As real-estate markets are increasingly subjected to the pressures of globalization, gentrification has become an almost universal woe of capitalist cities around the world. Today in Berlin, the city is instituting the Milieuschutz Laws, which we outlined in the first installment of two-part series as being some of the most progressive municipal policies in the world meant to curb gentrification in historically affordable areas. While these are positive steps, the history of the affordable housing struggle in Berlin stretches back decades, and was traditionally led not by city government, but by students, artists and immigrants.
In the decades after World War II, large portions of Berlin became derelict and depopulated, while legal affordable housing was in short supply for the city’s lower income residents. As a result, many of the city’s abandoned tenements became squats, known as “occupied houses,” where people built entire communities outside of the rule of law. These squats were largely tolerated until the 1990’s, when rents began to rise once again and the occupied houses were prime real estate.
In their heyday, squats such as the ones on Mainzer Straße, pictured above, represented a movement of autonomous urbanism known as the Hausbesetzerbewegung, or the German squatter movement. Beyond simple habitation, the movement created a distinct culture of common space that drew inspirations from anarchism and socialism. For instance, part of the squatter ethos was active rehabilitation of derelict buildings, an act which entitles the occupants to ownership of the space. Through this type of “sweat equity” and intense advocacy, some squats were able to achieve legal status and receive public funds for the rehabilitation of their buildings.
Today, few of the Berlin squats remain, however their cultural impact can be seen in the city they once occupied. Despite years of violent evictions and oppression, the unique urban culture derived from Berlin’s occupied houses are now celebrated by the city, and are being capitalized on by developers. Many of the underground techno clubs, for instance, have become legalized, and now the anarchists are grappling with perhaps the enviable problem of being a global cultural destination.
Around the same time, similar squatter movements took shape across Europe and North America. For instance, as recently as the early 2000’s, New York City’s now posh Lower East Side was home to dozens of squats and the site of sometimes violent conflict between squatters and evictors. After the period of suburbanization of the 1960’s and 70’s, New York found itself the unwitting owner of hundreds of abandoned buildings. Meanwhile, homelessness in New York became a pervasive problem due to the loss of working-class jobs and insufficient affordable housing. As a result, artists, anarchists, homeless folk, and displaced people began squatting in the city-owned tenements – many of which were concentrated in the Lower East Side.
The squatters began upgrading the derelict tenements as they saw fit – and thus developed a sense of ownership over the buildings. Meanwhile, the squatters presented themselves as a grassroots answer to the homeless problem – an issue the city was failing to address in a productive manner. They sought to follow the model of Urban Homesteading, where cities could give away derelict buildings in return for the residents’ “sweat equity” towards the improvements of those buildings. New York did not sanction anything resembling homesteading until tensions between squatters and evictors boiled over well into the Rudy Giuliani Period.
In the meantime, squatters sought to assert a different type of legal argument known as “adverse possession.” This legal maneuver stems from a common law doctrine with roots as far back as Roman law, which essentially states that if a piece of property has been continuously used and occupied by someone other than it’s owner for a certain amount of time, that person has a legal claim to that property. The specifics of the law vary from country to country, but in both Europe and North America, it is the most commonly evoked legal maneuver for squatters to find legitimacy.
In the case of the New York squats, however, the city and the squatters came to a different agreement. After decades of advocacy, forced evictions and conflicts such as the Thompson Square Riot, a few of the surviving squats finally achieved legitimacy in the early 2000’s. Rather than the squatters directly taking ownership of their buildings through adverse possession, however, ownership of the properties was transferred to a non-profit, and then sold back to the occupants so that they could form a limited-equity cooperative. By legitimizing the squats, the city avoided the possibility of losing the buildings through adverse possession, which would have set a major precedent for other squats seeking ownership. Also, the squatters were required to take on debt to bring their buildings up to code – which meant the buildings would lose much of their distinctive, hand-built character.
The cooperative ownership model, however, is itself a very effective tool for creating and maintaining affordability. In contemporary times, cooperatives have diversified to enable affordable homeownership in a variety of contexts. For instance, one of the most promising models for preserving affordability is Community Land Trusts, or CLT’s. CLT’s have been quietly gaining in popularity over the past 40 years since Civil Rights’ activist Robert Swann founded New Companies, Inc., a community land trust intended to provide land ownership to poor blacks in rural Georgia. The model was originally based on the Jewish National Fund’s land trust and the Bhoodan Movement in India, but has evolved to become an economically viable solution for affordable housing that is neither public housing nor private development.
The model has many variations, but the basic framework involves the formation of a nonprofit Community Land Trust which purchases housing units in concentrated areas with funding from public and private sources. The CLT then sells the housing structures, but maintains ownership and stewardship of the land below the structure. This allows the housing units to be sold at affordable rates, while keeping the property taxes low. The owner of the structure may later sell for a fair return on investment, but not at market value – thus maintaining affordability for the new owners.
The largest CLT in the United States is the Champlain Housing Trust, based in Burlington, Vermont, which manages nearly 3,000 housing units for low- and medium-income residents. In their Shared Equity Program, purchasers who fall into the required income range may purchase a home with no money down and only pay the closing costs. When they decide to sell, they recoup their equity plus the value of any capital improvements, and 25% of the appreciation of the home.
The Champlain Housing Trust also manages a number of Housing Cooperatives, another useful model for maintaining affordability without significant outside investment. Housing co-ops are common across the United States, particularly in New York City, where most apartment buildings are cooperatively owned via a corporation. However smaller scale co-ops, some more legal than others, have long been an affordable housing alternative for students who are willing to trade some independence for cheap living and a sense of community. One of the largest student housing cooperatives in the United States is the Berkeley Student Collective in California, where over 1,300 students exchange five hours of work each week for reduced rent and communal living.
These small-scale housing cooperatives are expanding as a viable affordable housing option for non-student occupants as well, although local occupancy limits prohibit more than a few unrelated adults from living together. Co-op supporters argue against such occupancy limits, saying that there is little real difference between a 12-member family and 12 unrelated adults all living under one roof, and that restrictions to the contrary amount to a form of discrimination. They point out the fact that co-ops are typically highly self-regulating, with a strict application process and house rules governing maintenance and behavior. This debate was highlighted last year in Boulder, Colorado, when the city passed a controversial ordinance legalizing independent housing cooperatives with 12 occupants in low density and up to 15 occupants in medium to high density zones. The much debated law has languished in public process for years due to protest from single family home owners – showing that even in places with progressive reputations, addressing affordability remains a difficult topic.
CLT’s are increasingly common outside the US as well, especially in Canada and the UK – although they are not unheard of in Europe. In 2015, mainland Europe opened its first CLT in Brussels, and more have followed.
While CLT’s and housing cooperatives have been gaining traction, it has been primarily due to grassroots movements, rather than city-supported projects. With only a few exceptions, cities at best tolerate – but often obstruct – grassroots alternatives to private or public housing. Only through local governments that are willing to forgo their growth-machine policies and align with community-led housing initiatives will the best of both approaches – governmental and grassroots – be coalesced to make truly substantial movement on the affordability and gentrification problems.