The Mietskaserne Should Be Berlin's Next Export to the World
As the Global Capitals of Cool, Berlin and New York experienced many of the same pressures on their housing markets. Only Berlin remained cool under pressure.
Standing on the platform of Berlin's Alexanderplatz u-Bahn station, one could be forgiven for thinking she was about to board the Seventh Avenue Line at Times Square-42ndStreet. The green and white mosaics bordering the station names on the tunnel walls. The industrial charm of the steel beams lining the platform. The low ceiling lamps casting faint shadows on the tile floors. The bustle of two of the world's busiest crossroads.
Berlin and New York can feel strikingly similar. Beneath the streets and above the sidewalks, the two cities share all the same traits that come with being among the world's hippest cities. More than a few commenters have declared Berlin, "the new New York."
Vibrant cultural scenes and booming economies have mixed to make both cities among the most prominent destinations for a global elite willing to pay top dollar for their address of choice. While benefits that accrue from such status include greater investment and increased tourism, the challenges that it places on cities are also well documented. The massive popularity has generated increased demand for housing in both cities. In turn, housing costs have soared.
Berlin has long been considered an attractive city for renters. The city combines a high quality of life with housing costs that compare favorably with other German cities and major European capitals.
In recent years, however, Berliners have felt the pressures of rising costs. Since 2007, average rents in Berlin have risen 28 percent city-wide and eight percent in the last year alone. Frustrated by what they see as rising costs with no improvement to living standard despite a thriving economy, Berlin erupted into violent anti-gentrification protests in June.
In New York, leaders struggle to keep housing costs affordable. Average monthly rent prices in Manhattan sit at just below $4,000 for a one-bedroom and just above $5,000 for a two-bedroom. Even in Harlem, Manhattan's cheapest rental neighborhood, prices increased nearly 14 percent over the past year to just below $2,000 for a one-bedroom.
Brooklyn no longer offers a cheap alternative. Rents in Brooklyn Heights and Williamsburg now exceed those on the Upper East Side. Last year, Bedford-Stuyvesant witnessed a 21 percent hike in rents, which now top $2,000 for a studio.
New York's efforts to provide affordable housing to residents reached a boiling point this summer over the controversial issue of "poor doors." Poor doors are entrances for residents of a building's affordable housing units. They are separate from the building's main entrance, which is accessible only to the building's wealthier residents.
Under the city's Inclusionary Housing Program, developers received economic incentives if their developments included affordable housing units. When prospective tenants expressed disapproval of having to share an entrance with poorer residents, developers proposed a solution: two doors. One for the rich and one for the poor.
It is with this discussion of poor doors that we begin to realize that New York and Berlin are in some ways also very different. What is perceived as problematic in New York – that residents of different economic classes live in close proximity to one another – is not viewed in Berlin as a problem at all. In fact, integration of economic classes has been a central component of Berliner life for 150 years. It's largely thanks to a single invention: the Mietskaserne.
Mietskaserne translates roughly to "rental barracks," and is Berlin's equivalent of the tenement. The idea was conceived by Berlin city planner James Hobrecht in the mid-19th century. Hobrecht was for Berlin what Baron Haussmann was for Paris and what Pierre L'Enfant was for Washington, DC. He was the main force behind the Hobrecht-Plan, which laid out the city's land use plan for the second half of the 19th century.
In the Hobrecht-Plan, James Hobrecht sought to save Berlin from what he saw as the loathsome fate that had befallen London. He noted that wealthy Londoners had taken to living in West-end villas separated both physically and socially from the less affluent worker classes.
What Hobrecht observed in London is not terribly unlike what has happened in Manhattan and parts of Brooklyn. An article in the New York Times this past week, detailed a growing trend. Residents who moved to Brooklyn a decade ago to escape high Manhattan prices are now being pushed even farther from the center to more affordable areas in New Jersey or far-flung corners of Queens. Areas of Brooklyn considered affordable just a few years ago are now out of reach. The New York Timescites a review that found a full third of homebuyers in northwest Brooklyn earn over $300,000 annually and 65 percent of home purchases were made with cash.
Increasingly, there is little room left in New York's core for the middle class. An article in New York Magazine revealed U.S. Census numbers showing that "30 percent of all apartments in the quadrant from 49th to 70th Streets between Fifth and Park are vacant at least ten months a year." The consequence of New York becoming a luxury playground is the hollowing out of its urban center, particularly of anyone who is not a member of the wealthy global elite.
Hobrecht saw this same trend happening in 19th century London and he sought to avoid the same fate for Berlin. Ultimately, the Mietskaserne would play a critical role in achieving that vision.
