTION: BERLIN’S NEW RENT CAP BILL

The new rent cap bill was first officially discussed in summer 2019 in Berlin’s parliament, proposed by the city’s senate. It fits into the series of housing market regulations previously supported by the senate. The main reason for suggesting [35]

and implementing such regulations is the rapidly increasing rent price level, as previously mentioned. The experiences of other capitals such as London and Paris where housing has become a matter of financial speculation rather than a social necessity, were further motivation for Berlin’s senate. Furthermore, growing citizens’ protests and media coverage contributed to creating political pressure. Fig- ure 7 visualises the quoted rent average in Berlin’s neighbourhoods and the surrounding areas in 2019 with an average of 10.45 Euro per square meter. It shows that nearly all neighbourhoods in the central part of the city, marked by the circular line of Berlin’s S-Bahn, charge 12.00 Euro per square meter and more.

Figure 7. Rent price median of offered apartments in Berlin in 2019. Source: Own figure based on: Investitionsbank Berlin, 2020, p. 68.

Within around seven months, the senate went from agreeing on key points of the new bill in June 2019 to passing the bill in late January 2020 in a plenary session of parliament (see Figure 8). The bill has come in effect in two steps. In Part 1, the bill is applicable to new rental contracts only. From November 2020 on, Part 2 will add existing rent contracts to the list of applicable contracts meaning that rents

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might have to be lowered subsequently. In June 2020, four months after Part 1 came in effect, data has shown a decrease of the average rent level of five percent compared to June 2019 (Löhr, 2020). It remains to be seen what the long-term effects of the bill will be.

Figure 8. Timeline of Process of the new rent cap bill. Source: Own figure based on Berlin Senatsverwaltung für Stadtentwicklung und Wohnen, 2020b; Löhr, 2020.

With the new rent cap bill, landlords are only allowed to charge a certain rent price for rental units built before January 2014 for the next five years (MietenWoG Bln, 2020). Compared to the national rent price regulation (Ger. Mietpreisbremse, see Section 3.4), Berlin’s rent cap bill (Ger. Mietendeckel) goes further in regulating the housing market and affects 1.5 million units in Berlin (Berlin Senatsverwaltung für Stadtentwicklung und Wohnen, 2020a). First, it is not only valid for new contracts but also for existing ones, and second, it sets a certain amount of rent instead of referring to the rent index. The main function of Berlin’s bill, according to the politicians who created and voted for it (SPD Fraktion Berlin, 2020), is to slow down the rapidly increasing rent prices and to give Berlin’s residents a break from the fast pace of the housing market. By freezing the rents at a certain level, it put the normal market mechanisms on hold and does not allow for increasing rents in the near future. The bill includes exceptions such as an economic hardship provision, compensation for renovations, certain attributes, or equipment such as an elevator or a newly renovated bathroom, and the location of the unit with up to 1 Euro per square meter. Furthermore, the year of construction of the apartment plays a role (see Table 3). The hardship provision exempts landlords from the bill in case they are confronted with financial insolvency due to the decreased rental income. From 2022 on, an annual increase of 1.3 percent will be allowed.

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Table 3. Figure of maximum rent prices per square meter depending on year of construction and kind of heating facility. Source: Extract from MietenWoG Bln, 2020, p. 51.

No. Units’ first-time occupancy and equipment Rent price per m²

1 Until 1918 with central heating and with bathroom 6.45 Euro

2 Until 1918 with central heating or with bathroom 5.00 Euro

3 Until 1918 without central heating and without bathroom 3.92 Euro

4 1919 to 1949 with central heating and with bathroom 6.27 Euro

5 1919 to 1949 with central heating or with bathroom 5.22 Euro

1919 to 1949 without central heating and without bath- 6 4.59 Euro room

7 1950 to 1964 with central heating and with bathroom 6.08 Euro

8 1950 to 1964 with central heating or with bathroom 5.62 Euro

9 1965 to 1972 with central heating and with bathroom 5.95 Euro

10 1973 to 1990 with central heating and with bathroom 6.04 Euro

11 1991 to 2002 with central heating and with bathroom 8.13 Euro

12 2002 to 2013 with central heating and with bathroom 9.80 Euro

What differentiates this new regulation from other European examples is that in a second step, from November 2020 on, existing rent contracts are affected as well, which in some cases will lead to subsequent rent reductions (Knight, 2019). In case an existing rent contract charges over 20 percent more than the allowed amount, it must be lowered to this level. Figure 9 provides an overview about the content of the new rent cap bill.

Fact box: New rent cap bill • Valid for all rental units built before 01/2014, around 1.5 million housing units, site-independent • Does not include newly constructed units • Rents freeze on the level they were in 06/2019 • Exceptions are permitted for renovations (1€/m²) and special attributes • From 2022 on rents are allowed to rise 1.3 percent per year • Valid until 2025 • Introduced in two phases o Phase 1: Valid for rents of new rent contracts

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o Phase 2 (from 23.11.2020 on): Exceeding rents of existing contracts can be lowered

Figure 9. New rent cap bill summary. Source: Own figure based on: Berlin Senatsverwaltung für Stadtentwicklung und Wohnen, 2020a.

While the governing coalition is seeing this act as the only way to “calm down the housing market” (SPD Fraktion Berlin, 2020) and to counteract the process of commodifying housing units, the opposing parties are disputing the bill. They see the bill as a dangerous market intervention and argue that the state of Berlin does not hold the competence to pass such a bill. Therefore, they filed a lawsuit against it at the constitutional court in Berlin which is yet to be scheduled. While further investigating this controversy, in which the political parties are only a few of the involved stakeholders, it is important to keep in mind that the increased rent level is not only caused by financial speculations but as well by a clear lack of housing (see Section 3.1).

Currently, the situation is often described as uncertain, for tenants as much as for landlords. New rent contracts often include a paragraph stating that in case the rent cap bill will be proven as unconstitutional by court, the rent will be increased (Paul, 2020b). Newspaper articles are mentioning a significant decrease in average rent in Berlin. The data that this claim is based on needs to be handled carefully for several reasons. First, it was gathered by a private company offering housing adverts online, which means that the data only covers the ads posted on their webpage and therefore does not present the full market. Second, the bill has been in place for less than four months so the collected data cannot be seen as long- term data. A longer period should be covered to be able to draw valid conclusions. Further, the global pandemic of Covid-19 poses a special situation on the housing market and its role should be considered when analysing these numbers. Further outcomes, consequences, and juristic attributes of the bill can and will not be assessed in this work since the controversy around the bill is paramount.

