Beyond the market and the state: Horizons for a new kind of public housing

Tomer Gardi and Sebastian Schipper (Translated from Hebrew by Orna Meir-Stacey)

The choice between entrusting the right of people to a house either to the hands of a violent government or to capitalists is futile and dispiriting. But is it possible to free ourselves of this stranglehold? A conversation with Sebastian Schipper about a new possibility for public housing (and what it is like to pay rent to yourself).

The following interview stems from a difficulty that I have been feeling for a while in the struggle for public housing. Put simply: on the one hand, through the struggle we demand that the state take responsibility for public housing. On the other, we see that anything the state touches turns to ash. And how could we want the state to assume responsibility and wish to grant it the power to organize the basic infrastructure of our lives, when we have personally experienced, and have seen others experience, what happens when it gains strength and exercises the power it holds? Horrifying.

This reality, which through our struggle we are forced to make this choice – that to me seems impossible – between entrusting the right to housing to the hands of an essentially violent government or to the hands of capitalists, between the vileness of the state and the vileness of the market, seems futile and dispiriting to me. I searched for a possibility of listening to and learning of experiences from other places in the world where people have tried to free themselves of this stranglehold.

Sebastian Schipper, an urban geography lecturer at Frankfurt University and a “Right to the City” activist there, came to my house. He asked to interview me, among scores of other political activists he had met, about various areas of struggle in Israel. With his permission, I turned the interview around. I asked him about a possible political horizon for the struggle that opposes both the market and the state.

Take a long breath. Here it is.

***

Which public housing models exist in Germany?

There are two: according to one model, the state or the local authorities subsidize private investors, for instance by granting low-interest loans, and in return the investor has to limit the rent to five euros per square meter. The state or the local government decides, according to set criteria, who is eligible to live in these flats for subsidized rent, which is lower than the market rate. The problem is that this solution is only temporary, as after 30, 20 or 10 years, once the investors have repaid the subsidized loan they took in order to construct the building, the house returns to the free market, and the rent rises to market levels. Following that, the state has to constantly invest funds in public housing in order to maintain a set number of apartments. And when the state stops investing in new buildings, or invests less as is happening now, the number of flats for public housing plummets automatically.

In Frankfurt in the 1950s and 60s, half of the flats in the city belonged to the public housing system. In the 90s there were 60,000 public housing units, and today the number stands at 30,000 out of a total of 360,000 housing units in Frankfurt. So the problem is that the state invests a huge amount of money for what in the end is a short-term solution. This, generally, is the manner in which public housing has functioned in Germany since the end of the Second World War. So there has never really been an idea of public housing disconnected from the market and profit interests.

‘The city belongs to all.’ When the municipality builds new buildings, they are usually for the rich.

‘The city belongs to all.’ When the municipality builds new buildings, they are usually for the rich.

The second model of public housing in Germany works through housing companies owned by the state or the local authorities. These can build public housing as in the first model, but other than that they also have a stock of “normal” flats in their ownership. For example, the building company owned by the Frankfurt municipality has 50,000 housing units – a very high percentage of the overall housing stock in the city. The question is, who manages the company and what are the intentions, the politics.

Since the 90s, the housing policy in Frankfurt become extremely neoliberal and, therefore, today for the tenants there is hardly any difference between privately-owned or municipally-owned housing companies. Both of these try to maximize their profits and to push prices up, and when the municipality builds new flats it builds mostly luxurious and expensive apartments. Still, these companies are a tool that in principle could be used against gentrification and to reduce rent prices. It is possible to apply public pressure on the municipality in order to instruct the company it owns not to increase rent, or in certain cases to reduce it.

The company managed by the Frankfurt municipality is shit – they increase prices and push out veteran tenants. However, the municipality of Giessen, a smaller city north of Frankfurt, has a building company in its ownership with about 7,000 housing units, and the people who live in these flats are at least represented by the decision-making bodies of the company and can therefore influence processes taking place there. But this is still not a housing mechanism which is out of reach of the state. The Giessen municipality could, in principle, decide to change its position and drive the tenants out of the management of the building company it owns. It is in their hands, still.

How many people presently live in public housing in Germany?

About eight percent. In West Germany, until the beginning of the 90s, this stood at 20 percent. Public housing was then supposed to be a solution not only for the lower-income classes but also for the middle classes. The income criterion for public housing tenants was so high that a large part of the population was eligible for public housing in order to avoid segregation and poverty ghettos.