Berlin does not share the same visible uniformity of other European capitals, such as Paris or Amsterdam. But behind the diverse facades, most Berlin apartments adhere to a common layout.
The Mietskaserne typically consists of five stories divided into multiple units. The number of units and the heights of the ceilings vary by story. The first floor (which Americans would call the second floor) is the most luxurious and expensive. It has the highest ceilings and is comprised of just a single unit.
Each subsequently higher story has progressively lower ceilings and a greater number of smaller units. Accordingly, the units become more affordable the higher they are. Today, the ground floor typically houses commercial space; although, at the time that many Mietskaserne were built, the ground floors also housed smaller affordable units. Basements contained the smallest, least expensive units of all. The homes are built around a shared courtyard and, of course, everyone uses the same entrance.
Inherent in the design of the Mietskaserne is economic integration. It means that every building, every street, and every neighborhood enjoys a diverse mix of people across a range of economic levels.
This differs markedly from the observed trends of modern housing. In most cities throughout the world, new developments tend to serve very narrow populations. Developments – whether condo towers or single-family subdivisions – are built for a single economic class. There are affordable developments, middle-class developments, upper middle-class developments, luxury developments, super luxury developments… But rarely is housing for a broad swath of economic levels included in a single development, or even a single neighborhood.
The Mietskaserne model ensures housing in every neighborhood for a range of income levels. It also keeps housing costs lower for everyone by buffering against speculative bubbles that send prices soaring.
In fact, despite the recent leaps in housing costs, Berlin remains quite affordable relative to American and other European cities. The average rent for a one-bedroom in Berlin's city center is $815 USD per month. That is roughly equivalent to the average rent in Salt Lake City. It is less than one-third the average rent across New York's five boroughs.
Berliners pay an average of 27 percent of their household income on housing. That amount is significantly lower than the shares paid by residents of other large German cities, many other European capitals, and most American cities. By comparison, New Yorkers pay an average of 33 percent of their income on housing.
The Mietskaserne is not a magic bullet of affordability. Just as there are countless factors that have caused housing prices in Berlin to rise drastically, there are many other historical and economic factors that nevertheless continue to keep them relatively low. The Mietskaserne and the economic integration that it creates are a crucial part of that.
In an important article in Maclean's earlier this month, Brian Bethune summarized decades of research on what he titled "the end of neighbours." Bethune writes that "Americans are settling themselves into mono-neighbourhoods, homogenized not by ethnicity but by income, lifestyle and, above all, attitude." This has consequences for politics, health, social mobility, and education, among many other areas.
As communities become more homogenized, people are even more inclined to self-select into neighborhoods that reflect them. Homogenized neighborhoods are the norm in suburban America, but up until recently had not yet penetrated the country's urban cores. As city center neighborhoods become more desirable, though, things are changing. Many American cities now have downtown neighborhoods that are every bit as homogenous in terms of income level as a suburban sub-division.
Income segregation has the practical effect of decreasing the available housing supply, since many residents understandably prefer to avoid neighborhoods where they may be considered an outsider. The consequence of a decrease in housing supply is an increase in housing costs.
This is effectively what has happened in New York and many other cities throughout the world. An influx of people competes over housing in the comparatively small number of communities that fit their income and lifestyle requirements. Costs increase as supply fails to meet demand.
The pressures are the same in Berlin, but the results are different. Just like elsewhere, Berlin is faced with influxes of new residents that are driving up costs. But Berlin is better able to absorb the demand and is better equipped to mitigate its consequences.
With neighborhoods spread across the city all based on the Mietskaserne model, housing prices in Berlin have historically always been relatively low. And while costs are increasing, the city's many heterogeneous neighborhoods all serve to absorb a small share of the growth. There are not the same year-over-year growth spikes experienced by places like Bedford-Stuyvesant that occur when demand is largely concentrated in a single area.
The decision to construct poor doors was classless. But the experience should not deter American cities from enacting policies that encourage economic integration. Over 150 years of experience with the Mietskaserne shows that integrated housing keeps costs low, stabilizes neighborhoods, and mitigates the challenges of price surges.
It is clear that there is a best practice to be observed in Berlin. The city faces the same challenges threatening countless other cities around the world, and it has endured them better than most. Building Berlin-style apartment buildings would be wonderful but is not absolutely necessary. What is important is that New York and other cities adopt the philosophy that economically integrating housing is better than the alternative. And adopt policies that bring that philosophy to life.
Berlin is not the new New York, but the new New York should try to be more like Berlin.