Poor in the affluent city – Living to survive in Munich
Dialogue forum on 9 May 2019
Munich is one of the richest cities in Germany – as well as one of the most expensive, especially for those who pay rent. Not everyone is able to keep pace with price trends. What are local politicians doing to prevent gentrification and urban poverty? Dieter Reiter, the Mayor of Munich, talked with Karin Lohr, CEO of BISS e.V., and Sophie Wolfrum, Emeritus Professor for Urban Design.
Munich is a thriving city with considerable economic strength, a low unemployment rate, and a high quality of life. But take a look behind the scenes and a different picture emerges: The number of people affected by poverty, and who earn less than €1,350 per month, is increasing year by year. According to a poverty report from the City of Munich, some 269,000 people, or a sixth of the population, were living below this poverty line at the latest count.
Fair payment and recognition needed
Mayor Dieter Reiter admitted that people with average incomes could barely afford the rapidly increasing rents and property prices, and that this poses a poverty risk. He pointed out that the average Munich household spends more than 40% of their income on rent. A few years ago, the figure had been just 20%. The city is building more houses and apartments than ever before to create affordable accommodation – in many cases in the face of public opposition. For more clarity about price developments, the Mayor has commissioned a new rent index that considers all the key facts, including existing rents, instead of using only new rentals over the last four years like in the past.
Children and old age as poverty risk
Prof. Sophie Wolfrum had no doubt that a clear policy was needed from the central government in Berlin. “Particularly in terms of existential living conditions – such as land prices, water and air – politicians need to create structures that protect and encourage the weaker members of society,” she said. The government has to support the constitutionally guaranteed basic right to accommodation, she added, as otherwise a widening gap would develop in society. “Because land accounts for 70% of the costs for a new building, it is at the heart of the housing issues,” she stressed. In this context, Wolfrum referred to Article 161 of the constitution of the Free State of Bavaria, which allows for a levy on increases in land value for the public good. “I would appeal for the application of the existing legislation,” she said. In addition, the city should make every effort to get instruments like urban design development measures, that allows for planning new districts and changing old ones, up and running.
Opposition to new areas for housing development
In terms of urban planning, Reiter is doing everything possible to prevent socially deprived districts developing, like those in Paris or London. As compensation for being granted new building permits, and in line with socially fair land use, private developers must make a financial contribution towards the costs for building roads, schools and daycare centres, and also meet a quota for subsidised and affordable apartments. “We need to maintain a healthy social mix in the city’s districts,” Reiter argued. “That is one of the reasons why there have been no yellow vest protesters in Munich up to now.”
Enhance social cohesion
Further discussed were ideas for more intelligent use of housing space. Many older people live alone in large apartments. There is a city platform for apartment exchanges, but nowadays, smaller apartments are just as expensive as large ones that were first leased a long time ago. “And you shouldn’t replant an old tree,” Reiter reminded the audience. On the question of the misallocation of subsidised apartments, the mayor saw no easy solutions. It would certainly create living space if people with higher incomes had to move out of apartments that were publicly subsidised. On the other hand, such people would have to look for somewhere else to stay, and would then quickly find themselves back in the system for homeless people.
Reiter stressed that the problems in Munich could not be solved without help from Berlin and under improved background conditions. Working alone, he said, the hands of local politicians were often tied. He warned that it could take some time before the Berlin government initiated changes – if, in fact, it did anything at all. For BISS CEO Lohr, it was clear that each one of us is able to do their bit to making this a better world. “I would encourage everyone to get involved and to do something. That will improve conditions generally. And everyone benefits from helping: The person who is helped sees an improvement in their situation, and the person who lends a hand feels happier, or perhaps even fortunate.”
17 May 2019