Did Germany have public housing before the Second World War? (This question interested me from the start. I said to myself leave it, don’t go there. But the comment on the ghettos left me no choice…)

Very little. A famous example is what is called “The New-Frankfurt” – together with a communist architect, the social-democratic local government tried to build a housing stock which would be owned by the municipality. But this was still too expensive for people of lower classes and only provided a solution for more well-established people of the working class. They built 20,000 units – it was huge, there had never been anything like that in Germany before.

So the whole public housing mechanism in Germany, which used to be much bigger in the past but is now in decline, was created after the Second World War?

Yes. And all these flats, remember, were used as public housing flats only in the first years in which the building was standing, before the builder repaid his debt. After the subsidized debt has been returned, the flats moved to the market. In Western Germany there was never an idea that said, say, 20 percent of the flats should permanently be beyond the private market.

The third model

The model that eludes dependency either on the state or on the market is housing cooperatives. They were started by unions in Germany during the 20s, after the First World War, and were mainly small and decentralized. They tried to operate outside the market, as they did not intend to make a profit, and were also autonomous from the state. Or so they thought. When the Nazis came into power in 1933, they united all unions into one big union, and centralized and nationalized the building companies owned by the cooperatives. After the Second World War, this large building company, with all of its housing stock, was returned to the unions. However, it was returned in a concentrated manner – not decentralized as it had been before nationalization by the Nazis.

And so, until the 1980s, four million housing units in West Germany belonged to the cooperative movement. It is truly a huge number. And there was one very important law that stated that a cooperative could build houses and does not have to pay taxes, but was also forbidden from making a profit. And since a cooperative couldn’t make a profit, these funds had to be invested in the construction of new buildings that were also owned by the cooperative. However, this law was changed by the conservative government in West Germany during the end of the 80s – a change that allowed the cooperatives to privatize themselves and operate for profitable purposes. A few of the cooperatives still remain faithful to their principles to this day, but many of them underwent privatization, and now some are ordinary building companies which invest in real estate to make a profit. However, building cooperatives, which are outside the control of the government and the market, still exist.

Do these cooperatives still build new houses?

Yes. And they submit requests for public housing subsidies. If they receive the subsidy, then after the 10 or 20 years of loan repayment, the rent does increased, as they do not operate to make a profit. However, the problem with cooperatives… is this too complicated for you?

No, no, it is important. Continue.

But the problem with cooperatives is that they rely on the commitment and values of the members of the cooperative. So that if the members of a cooperative decide, “fine, we have these buildings in the town, now we can sell them in order to make a profit for ourselves” – they can do that. As I said, quite a few did exactly that, and therefore I live in a building that is, one can say, a sort of cooperative, but is also part of a network of cooperatives called Mietschäuser Syndikat (the Tenants Syndicate). This network has nearly 100 buildings throughout Germany.

The building in which I live in Frankfurt, is a four-story building for 15 people, but there are other buildings, in which 200-300 people reside. Each building is organized like a cooperative, meaning that we can decide if we wish to renovate the building, we can decide who can move in and such. However, we cannot decide that we are selling the building, we cannot decide that we are privatizing it, returning it to the market. Its legal structure is rather complicated, but the main thing is that if we wished to sell our building, all the rest of the cooperatives in the network, meaning the rest of the housing projects, would need to agree to that. And this can never happen, since we will make money from selling the building, but they won’t. This is a mechanism of protection against privatization, a defense mechanism against ourselves, actually.

This movement emerged from the squatters movement of the 80s. At that time in Germany, hundreds of buildings were taken over. Kreuzberg in Berlin is a famous example: there were so many buildings in this neighborhood that were squatted by people, that the police simply couldn’t evacuate all of them. So it forcefully evacuated some, but other buildings became legalized

One of the houses belonging to the Tenants Syndicate.

One of the houses belonging to the Tenants Syndicate.

Why were there so many empty buildings there then?

How do you call it – renewal? Urban renewal? They wanted to destroy hundreds of buildings in Kreuzberg, which is now one of the most popular neighborhoods in Berlin, in order to build a highway through it. So they said fine, we will empty the houses, destroy them and build a road. But it will take time until all the houses are empty, so, in the meantime, we will just put Turkish labor migrants (who were supposed to leave Germany after a few years) in some of them, until all the other houses become vacant. The labor migrants will be easy to evacuate, since they don’t know their rights and they don’t have the political power to fight us, etc.

Beyond that, many left-wingers moved into the empty buildings and squatted them, which made it was impossible to evacuate them. This is why to this day there are so many people in Kreuzberg who are either the third generation Turkish immigrants or left-wing activists. The government could never build the highway. There was a lot of violence between the squatters and the police, and the police understood that it was impossible to evacuate them all. So it turned out that a large portion of these houses became legal.

