The recession doesn’t seem to have greatly slowed the gentrification of the poor-but-central parts of Berlin. From where I sit, I look across the Landwehrkanal into Reuterkiez, a rapidly trendifying area of new nightlife and newly annoyed neighbours. Old Ecke bars are closing on a daily basis, and being replaced by the Berlin cliché of bar-galleries, replete with 1970s cast-off furniture and randomly exposed brickwork.
Gentrification is most visible in Berlin where the Wall left a swathe of open spaces, which have gradually been filled in. Nearly all will be gone within the next five years, I would guess. Below are a few snaps I took the other evening on my way into Mitte, mainly of the sites being infilled around where the upper part of Dresdener Straaße meets Waldemarstraße (still a blank patch on Google maps at time of writing). Note the line of the wall, visible as a double line of cobbles across the road, in at least one of these:
Here’s what I thought had happened: in the early 1990s after the wall came down, a huge amount of capital flowed into Berlin, invested on the assumption that the newly reinstated capital would grow significantly and become a bustling metropolis once again. The big money went into office construction and such-like (see Potzdamerplatz in particular) but was later followed by lots of smaller investors pouring their Irish and Spanish euros / British pounds into buy-to-let apartment speculation.
Then everyone suddenly remembered that Berlin had no real industry anymore (east german industry had all closed by this point). The only ‘industry’ to speak of was government, and even then most cicil servants still secretly lived in Bonn and commuted. Berlin had spent lots of money on its new infrastructure but recouped not much at all through business tax, and is now very broke.
Some days, all the above seems to be true. The Berlin government certainly is broke, and it seems that a range of terrible, lacklustre designs are waved through by planners on the basis that ‘anything is better than nothing’. The ongoing development of the Media Spree has ground to a halt. But no-one seems to have told housebuilders, who are carrying on regardless. There still appears to be a steady stream of luxury apartments going up, at least at all points east. Recession-proof Berlin? Seems unlikely.
So I welcome comments from economists, investors, planners, architects or builders who can explain this. Are people moving from west to east because it’s cheaper? Are people moving back in from surrounding Brandenburg, where they spread out to over the last two decades? Or is it just my selective perception, where I spot all of the relatively small number of new buildings going up? Do get in touch if you know the answer.