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4. ANALYSIS

The subject of this study is the controversy around the new housing regulation bill in Berlin (see Section 3.5). Investigating the third research question “How are the stakeholders’ motivations overlapping or contradicting?” fits Venturini’s (2010, p. 262) description of a controversy because it aims to expose and understand the different points of view. Even more so, the introducing of this bill is an attempt to actively shift social inequalities concerning housing and thereby change social hierarchies (Venturini 2010) which makes the controversy more complex and fuels the discussion. Further reasons why this method is suitable for the controversy are elaborated in Section 2.3. Research question 1 “What are the stakeholder’s opinions on the new rent cap bill?” and 2 “What do stakeholders claim the outcome will be and why?” are necessary to be answered within the process of answering question 3. Therefore, the three research questions will not be investigated upon individually but rather within the 5 steps of controversy mapping based on Venturini’s work. The individual steps are strongly connected to each other, partly overlapping, and entangled. To make the process as transparent and traceable as possible, the separate steps are explained and visualised in individual sections. In the last section of this chapter, these steps will be combined, analysed, and overall findings summarised.

4.1. FROM STATEMENT TO LITERATURES

As a first step, statements around the case are examined to identify the “controversial arena” (Venturini, 2010, p. 266). This serves as a basic map of references about the case as well as a first assessment of related stakeholders’ opinions with overlaps and clashes. In addition to direct statements of actors, secondary data connected to the topic is reviewed for example to provide insights from previous research or public media channels.

THE THREE STATEMENT AREAS

There are many contradicting statements and claims that are framing the controversy and have been articulated by different kinds of actors communicating their opinions, perceptions, and estimations for the future in regard of the bill and its consequences. These claims are differently “loud” and appear in different forms

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and media depending on the actor and their possibilities in terms of communication channels. While most of the statements are published in written form on webpages or in interviews with for example newspapers, others aggregate their voices through in-person protests such as the one against the bill on the 9th December 2019 in Berlin, which was initiated by the alliance of Berlin’s construction and housing economy as well as property owners (Ger. Bündnis der Berliner Bau- und Wohnungswirtschaft und der Vermieter) (see Figure 10). Other examples for communication channels are debates and speeches in the Berlin county parliament (rbb, 2020) and panel discussions during conferences where experts in the field of housing exchange ideas and opinions. In one instance, a symposium was organised by the organisation Stiftung Lebendige Stadt (foundation vivid city) which physi- cally took place in 2019 in Bochum. There, the German housing market and Berlin’s rent cap bill were made subjects of discussion (Stiftung Lebendige Stadt, 2019). The choice of sources used for this analysis mirrors this mix of communication channels used by different actors.

Figure 10. Protests against the bill in Berlin 9th December 2019. Signs reading for example “Rent cap does not build apartments” and “Houses need roofs, not caps”. Source: Haus & Grund Berlin, 2019a.

While the rent cap bill (MietenWoG Bln, 2020) is the common subject of all of these documents, it became clear that “the chaotic nebula of competing statements” (Venturini, 2010, p. 265) can be mapped in three main statement areas framing the controversy (top column of Table 4). The statement areas are collectives of [41]

statements and claims which then further specify the positive and negative impacts. This will be explored further when having a closer look at the individual claims. Table 4 shows a sample of literature connected to the statement areas, chosen based on its proximity to the discussion. The statement areas are num- bered with 1, 2 and 3 which are not meant as a ranking between the statements but rather a simplification for further referencing. It is crucial to keep in mind that all statements are claims from actors, not proven facts. As previously mentioned, this study does not try to judge the stakeholders’ claims or to assess the consequences of the bill nor is there enough data available yet to do so, since the bill has been introduced only a few months ago.

Table 4. Statement areas about Berlin’s new rent cap bill and examples for directly connected literature.

Statement area 1 Statement area 2 Statement area 3

„The rent cap bill will have a „The rent cap bill will have a „The rent cap bill has pros positive impact. “ negative impact. “ and cons and can turn out - social - social both ways depended on…” - economic - economic - implementation - communication - monitoring

(Holm, 2019) (Sagner & Voigtländer, 2019) (Henger et al., 2019) (SPD Fraktion Berlin, 2020) (CDU Fraktion Berlin, 2019) (Kholodilin, 2018) (Die Linke Berlin, 2020) (FDP Fraktion Berlin, 2020) (Grüne Fraktion Berlin) (AfD Fraktion Berlin, 2019) (Berliner Mieterverein, 2020) (Haus & Grund Berlin, 2019b) (Vonovia, 2020) (Wohnungsbaugenossenschaften Berlin, 2019)

STATEMENT AREA 1

Statement area 1 claims that “the rent cap bill will have a positive impact”. This includes statements about social and economic impacts as well as either of these two. Connected literature to this statement area has been articulated in various forms such as published statements by the governing parties of Berlin and the rental union of Berlin (see Table 4). Actors supporting this statement claim that freezing the rents for the next five years will give Berlin’s residents a break from constantly increasing rents and the uncertainty of not knowing if they will be financially able to live in the city in the future (Berliner Mieterverein, 2020). In particular, low- to medium-income families are supposed to get improved access to rental units. Those in favour of the bill claim that it will slow down further [42]

exclusion of many households from the rental housing market due to economic reasons. Actors such as the Senate (Stiftung Lebendige Stadt, 2019) articulate their awareness that this bill will not close the supply gap of housing units in the city but that it is a necessary component until other measures are implemented.

A claim focusing on the economic well-being of Berlin as an economic location is that the reduced revenues for landlords (due to the bill) translate into an increase in available income for renting households. Currently, the share of a households’ income spent on rent has been increasing due to the fact that rents have increased but incomes have not in an equal manner (see Figure 5 in Section 3.4). House- holds’ available income after paying rent has therefore decreased and so has their purchasing power. This purchasing power is crucial for resident’s everyday lives and could be used to support local businesses or use in other discretionary ways. Therefore, the bill could function as a tool of redistribution of resources from the landlords to the tenants which could then not only have economic but also social impacts. Figure 11 summarizes the main claims of statement area 1.

OVERVIEW OF CLAIMS OF STATEMENT AREA 1

• giving Berlin’s residents a break from constantly increasing rent prices • easing the uncertainty of not knowing if they will be financially able to live in the city in the future • improved access to rental units for low- to medium-income households • not the solution for the problem of a lack of housing but a necessary component until other measures are implemented • increase in available income for renting households Figure 11. Overview of claims of statement area 1. Source: Own figure.

STATEMENT AREA 2

Statement area 2 claims “the rent cap bill will have a negative impact” on social and/ or economic matters. Connected literature to this statement area has been published by political parties forming the opposition in Berlin’s government, private property owners, and management companies (see Table 4). It has further been communicated by the protests described earlier. The common ground of the claims against the bill are that actors demand for the immediate removal or redaction of the bill itself. The different claims leading to this demand are as follows (Figure 12).

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One major claim is that Berlin’s senate does not have the authority to pass such a bill. Hence, CDU and the Liberal Party have together filed a constitutional complaint against the bill in May 2020 (FDP Fraktion Berlin, 2020). The legal conclusion by the constitutional court of Berlin is outstanding and it is unclear when to expect the final result. The background is that legally speaking, stakeholders claim that the government of the city state of Berlin does not hold the legislative power to pass such a bill and to overrule national rent regulation law (FDP Fraktion Berlin, 2020). Further, actors claim that the bill is in violation of the freedom of contract (Paul, 2020a). It is an ongoing discussion among experts in the field of law and will not be explored in depth in this work (see Deschermeier et al., 2017).