But over time, the radical leftists and former squatters established careers. Some of them changed their political orientation as they became homeowners in Kreuzberg. The neighborhood underwent gentrification – each house turned into an high-yielding asset, so some sold their buildings for huge profits. In Freiburg, a smaller town in southern Germany where there were also many squats, they tried to think of a form of organizing that would prevent people living in legalized squats from selling the building on the market. Thus, the Tenants Syndicate was formed. The place where I now live in Frankfurt used to be a squat – people lived there for 10 years without a legal arrangement since the beginning of the 90s people. Why wasn’t this building evacuated? Nobody really knows. The owner simply never called the police. Then, after a decade, the people living in the building were offered to buy it, but they didn’t know how nor did they have the money to buy a building. So, they joined the Tenants Syndicate.

This Syndicate does two things: first, it acts against the privatization of buildings that have partnered with the network – that is to prevent the building from being returned to the market again, to prevent speculation on houses .The second thing it does is give support to new projects wishing to enter this network and to provide financial support for the purchase of the building. When the people living in the building in which I now live first bought it, they received some financial support from the Syndicate. The purchase was also financed through a sort of crowd-funding. Thus, instead of relying completely on loans from commercial banks, as private homeowners usually do, friends, family and the like supported the project (each with not a lot of money, perhaps 1,000 euros). If enough people support this process, you can have enough money to purchase the building. You pay them low interest, lower than you would pay a commercial bank, which decreases the cost of the purchase. Anyway, they had to rely also on additional loans from banks. But by repaying your debts to the bank, the rent each tenant has to pay decreases.

Wait a minute, but to whom are you paying the rent?

To ourselves, actually. This is money which everyone living in the building pays every month to the cooperative that we created, in order to return the loans we took to purchase the building. “Fritze” – this is what our project is called. We decided to freeze the rent at its current level, and the gap – which will always grow – between the amount of the loans that we must repay, and the amount we collect each month to pass on to the Syndicate, in order to support the purchase of new buildings and to increase the number of buildings that we permanently remove from the control of the market and the state.

Do the other nearly 100 buildings in the Syndicate operate the same way, too?

Yes. All of them. They decide how much they want to give; there is no central obligatory decision regarding the amount. But yes. I pay 290 euros for each month, including all the bills. People who earn more than me pay a little more, 310 euros, others pay 260. What I pay is about half the market rental price in Frankfurt. I pay 5 euros a month per square meter; of that amount, 20 cents go to the Syndicate. Since they bought the building only 10 years ago, the amount we need to repay for the loans is still fairly high. This, of course, will go down, which will allow us to transfer a larger amount of of money to the Syndicate.

Do you know the last time a new building joined the Syndicate?

In recent years the problem has been that there are too many new buildings wanting to join. The cost of housing in cities in Germany is increasing, and therefore many people living in buildings wish to join. There is a general meeting once or twice a year, a few hundred people gather from all the Syndicate housing projects in Germany, and new projects wishing to join introduce themselves, who they are and what they want to do. They are asked questions, whether they believe in the ideas of the Syndicate, and then we discuss whether they can join. Between 5 and 10 buildings join the Syndicate each year, escaping the direct control of the market or the state.

The number of buildings joining the Syndicate each year is limited, as it depends on how much money the Syndicate has to support the purchase of new buildings?

Yes, money is one limitation, and a second limitation is the accompanying consultation that each such building requires. This is also a limited resource of the Syndicate. This process – how to purchase the building, how to organize the group, how to become a part of the Syndicate and what that all means in terms of legal implications and financing. And all of it needs to be organized; this is done by the Syndicate, but the number of new projects we can support is limited.

(cartoon by Propaganda Lalaland)

(cartoon by Propaganda Lalaland)

What are the ethnic or socio-economic characteristics of the people who live in the Syndicate buildings? Are they all middle-class students who know about Foucault and Gramsci?

Each building has complete autonomy to decide how it is organized internally – how the people want to live, how they wish to divide the rent, whether everybody pays the same, whether people who earn less pay less, whether they wish to reserve places in the building for refugees or for people of a lower social class – it depends on each housing project. In our building there was a decision that children do not pay rent, which means that if a child lives in the building, every tenant shares in the rent – not only the father or the mother of the child. We also have an agreement that people who earn less money pay less rent, and those earning more pay a little more. But we don’t have a room or rooms in the building which we say fine, these rooms we reserve for, say, refugees or people of a lower economic class. There are people in the building who have a job with good money, and there are people who earn very little. All went to university, but not all have a degree. Some stopped studying, but almost all spent at least a certain period in university.

And do you think this characterizes the rest of the buildings of the Syndicate?

It is hard for me to tell for sure, but I think so. Yes.

And why is that?

Because the left, the radical left, is very white and middle class in Germany, and it works according to peer-groups. Somebody leaves, there is room for somebody else to come in. So people come, present themselves, say what they are interested in, what they do, and usually we chose people who are political activists, and in Germany, as I said, they are normally white students of the middle class.

And is there a discussion, how to change it? Or do people want to change this at all? Or are they happy with that, how do they regard this situation.

No, there are discussions of that; there is criticism. Say a flat becomes vacant, so we say what – again a white student would move in? This is something that surely needs to change. But the problem is that in order to take such a step – of purchasing a building and gathering a group and finding the people – great efforts and time need to be invested. To deal with bureaucracy and paperwork and lawyers and all that stuff. And this brings projects to a situation where mostly middle class academics get together to bring this about. People from a low socio-economic class who do not have the time and do not have the resources do not usually start such kind of process at all.

To start the process is a very demanding act, particularly when it comes to one’s time. Therefore it excludes people who are not middle class. Most projects start with middle class white academics. And after a while, when the whole thing is established, there should be more awareness about questions of who moves in, whether places should be reserved, etc.

Okay…

There is something new, which I hope will soon begin in Frankfurt. There is an old building from the 1950s belonging to the university, a huge building of 10 floors in which something like 140 people can live. The idea is to buy it and turn it into a residential building within the Syndicate. This is really a very large building. We are hoping that there will also be a mechanism to ensure that people from a lower economic class can be part of the project. At the moment, the building is empty and the municipality wants to tear it down and build prestigious residencies there, but there is a struggle to leave it as it is.

And how do you wage a struggle against the destruction?

It has all kinds of levels. At one point the building was squatted. It was evacuated after some days, but received a lot of media coverage. What plays in favor of this project is that the building is a “listed building,” so the municipality cannot destroy it without going through a lengthy bureaucratic process. We also have support from residents of the city who believe that preserving architectural heritage and the like is important. It is still unclear who will win this struggle. Because the building company owned by the Frankfurt municipality claims that the building is in a prestigious location in the center of the city, we can get for it a lot of money for the municipality coffers. It has become a difficult struggle.

One of the main actors in the struggle is a group of senior women who live in this neighborhood. They know that they will retire soon, in five or 10 years, and the amount on which they’ll have to live every month will not be very big – their pension is going to be far lower than the salary they are earning now, and there is no chance that they will be able to pay the rent in this neighborhood anymore. Their only chance of staying in the neighborhood is to move into that building after we manage to save it and turn it into a residential building owned by the Syndicate. Therefore, they form a very determined and militant force against the municipality’s plans. They are not the usual left-wing radicals or young students.

What about Israel?

From what I understand, this whole system of the Syndicate and building cooperatives was made possible to a specific historical condition during the 80s and 90s when there were many squats in Germany.

Yes, it resulted from that. The moment the process of legalizing the squatted buildings began, it was necessary to create a mechanism that would ensure that they were not turned into private assets and returned to the market.

What I am trying to get at, what I want to ask is, if we wish to establish such a syndicate here, to start a similar process in Israel, in a political situation that lacks a mass squat movement…

The squat movements were not a necessary condition for the creation of the Syndicate. It helped because in this case we acquired the buildings for much cheaper, way below the market value of the buildings. Because people have been illegally living in them for years, no investor was very interested in buying them, since if a building is squatted for some time, it is very messy for whoever ends up buying the building. Therefore, the former squatters received – at that time – the buildings for fairly cheap prices. But regarding the new building joining the Syndicate today, some projects purchase the building at market value. Then the rent is relatively high in the beginning, but will reduce over the course of time. You don’t need a squat movement to start such a process.

Housing rights activist Zehava Greenfeld and her friend. The problem in Israel is getting enough people to buy a building.

Suppose I wish to start a process of a syndicate like that tomorrow. What steps would we need to take?