Another main argument is that the rent cap bill will not solve the problem of a lack of housing because it does not increase the quantity of available housing units (CDU Fraktion Berlin, 2019) and opponents claim the bill will do the contrary. By implementing a rent cap, some stakeholders genuinely believe that housing avail- ability will become scarcer. Supporters of statement area 2 expect the housing market will tighten due to the increased attractiveness of Berlin as a European capital with artificially low rents (Sagner & Voigtländer, 2019). From a social perspective, actors are concerned that low-income households will be further and even stronger excluded from the rental housing market. Although apartments are currently considered affordable for this group of residents, the increased competition on the housing market would likely allow landlords to choose the more pros- perous or financially stable applicant for the unit (Kholodilin & Kohl, 2019). Actors of this statement area claim that the economic drawback as consequence of this bill will covering many sectors. They assume that lower rents will lower the landlords’ income and therefore lower the investments in maintenance and renovations of the buildings (Stiftung Lebendige Stadt, 2019). In their opinion, this spans from local handywork firms losing clients to property developers no longer being interested in investing in Berlin (Vonovia, 2020). Further, opponents of the bill assume that the construction of new residential buildings is no longer attractive for investors and developers since the rent cap translates into a profit cap for them (Junginger, 2020). All in all, statement area 2 is concerned for Berlin to lose its attractiveness and thereby reduce economic prosperity for the region and its residents (Stiftung Lebendige Stadt, 2019).

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OVERVIEW OF CLAIMS OF STATEMENT AREA 2

• legally invalid, not going to withstand constitutional exam o side effect: uncertainty for landlords and tenants • the rent cap bill will not solve the lack of housing because it does not increase the number of housing units o building new units is the only way to solve the housing crisis • low-income households will be further and even stronger excluded from the housing market • economic drawbacks for several sectors, harming Berlin as economic location • construction of new residential buildings becomes unattractive for investors and developers • high expenses due to bureaucratic effort • decrease of property value • risk of transformation of rental units in condominiums

Figure 12. Overview of claims of statement area 2. Source: Own figure.

STATEMENT AREA 3

Statement area 3 is situated between the supporters and opponents of the bill, stating that “the rent control bill has pros and cons and can turn out both ways”. They claim that the consequences of the bill highly depend on how it is communicated, implemented, and monitored. Henger and colleagues (2019) pick up all these three aspects in their paper and state that the content of the bill must be clearly communicated, that the communication must be well organised and taking place according to specific needs of the individual target groups. This includes different information channels as well as accessibility. Further, the implementation of the bill has to be carried out in a clear and thought-out manner. Other researchers such as Kholodilin (2018) focus on the importance of monitoring and elaborate that impact and consequences of the bill on Berlin’s housing market must be assessed on a regular bases to understand the bill’s influence. Researchers such as Heumann (2019) stress the importance of calculation models which should be well- developed. What supporters of this statement area have in common is that they are communicating these claims in reports that claim to be rather neutral and scientific. They try to draw a general, objective picture of rent regulations and their consequences and by doing so, they make themselves actors in this controversy [45]

by contributing arguments to the discussion. Figure 13 provides a summary of the claims of statement area 3.

OVERVIEW OF CLAIMS OF STATEMENT AREA 3

• communication to tenants and landlords needs to be well organised and according to the individual target group • the implementation of the bill must be carried out in a thought-out manner • the impact and consequences of the bill on Berlin’s housing market must be monitored and assessed regularly

Figure 13. Overview of claims of statement area 3. Source: Own figure.

All three statement areas and their connected literature are related to and dependent on stakeholders of the new rent cap bill. To explore the controversy further, these stakeholders and their relations to each other are the topic of the next section.

4.2. FROM LITERATURE TO ACTORS

There is a “web of relations” (Venturini, 2010, p. 266) around every claim which sheds light on the actors involved. Actors are defined as entities whose existence or non-existence make a difference in the discourse and whose absence would be recognised by other actors (Venturini, 2010) and this “web” is a metaphorical ex- pression to emphasise the interconnections on related issues. Actors are never isolated and “always composed by and components of networks” (Venturini, 2010, p. 266). Even though actors and networks go hand in hand, their specifics and descriptions are presented in two sections in this work. First, the focus will be on the different actors to establish a base, followed by the investigation on the networks with their dynamics and characteristics in Section 4.3. It is important to keep in mind that actors can be human and non-human, and that they should all be considered in the same manner (Venturini, 2010). Since the controversy about Berlin’s new rent cap bill is complex and dynamic, the list of actors can be composed in various ways, depending on the angle of investigation. For this study, 18 actors have been distilled from the literature which aims to resemble the core of the discussion (see Table 5). The rent cap bill itself is an example for a non-human actor while individual tenants and shareholders are examples for human actors. Political parties and property management companies can be categorised as “legal [46]

persons” or “legal bodies”. For this study, they are seen as collectives of humans acting as one voice in this controversy. It is crucial to keep in mind that the mentioned actors and their opinions and claims symbolise the most prevalent and pre- dominant for this group of individuals. It is based on what is communicated directly, indirectly, and what is perceived to be the average standpoint of this group based on the literature.

Table 5. List of actors, their roles, and the statement areas they support.

NO. ACTORS ROLE STATEMENT AREA

1 Rent cap bill Law ------2 SPD Fraction Berlin Political party 1 3 Green Party Fraction Berlin Political party 1 4 Left Party Fraction Berlin Political party 1 5 CDU Fraction Berlin Political party 2 6 AfD Fraction Berlin Political party 2 7 FDP Fraction Berlin Political party 2 8 Listed Housing Companies Private company 2 9 Shareholders Participators in private company 2 10 Craftspeople Private business 2 11 Private Landlords Civil individuals 2 12 Owners Association Collective of private landlords 2 13 Tenants Civil individuals 1 14 Rental Union Collective of tenants 1 15 Public Housing Companies Public company 1 16 Cooperatives Company owned by users 2 17 Senate Collective of political parties 1 18 Opposition parties Collective of political parties 2

As elaborated by Venturini (2010), actors are networks and networks are actors. Actors and networks are interdependent and can be defined as either of them, depending on the perspective. The actors listed in Table 5 could be further decomposed, for example by listing the individual listed housing companies. Actor 1, the rent cap bill, is understood as actor from the date on that it is in effect. Actors 2 to 7 are members of the political parties that were voted into office and are forming Berlin’s parliament. These groups of voted members are officially called ‘fractions’ to clarify that it is a regional segment of the national party; in this study these members will be referenced by their abbreviations SPD, Green Party, Left Party, CDU, FDP, and AfD. Even though there is a greater organisation (the party itself)

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behind them, these individuals are the ones who discussed, voted, and passed the bill. The fact that the fractions consist of individual members and is part of a bigger actor, the party in general, is one example how actors consist of several layers and can be composed to bigger entities and decomposed to smaller ones.

Actor 8 resembles housing companies listed on the stock market and are private businesses, for example Deutsche Wohnen SE and Vonovia SE. They function as landlords and are responsible for the condition of the properties. Listed housing companies usually work revenue-orientated and are partly owned by shareholders (Actor 9) who are interested in the companies’ performances and their profit participation. The term craftspeople for Actor 10 includes businesses and corporations that are hired for renovations and maintenance work as well as construction companies hired for new housing construction. These can be small local businesses such as painters, or mid-size general contractors that manage the entirety of the construction or modernisation project. Actor 11, private landlords, are private individuals who rent out housing units that they own. These can be single units or several units in one or several properties. Private landlords own rental units out of different reasons. If they are not aiming to make a profit, they play an underlaying role in this controversy. For reasons of modelling and simplification, the focus is on those private landlords who on average see rental units as an investment. The important characteristic is that they are not organised as a cooperation and many of them have invested in housing units for it to function as a pension scheme (Fröhlich, 2019). Most of them are members of the owners association (Actor 12) Haus&Grund Berlin (Haus & Grund Berlin, 2019a) which represents their interests and functions as a collective voice. Actor 13 are the tenants of rental units in Berlin. Many of them are organised in the Rental Union (Actor 14) which is the equivalent to an owner’s association. Although not all tenants are organised in the Rental Union, it can still be assumed that their rights and interests are represented. Public Housing Companies are Actor 15, such as Gewobag (Gewobag, 2020). They are municipal companies which means that they are run by public funding. They function as landlords by maintaining properties and collecting rent. Actor 16 are the cooperatives which are organised as Wohnungsbaugenossenschaften Berlin (Die Wohnungsbaugenossenschaften, 2020) and follow a special form of ownership for properties. Coops are another actor that functions as landlords and that takes care of maintenance and renovations. Tenants living in co-op units must be members of the coop and thereby own a share of the residence itself. They often have not

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had any major rent increase in decades and typically work on a cost-covering base. They become visible in the controversy as the ones who feel punished without overcharging tenants (Wohnungsbaugenossenschaften Berlin, 2019). For co-op actors, the new rent cap bill means a high amount of bureaucratic work because they have to decrease the rents further in certain neighbourhoods which is why they are not in favour of the bill (Wohnungsbaugenossenschaften Berlin, 2019).

Some of the actors of Table 5 form new actors and networks when they merge together as a formally organised group while others form a group of interest because they have opinions or statements in common (see Figure 14). SPD, the Green Party and the Left Party form the senate of Berlin’s parliament, is an alliance based on a formal contract. The senate is considered as Actor 17. The parties agreed on a coalition contract which means they have a common political ground and they govern the city state together. This is the actor that is mainly responsible for the introduction of the new rent cap bill. CDU, FDP, and AfD are the opposition parties. They do not officially form a group, nor have they articulated common goals or signed a contract comparable to a coalition contract. However, they do have major claims and statements against the rent cap bill in common which is why they will be further referred to as the opposition, Actor 18.

Figure 14. Senate and opposition of Berlin’s parliament. Source: Own figure.

The understanding for the different actors involved and their opinions and claims on the new rent cap bill allow to further investigate their relations and connections to each other. Hence, the next section focuses on formed and decomposed networks as well as actions that lead to these constellations.

4.3. FROM ACTOR TO NETWORK

Actors are crucial components of networks; in addition, actors are also formed by their own networks (Venturini, 2010). Interactions and relations shape actors, just as actors shape these relations. Therefore, they come together in dynamic

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constellations that are continuously established and changed. According to Latour (2004), these actor-network changes are very important and should be empha- sised. Controversy mapping allows for changing constellations as well as recogniz- ing the forming and decomposing of them in the ongoing process of a controversy which depends for example on what aspect of it is discussed (Venturini, 2010). In this section, the connections between actors and their actions are examined (Venturini, 2010, p. 267). In referencing the list of actors compiled in Section 4.2, it is possible to map the links between the actors and their actions. Figure 15 was created with the software Gephi and shows the actors as nodes and the connections between them as lines. To provide a simple understanding of the networks, this map mentions the parties individually and does not provide information about the proximity of actors or the kind of relation they have. Though it does provide important insight on the intertwined ideas of the controversial rent cap bill. Not every actor is connected to all the other actors. For example, shareholders are only connected to listed housing companies as they hold shares of these companies and demand to participate in the profits. This does not mean that shareholders are never connected to any of the other actors. But from this study’s point of view, they are mainly related to listed housing companies and their interests. Another example for links shown in Figure 15 are the political parties which are all connected to each other because they all work in the parliament.

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Figure 15. Network with unweighted links. Source: Own figure.

Further research and analysis showed that connections between actors are of various strengths. Some actors are connected directly while other actors are connected rather indirectly to the rent cap bill. To assess the strengths of the connection, the literature was scanned for references to other actors, and for descriptions of these relations. For example, Decker’s (2018) results about typical voters was considered to weigh the connection between partier. Another example is the fact that tenants and landlords are connected through rental contracts which gives the Rental Union a strong connection with the Owners Association, Listed Housing Companies, Public Housing Companies, and Cooperatives. This step of the analysis enables to weigh the connections between the actors. The results are shown in Table 6. Average connections are marked with ‘X’ and strong connections with ‘O’. The classifications are based on the degree of influence on each other so without a specific direction. Connections are not marked twice, which is why there are empty boxes in the table. The other reason for an empty box is that there is no

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direct connection between these actors. Examples how to read the table are given below:

• The opposition party cannot have a connection with itself (empty box). • The senate has an average direct connection with the opposition parties and the other way around (X). • The Rental Union has an average direct connection to the opposition parties and the other way around (X). • The Owner’s association has a strong direct connection to the opposition parties (O).

Table 6. Overview actor’s connections in network.

LHC)

(

(PHC)

(OA)

(OP)

(RU)

(RCB)

(COOP)

(S)

Actors

FDP

AFD

SPD

CDU

Tenants

Left PartyLeft

Senate

Green Party Green

Craftspeople

Shareholders

PrivateLandlords

RentalUnion

Rent cap bill cap Rent

Cooperatives

Opposition Party Opposition

Owners Association Owners

Listed Housing Companies ListedHousing Companies PublicHousing

OP X X O X O X X O O O O

S O X X O X X X O O O

RU O O O O O O

OA O X O

LHC O X O

PHC O X

RCB O

COOP X

To visualise the data shown in Table 6 more clearly, the connections were mapped in Gephi (see Figure 16). Average connections (X) are shown as thin lines and strong connections (O) with a thick line. Additionally, the actors are organised differently than in Figure 15, by visualising senate and opposition as connection to

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the other actors, and the individual political parties are connected to either the senate or the opposition parties alone.

Figure 16. Map with weighted links. Source: Own figure.

Since the strength of the links between the actors is mainly influenced by actions, it is worth having a closer look at these actions. Groups of actors form and decom- pose and instead of focusing too much on only the network or the actors, ANT is more interested in the relations of actors and changing constellations. One perspective on the controversy around the rent cap bill is visualised in Figure 17. The bill itself is located in the centre, because without it this specific controversy would not unfold. The bill is surrounded by other actors which themselves are networks, too, consisting of several actors interacting with each other in one way or the other. The arrows are directed from a source towards a target on an influence one actor could have on the other. This is not to be understood as claims about the consequences of the bill but as a translation and combination of stakeholders’ [53]

opinions and claims to show their complexity and entanglement, based on the previously collected data. In fact, this controversy is part of a bigger discourse around the lack of affordable housing, possible housing policies, and who a city desires to have as residents to only mention a few examples. When looking for arguments, actors often bring in other aspects such as other housing policies, and measures. Figure 17, provides an alternative organisational layout of the previous actors, their roles, associated affiliations, and connections between themselves.

Figure 17. Connections and actions in the Network. Source: Own figure.

To start with the root of this controversy, Berlin’s senate (light blue box) created the rent cap bill. The senate acted so as they were voted into office by Berlin’s residents. Without this senate, more specifically with this composition of the senate, the rent cap bill would not exist in this form and shape. In the other direction, the rent cap bill might have a major influence on the political position of this senate. The same goes for the opposition parties in Berlin’s parliament (orange box). Depending on how the rent cap bill performs and is perceived by Berlin’s voting residents, it could maintain the current political constellation or make a challenge out of the re-election and increasing the chances for the other parties in 2021. Berlin’s parliament (grey box) passed the bill through a democratic vote, having established the bill as a new law. On the other hand, this bill comes with expenses

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of public funds which are distributed by the city state parliament (ex. for additional administrative work force). The situation comes further with costs for the implementation, communication, and monitoring of this bill.

Another major influence the bill has on actors and networks its influence on work- load, profits and actions. Take, for example corporate landlords. This actor is a dynamic network of private housing companies and their shareholders, public housing companies and cooperatives. For landlords, the performance of the bill is likely to have an impact on their revenues. An actor that is indirectly influenced by the bill are private businesses and craftspeople that are specialised in for example maintenance and renovations as well as the construction sector. If one believes the opponents of the bill, decreased rent incomes will result in less renovations of buildings and in a slowed construction of new housing units. This consequence results in an indirect influence of the bill as it is up to the owners of the buildings or units how much resources they want to pour into these apartments.

In general, the controversy is a “emotional, polarised situation” which is discussed in a heated manner (Stiftung Lebendige Stadt, 2019). Many of those discussions have taken place during plenary sessions of the city state parliament where the different political parties have articulated their claims and opinions. For example during the session on the 30th January 2020, members started insulting each other based on their ideologies and believes (rbb, 2020). It fits to Rip’s impression of the situation, honorary president of the German Rental Union, stating that it seems like ideologies are more prominent than reason in this controversy (Stiftung Lebendige Stadt, 2019). To generate a greater understanding for the emotional layer of this controversy, it is crucial to investigate stakeholders’ motivations, values, and ideologies.

4.4. FROM NETWORK TO COSMOSES

This step focuses on the importance of ideologies behind statements and actions of different actors, which are called cosmoses (Venturini, 2010). Different actors believe in different truths and bigger visions outside of the controversy are steering their actions. Every actor has a certain vision that it is aiming to establish which is why the reasoning and motivation behind claims and statements is crucial to study. One example for this is the one given by Venturini (2010), that fighting

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modernisation could originate from the desire to maintain traditions. Therefore, it is important to understand which different meanings actors attribute to statements and actions , while also understanding their deeper aims (Venturini, 2010, p. 267). Since values and inner visions are often not specifically articulated, it is crucial to read between the lines, for example by using Bacchi’s (2009) WPR method, and to find evidence in other sources. Taking a closer look at values and ideologies is crucial to understand what motivations can be found behind different claims and statements. This is then followed by an analysis of the overlap and contradiction of stakeholder’s motivations to add more depth to the controversy map.

4.4.1. VALUES AND IDEOLOGIES OF ACTORS

To be able to compare and relate the actors’ values and ideologies, they are first examined individually to then be put in relation to each other. For the actors that are political parties, a look at their self-perception as well as at their typical voters provide insight on their motivations. The following descriptions are based on the national level of the parties, assuming that the state level of the party is consistent with it. Compared to the well-researched landscape of political parties, values and ideologies of tenants and landlords are more challenging to depict. Therefore, the standpoints of the rental union as well as the owner association are consulted for more insight on private owners and landlords. The cosmoses of corporate actors such as listed housing companies are then analysed individually.

POLITICAL PARTIES

In Berlin’s parliament, there are six different political parties (see Figure 3). The parties forming Berlin’s senate are of different origin yet have enough in common to agree on a coalition contract with each other. The SPD considers itself as social democratic party. Even though it was founded 150 years ago, and its tack has changed over time, the basic values of the party have stayed the same – liberty, justice, and solidarity (Decker, 2018). Its traditional voters are working class citizens with a clear interest in social security and employee rights. The Left Party has its roots in the socialist party of the GDR but has gone through several changes (Decker, 2018). What it kept is the critical standpoint towards capitalism and it is therefore challenging profit-making economic habits. The Left Party is traditionally strong in former GDR states which shows in it being the second strongest party in

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Berlin’s parliament. The Green Party is relatively young with its first appearance in the federal government in 1983 (Decker, 2018). It was founded out of protest against environmental destruction and protests against nuclear power (Decker, 2018). It is described to have a pacifistic, moderate left orientation and a focus on environmental reforms and challenges. It has an above average support from young and female voters. As these three parties act together as senate there is an additional layer, the political risk it is taking by introducing a bill that is not well received through all layers of the population. Depending on how successful this bill is, the parties forming the senate might be winning or losing votes in the next election (upcoming in 2021). So, there are voices claiming that the senate only took this step to please the crowds who are protesting for a more just housing market, though it is risky to do it only out of this interest. When using Bacchi’s WPR-approach to analyse the bill (MietenWoG Bln, 2020) which was created by the senate, it sheds light on several aspects. The “problem represented to be” is the lack of affordable housing in Berlin and underlaying assumption of this bill, presupposed by the senate, is that a rent cap could help solve this problem. What is left unproblematic in this ‘problem representation’ is how to conduct the bill and what it means for the public offices, number of potential lawsuits, and landlords. How the ‘problem’ can though differently and be questioned becomes clear when looking at opposing actors’ statements, for example the opposition parties.

The opposition parties do not have a coalition contract which means that they have not officially agreed on values. What they share is the motivation to receive more votes in the next election so they would be part of the senate in the next term. This political drive is considered a major motivation for actions. The CDU is a conservative, liberal party that holds the term ‘Christian’ in its name which is not practiced upon anymore but considered as part of its identity (Decker, 2018). The party is considered anti-socialist and is aiming to secure the competition on the market. It receives an above average support from self-employers, pensioners, and civil servants (Decker, 2018). Underrepresented in its groups of voters are working class citizens. The Liberal Party FDP is focused on very liberal economic views while having a rejective stands towards European and migration politics (Decker, 2018). It is in favour of an economic market as free and unrestrictive as possible and it gets an above average support from high-income voters as well as young, and male voters. The AfD was founded in 2013 and has strong conservative socio-political views with a clear restrictive position towards migration (Decker,

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2018). While having a liberal economic standpoint, it has an anti-establishment orientation and is making use of right-wing populism. It is above average supported by voters with high dissatisfaction figures and a proximity to extreme right- wing orientations (Decker, 2018). The opposition parties share the aim to dereg- ulate the housing market and to take action against the bill. The analysis of literature published by the opposing parties shows that they rather see the ‘problem represented to be’ in the regulation of the market and that, if there were no more regulations added to the already existing ones, the market would solve itself (CDU Fraktion Berlin, 2019; FDP Fraktion Berlin, 2020). This would also protect revenue plans and attract investors, following a liberal economic approach.

TENANTS

When it comes to identifying the motivation for the tenants’ opinion of the bill, the literature shows that one point stands out: the desire to maintain the ability to afford housing in the city is incredibly strong. The continuously increasing rent prices have become an existential threat to many of Berlin’s citizens that are living in rental units (Henger et al., 2019). Many bottom-up initiatives have been engag- ing in revealing the severity of the situation of Berlin’s housing market and demanding for political actions for years. The value Berlin’s tenants put on the social function of housing is very high and their demand for changes in ownership towards a public one has been clearly articulated in various forms. One example in an initiative that aims to expropriate large listed housing companies and change the ownership status to publicly owned properties (Bockenheimer, 2019). Its pe- tition for a referendum was very successful and well-received by many residents. The referendum will take place in 2021 and is substantiated by the presence of the topic of housing in Berlin. When speaking of tenants, it is worth mentioning that there is a significant number of international inhabitants in Berlin, long-term as well as short-term (Investitionsbank Berlin, 2020). This group of residents is often not organised in associations such as the tenants’ union nor allowed to vote in Berlin’s elections. Therefore, they might not be participating politically but they are benefiting from the bill, nonetheless. Their values and motivations are assumed to be like the ones of the average tenants.

PRIVATE LANDLORDS

As previously mentioned, there are different types of property owners acting in this controversy. Their common feature is that they charge rent instead of paying [58]

rent, meaning that, in an unregulated market, they are the ones deciding on the rent price. In this decision, they are influenced and maybe even pressured by different factors such as increasing maintenance costs. But in the end, they are setting the rent. It is important to mention that not all private landlords are charging very high rents and are giving in the temptation to make big profits. Some have not had any major rent increase in decades and work on a cost-covering base or to fulfil the plan for their pension scheme. Property owners often feel mistreated by this bill since they often charge significantly less than the average rent and still, they need to lower the rent now even further (Fröhlich, 2019). Many owners claim that they are not capitalists which is interesting because they are still making use of the market. In the end, their ideologies and values may be very diverse but most of them do have in common that they want to generate at least some profit out of the rental incomes. And the owners association Haus&Grund Berlin (Haus & Grund Berlin, 2019a), which represents many of Berlin’s private landlords, formu- late concerns about reduced rental incomes.

ENTREPRENEURIAL ACTORS

Several actors in this controversy are firms and companies of different sizes and forms. Their common ground is that they are offering services and goods closely related to rental properties. Listed housing companies are big private businesses that are listed on the stock market, for example Deutsche Wohnen SE and Vonovia SE. They own a large number of housing units and function as landlords which makes them responsible for the condition of the properties. Listed housing companies generate revenue when rental incomes are higher than their costs. This revenue-orientation is a major aspect in this controversy and is a clear indication for the liberal, economic standpoint of this actor. Listed property companies are partly owned by shareholders who are interested in the companies’ performances and their profit participation.

Other forms of landlords are public housing companies, such Gewobag (Gewobag, 2020), and cooperatives, such as Wohnungsbaugenossenschaften Berlin (Wohnungsbaugenossenschaften Berlin, 2019). They both act in a cost-covering manner and pursue the common good. They are not classical economic market participants because their organisation and funding in contrast to common business is focused on public ownership, for example by a municipality or a larger number of owners in a cooperative. Their focus is on the social function of housing

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and they are aware of the importance of affordable housing. For example, cooperatives are not charging very high rents and have not had major rent increase in decades and still the rent cap bill influences their approach. Their self-perception is based on social responsibility and high tenant participation (Wohnungsbaugenossenschaften Berlin, n.d.). For them, the new rent cap bill means a high amount of bureaucratic work as they have to decrease the rents further in certain neighbourhoods resulting in feeling punished without overcharging tenants (Wohnungsbaugenossenschaften Berlin, 2019).

Businesses of craftspeople range from small self-employed businesses such as painter and carpenter, to bigger construction companies that are hired to build new properties. As mentioned before, they are not directly affected by the bill, but their order situation highly depends on how much property owners invest. On average, they are interested in keeping a good order situation and they are part of the economic market as they offer their goods and services there.

4.4.2. OVERLAPS AND CONTRADICTIONS

The stakeholders of this controversy have some of their visions in common and some visions are very contradicting. What all stakeholders claim is that they want what can be summarised as “the best for Berlin”. This can mean very different things such as the best for Berlin’s residents, the best for Berlin’s economy, the best for Berlin’s future. Some might say that these things are closely connected to each other. When the economy is booming, Berlin’s citizens are benefiting from it. In reality, it is not that easy. First, one could ask the best for which residents? Do actors distinguish between financially stronger or weaker households when they talk about this aim. Do they speak about their voters as target group while having the next election in mind or do they thoroughly care for all the citizens? If one would ask this question to a politician, it is unlikely to get an honest answer. Or maybe even if they answer truthfully, no one could know what personal or political goals are steering them. Therefore, this analysis is conducted carefully and should be taken as estimation and tool to understand the complex and dynamic controversy better. Table 7 visualises the overlaps and contradictions of the stakeholders’ motivations to be in favour or not in favour for the rent cap bill.

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Table 7. Actors and their ideologies, motivations for their standpoint, and bigger vision outside of the Controversy.

MOTIVATION FOR STANDPOINT AND BIGGER VISION OUT- ACTOR IDEOLOGY SIDE OF THE CONTROVERSY Liberty, social justice, soli- • Strategic political interest SPD darity • Affordable housing for everyone • Strategic political interest Green party Moderate left • Affordable housing for everyone • Strategic political interest Left party Socialist • Anti-capitalist system • Strategic political interest Conservative, liberal eco- CDU • Fear of negative consequences for landlord, businesses, nomic views and Berlin Strongly conservative, lib- • Strategic political interest AFD eral economic views, anti- establishment orientation • Strategic political interest Very liberal economic FDP • Fear of negative consequences for landlord, businesses, views and Berlin • Affordable housing for everyone Tenants Social • Right to the City • Strategic economic interest Private land- Diverse • Fear of negative consequences for rental income lords • Feel mistreated and wrongly punished by the bill Listed housing • Strategic economic interest Very liberal economic companies & • Fear of negative consequences for rental income, reve- views shareholders nue, and business performance • Strategic economic interest Craftspeople Entrepreneurial • Fear of negative consequences for order situation • Affordable housing for everyone Cooperatives Entrepreneurial • Feel mistreated and wrongly punished by the bill

One major observation refers to the statement areas mentioned in Section 4.1. The clash between social and economic approaches becomes clear in several sources such as the interview with social scientist Andrej Holm, researcher in social sciences, and Michael Voigtländer, an economist with a focus on real estate. Holm supports the rent cap bill due to the lack of housing in urban areas and drawbacks of it on an individual levels while Voigtländer opposing the bill and stresses the market mechanisms and the macro-level (iwd, 2019). In Voigtländer’s (2014) and other economists’ opinion (Stiftung Lebendige Stadt, 2019) rent prices are an important control tool on the housing market the rent cap bill silences this tool, leav- ing the market without clear price signals.

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As researcher deliver arguments for other actors in the controversy, they play a crucial role in the debate (see Section 4.2). They are not only trying to shed light on the issue but are also strengthening some of the other actors by supporting their standpoints with what seems to be scientific facts. Research is bias means that there is a part of it that is subjectively influenced which is why it is very important to be attentive to funding and backgrounds of authors as well as target groups of their texts. The fact that written texts can be interpreted in a certain way means that their texts might as well be used for a purpose the author was not intending it for or by actors he or she was not writing for.

In general, the perception of the bill highly depends on the bigger believes outside of the controversy. On the one hand, the risk of decreasing revenues unites actors such as the owner association, listed housing companies, and business owners. And the opposition parties are sharing this concern and see the city state’s location value at risk. On the other hand, tenants have been mobilised to raise their voices for a more just housing system in Berlin. The senate’s step to take action in form of this rent cap bill is seen as a consequence of the growing pressure from Berlin’s residents. Therefore, the motivations of tenants and the senate are strongly connected and mutually dependent.

4.5. FROM COSMOSES TO COSMOPOLITICS

The findings from the previous steps are brought together to create a holistic picture of the controversy instead of only “mirror” the situation (Venturini, 2012, p. 797). This goes hand in hand with answering the research questions of this study. The stakeholders’ opinions of this study can be summarised in three cate- gories to answer research question 1 “What are the stakeholder’s opinions on the new rent cap bill?” and helps answering research question 2 “What do stakeholders claim the outcome will be and why?” and 3 “How are the stakeholders’ motivations overlapping or contradicting?” as well.

The political parties forming the senate (SPD, Green Party, Left Party) as well as the Rental Union representing the tenants, and certain researchers such as Holm (2019) are in favour of the new rent cap bill and claim that it will have a positive impact on Berlin’s housing market in terms of supporting tenants’ rights and opportunities. They are expecting the new rent cap bill to be the first step to relax Berlin’s rental housing market because the rents are not allowed to further increase. Further, they argue for their standpoint by saying that there are details in [62]

the bill which cover several and possible scenarios. For example, landlords who can prove that they are financially highly dependent on the rental income will be all granted exceptions from the rent freeze. Another argument of this group of actors for a positive impact of the bill is that properties built after 2013 are excluded from the regulation which they hope will help to keep the housing construction going. Actors supporting the bill are in general interested in enable citizens of all financial background to live in the city. The social function of housing is priori- tised in their opinions. For the tenants, the findings of this study suggest that the social aspect of housing is the major motivator for their opinion and claims. For the political parties, the social aspect is important, but it is accompanied by a strategic political interest to stay in office.

Stakeholders who are not in favour of the bill are the opposition parties (CDU, FDP, AfD), all kinds of landlords such as listed property owners and the owners association who is representing private landlords, and economists such as Sager and Voigtländer (2019). They all claim that the rent cap bill will have a negative impact on the city of Berlin and its citizens. They share the main argument that it will decrease the landlords’ income in a way that it will slow down renovation and maintenance activities as well as new construction because investors do not see revenue opportunities with the rent cap bill in place. They claim that the attractiveness of the location Berlin will strongly decrease in attraction. Therefore, they demand to tackle the housing crisis with new construction of housing units instead of regulating the market. This belief is strongly motivated by a liberal economic view. Additionally, the analysis suggests that landlords have a strategic economic motivation because they fear for their rental incomes: private landlords planned for their personal pension scheme or listed housing companies calculated with for bigger investments, and bottom lines might not be met. The opposition parties seem to have strategic political interests in addition to the above-mentioned beliefs as they aim to strengthen their political positions.

Supporters of the third statement area have a neutral position in the controversy and claim that the rent cap bill can have positive or negative impacts depending on how it is implemented, how it is communicated, and how its process and consequences are monitored. This position is occupied by researchers such as Kho- lodilin (2018), and Henger and colleagues (2019) who do not necessarily have a strategic motivation except for pointing out the importance of context and

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concomitants. The learnings about their opinion and claims are an important ground to discuss the rent cap bill on a more objective level.

5. DISCUSSION

The results of the analysis provide insights on the controversy that are worth considering since they raise further questions. In this section, these insights, such as unfolding uncertainties and an outlook, including future actions recommended by different actors, are collected to do justice to the controversy’s complexity. To approach this study holistically, the aim includes thoughts on the future development and possible further research.

5.1. UNCERTAINTIES

During the analysis, it became clear that there are several uncertainties connected to this controversy. First, there is juristic uncertainty based on the fact that the new rent cap bill is considered unknown juristic territory (SPD Berlin, 2019). It keeps both tenants and landlords in the dark until the constitutional court has decided if the state has the legislative competence to pass such a bill and that it is not in conflict with national law. Actors such as the opposition parties are responsible for the lawsuit and therefore fuelling this juristic uncertainty. Conse- quently, so-called “shadow rents” (Ger. Schattenmieten) have emerged, meaning that landlords include two different rental fees in new rent contracts (F+B Beratung für Wohnen, Immobilien und Umwelt GmBh, 2020a). One rental fee is in accord- ance with the rent cap bill and one is the rental fee that would become due in case the court calls the bill unconstitutional. The differential amount can reach double as much. According to legal experts, the answer to the question if this formulation of a contract is legally allowed and if it would be possible for the landlord to request the differential amount subsequently differs from case to case. Interestingly, the Bavarian constitutional court decided to overrule a request for a comparable rent price regulation in July 2020 (Handel, 2020).

Another point of uncertainty is of political nature. Since Berlin’s government is elected every five years, it is not certain that the current senate will continue to

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govern after the next election. In the event that the parties that oppose this bill take over, Berlin’s housing politics would likely change as well.

A third of uncertainty is the bill’s usefulness. There is no absolute guarantee that the bill will help solve Berlin’s housing crisis. As mentioned, even by actors in favour of the bill (rbb, 2020), the bill does not create new housing units which are clearly needed when looking at the demographic changes. The bill addresses aspects that remain untouched by housing policies and is protected by constitutional law – the freedom of contract. In general, landlords are free to choose the tenants for their rental units, as decided by their own list of criteria. In tight housing markets, such as the one in Berlin, it is not uncommon that a full tenant application folder, complete with motivation letter and bank statements is requested from the applicants for an apartment (Henger et al., 2019). One of those criteria is to prove a stable and considerably income which undoubtedly discriminates against low- income households. This type of tenant-picking can reinforce discrimination and segregation in a city. Furthermore, some landlords chose individuals who recently migrated to Berlin because they are not familiar with their rights yet. This lack of transparency takes advantage of and puts apartment-seekers at higher risk for unfair living conditions.

General uncertainty plays a role as well. Unexpected situations such as the global Covid-19 pandemic in 2020 have shown that there are always unforeseen conditions in the housing market. The pandemic has shed light on the importance of housing as private shelter. Even though first studies show that it did not have a major impact on Germany’s housing market (F+B Beratung für Wohnen, Immobilien und Umwelt GmBh, 2020b), it is still likely that it exacerbates the controversy because both tenants and landlords may suffer from the economic down- turn that this pandemic has caused. When tenants, and landlords, are restricted in their income, tenants might have increased difficulties to pay rents, and private landlords might be financially dependent on the rent payments. This is likely to reinforce their standpoints in the controversy or make them even more extreme.

The mentioned uncertainties affect all stakeholders, but direct impacts are largely felt by tenants, landlords, and the construction sector. In a field like housing construction where projects and new properties typically take several years to be developed, planning reliability is key. A lack of planning reliability can decrease a location’s attractiveness for investors (Stiftung Lebendige Stadt, 2019). The same

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goes for private individuals who consider investing in properties, for example as a part of their long-term personal pension schemes.

5.2. OUTLOOK

The timeliness and popularity of the topic of housing issues in metropolitan areas demand for a further action. As previously described, it is challenging to prognose the future, but it is worth giving thought to approach the topic itself in the future and in other contexts. Recommendations mentioned by stakeholders are exem- plary summarised in this section. Further, the transferability of this study and ideas for future research are presented.

RECOMMENDATIONS MENTIONED BY STAKEHOLDERS

As the literature has shown, many stakeholders have their own ideas about how the housing crisis should be handled. An understanding of potential steps for stakeholders to take start working together not against one another (Stiftung Lebendige Stadt, 2019) is an important part of reading the controversy’s map. In terms of communication and monitoring, to get grasp of the uncertainties mentioned earlier, and to be able to assess the new rent cap bill to the fullest, stakeholders stress the importance of keeping track of the bill’s influences and consequences over time. Several scholars who have researched the topic of housing regulations , such as Kholodilin (2018), suggest implementing a well organised monitoring and measuring system and a transparent way of handling the results. Even though the De- partment for Planning and Housing is using several communication channels and has been hiring more staff to keep up with questions, complains, and requests they receive concerning the new rent cap bill, it still connected to a great amount of additional work. For example, the Rental Union (2020) states the importance to reach as many different groups of citizens as possible with the information material should be of high priority, which includes residents with language barriers.

Another aspect stakeholders recommend is to work is that the rent freeze should not be an isolated infinite policy but rather a temporary component in a policy package. As mentioned by Henger and colleagues (2019), rent regulations can be useful in a policy-mix that simultaneously tackles new construction and social housing. Further components of such a policy-mix have been compiled by several initiatives such as the initiative fair housing (Ger. Initiative Faires Wohnen) which [66]

suggests the acceleration of applications for building permit applications, reducing bureaucratic expenses and investing in transportation systems to improve the accessibility to suburbs to increase the attractiveness and thereby reduce pressure on the inner city housing market (Initiative Faires Wohnen, 2019).

TRANSFERABILITY AND APPLICABILITY

The topic of a heated housing market is not exclusive to Berlin. In many metropolitan areas, there are discussions about how to approach urbanisation, the lack of affordable housing and revenue-orientated actors on the housing market. There- fore, the takeaways from the method to understand these discussions are trans- ferable to other cases too, regardless of cultural or geographical context. The results from this particular work, can be, however, more challenging to apply else- where due to the popularity of rental housing in Berlin. As mentioned in Section 3, the political climate, the housing market history, and the built environment are crucial characteristics. Even within Germany, the results should be applied carefully since a city’s context should always be paid attention to.

FUTURE RESEARCH

For future research, there are several study areas that hold potential for further investigation. One is continuing to approach the complex challenge of the housing crisis in Berlin. As a long-term study, monitoring data about fluctuation, renovations, new construction, and business statistics is important to prove the stakeholder’s claims to be right or wrong. Additionally, qualitative surveys among tenants and landlords should be conducted at several points of the process to understand the perception of the bill as well as its effects and its usefulness. Since the case is very new, it is recommended to update the provided controversy map in case new aspects occur. An investigation on the bill’s juristic legitimacy as well as a study about possible political consequences can be added to the list of further fields of research.

Another area for future research is the use of Actor-Network Theory, specifically Controversy Mapping in urban planning. Its ability to untangle and visualise heated discussions in complex systems that often occur in the urban planning context should be included more often. In particular, the fact that urban planning conver- sations are often of an interdisciplinary nature with a diverse mix of actors involved makes this theory and method very applicable and useful. It is also conceivable to conduct a comparative study of several cases using this method. [67]

In general, the field of housing market regulations and the different metropolitan areas where it plays a role, should be payed attention to because the dispute between social, and economic functions of housing is current and relevant, especially in times of uncertainty.

6. CONCLUDING REMARKS

In the beginning of this study, Venturini’s (2010) statement mentioned that researchers are not responsible for finding a conclusive decision to the controversy, the actors are. However, researchers can provide an overview of the controversy to create a certain base for negotiations. They can describe and assess an issue from an unbiased or at least less biased angle that aims to be neutral compared to the emotionally invested statements from different actors. When actors are struggling to come together to work on the issue in a collaborative manner, it can be particularly useful to have a basic map that includes motivations and backgrounds of the individual claims to understand that every single stakeholder is acting upon their own truth and not necessarily to harm each other. Therefore, this study contributes to the greater understanding of the controversy around Ber- lin’s new rent cap bill even though it does not offer a final judgement or a specific solution to solve the dispute. The most crucial take away is that as a ‘wicked problem’, the housing crisis in Berlin will not be fixed with one bill. It is a complex issue on several levels including intertwined networks of stakeholders with different visions, values, and opinions. Hence, considerations and a deep understanding for other stakeholders’ backgrounds is key to move forward in such an emotional controversy, where none of the stakeholders seem to be willing to meet the others halfway. Even if the aim of a collaborative approach would be achieved, other unanswered questions would remain such as the juristic question of legislative competence. Still, it does not change the fact that frequent communication and a holistic understanding of the controversy and its stakeholders is the base to build upon.

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