Good question – it depends on the specific legal system in each state. Therefore, it is difficult to copy this system one-to-one to other contexts. In Germany, legally, the Syndicate is based on a structure of a limited liability company (GmbH). That is, in effect, a typical capitalist structure. So our building is owned by the company we established, called Fritze GmbH. This is a registered company which owns the building. The Fritze GmbH is, in turn, owned by two bodies, two shareholders. One is the Fritze Group – the 15 people living in the building. They have the authority to renovate the building and can decide on all other things. But they do not have the authority to sell it. In order the sell the building, they need the consent of the other shareholder of the Fritze GmbH, which is another limited liability company. This company is owned by all the other projects in the Syndicate. This means that all the other people in the other housing projects of the Syndicate will have to agree that we sell the building – that will never happen. What I am saying is that we made use of the structure of a limited liability company in order to establish a control mechanism that makes sure that these buildings will never re-enter the market. This is based on the structure of the German legal system, but I suppose that there is something similar in Israel, too.

Yes, but the problem of creating this system from scratch is obtaining enough money to buy three buildings, so that they could mutually safeguard each other, to start a housing movement.

Housing rights activist Zehava Greenfeld and her friend. The problem in Israel is getting enough people to buy a building.

Housing rights activist Zehava Greenfeld and her friend. The problem in Israel is getting enough people to buy a building.

I assume that one group organizes to buy and live in a building in Jerusalem, another group organizes to buy and live in a building in Tel Aviv, another in Haifa, and it continues from there. But it is possible to start with only one building – you don’t need another building in order to establish a system of safeguarding against privatization. As far as I know, there is now a new cooperative movement in Israel. The body needed to establish the system that prevents a future privatization can, in the beginning, be any other cooperative that will be the second shareholder.

Yes, but the problem is not that. The problem is how to get organized and raise enough money to purchase three residential buildings.

I know that a cooperative bank is now being established in Israel. Such a bank can possibly assist in gathering savings from people for this purpose, instead of relying on a commercial bank. People who will say yes, I support the idea, I wish to promote it, I am willing to lend a certain amount, and not at the interest rates of a commercial bank but at a lower interest. And crowd funding.

For that one needs enough people who have 5,000, 10,000 shekels, which they can afford to lend.

Yes.

In Germany, people do not live on debt, on credit, on overdraft.

No.

Here nearly everybody is constantly overdrawn.

In Germany hardly anybody is. It is also uncommon to pay with credit cards. Yes, we had the good fortune to start with very many squats, which made the initial stages cheaper and easier. And so now we can support the purchase of new buildings, because the rent we pay is so low.

Sima Kavlo, living in the apartment for 34 years, after her parent passed away. (Oren Ziv/Activestills.org)

Internationalization of the struggle?

Our problem now is that we are growing too fast. And the question we are coping with is how to change the organizational grassroots structure of the Syndicate so that it remains democratic. That means gathering a general meeting of 300 people who represent a few thousands of people. So perhaps we need to decentralize the structure and have not one general meeting for the whole of Germany, but perhaps an organization of Northern Germany and an organization of Southern Germany so that the structure remains democratic. Because the Syndicate keeps growing all the time. New housing projects are joining us, mostly from cities such as Leipzig, Dresden, cities from former East Germany, where real estate is still relatively cheap, but it is clear that the prices there will rise over the next five or ten years. In these cities it is possible to purchase a residential building of four floors for 40,000 euros. Also in Frankfurt there are groups wishing to join the Syndicate, but the housing prices are very high, and it is very difficult to purchase a building there if you are not a businessman. So in a certain way in Frankfurt it may be too late.

Perhaps in the Israeli case, then, the first three buildings should not be in Tel Aviv, Jerusalem and Haifa. Maybe they should be in peripheral cities like Be’er Sheba, Afula, Hadera, Ashdod.

Clearly. If you wish to purchase a building in Tel Aviv, you are competing with companies backed by investors who can always pay more than you.

Have you ever thought of turning the Syndicate into an international body, such that the cooperative buildings would not necessarily be limited to the borders of Germany? To understand the struggle for the right of housing as worldwide, international?

Yes, we thought about that. And many times people from the Syndicate are invited to present ideas regarding the organizational structure in all sorts of places around the world, or at least Europe. But the complexity of this is that the legal system in each country is different, and the Syndicate is structured according to the legal system in Germany. Therefore it is simply impossible to transfer this structure to other states, even within the European Union. What we can do is to explain the idea, the structure, the successes and the difficulties, and people in each state can consider how to apply this idea in the specific context in which they live.

Tomer Gardi is a writer, editor and political activist who lives in south Tel Aviv. Sebastian Schipper is a critical/radical urban geographer and political activist, living in Frankfurt am Main.

This post originally appeared in Hebrew on Haokets.

Advertisements

Enter your email address to receive notifications of new posts

Would you like to comment?

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: