Does everyone who works in Berlin have to live there, too?

August 5, 2019

I often go to Berlin on business trips and have to admit: there is something about that city. Unfortunately it is not all good. I like going there – but I like leaving much more. When I just think about the various social hotspots, the constant jams on the city highway, and the roughly one million building sites, I lose interest in this monster of a city. I would never dream of moving my main residence there. That is where I have praise for my home, Dresden.

Many people see it differently. They absolutely want to work and live in Berlin, which drives the rents, along with the whining about the high rents, to undreamt-of levels. There is a simple solution to limiting the moaning. After all, the question should really be: does everyone who works in Berlin have to live there, too? No. There is enough affordable living space outside Berlin.

© shutterstock / frank_peters
Berlin: city of great opportunities and ever-rising rents.

First class living space in Schwerin and Cottbus

I am not referring to the exurbs around the capital—they have been just as expensive as Berlin itself for a while now. Let’s think outside the box for a change. Towns like Stralsund, Schwerin, Gotha, and Cottbus spring to my mind. There you will find relatively affordable, first-class living space. This could alleviate the Berlin problem and revive eastern Germany, which, as you may have heard, is still suffering from demographic decline.

According to recent calculations by the German Economic Institute in Cologne, just about 73 percent of the apartments that would be required to cover the demand in Berlin since 2016 have been built. In contrast, the institute’s study indicates that there is excess capacity, i.e. available housing, in rural areas, particularly in eastern Germany. Fast transport connections are what is missing.

Rail connections need to be improved—Japan shows the way

People, who live in towns over 100 kilometers away from Berlin, could also commute every day with ICE high-speed trains. I can imagine what you are thinking now: my suggestion is crazy because it involves the German railways, which means delays. Who would want to risk sitting on the train to work every day worrying about being told off by their boss for being late yet again? This can only work if Germany digs into its pockets and improves its railways. We need a major expansion of the rail network and a shift from car to rail travel. Then fewer kids will skip school on Fridays, too.

Germany may still be Europe’s economic locomotive, but it has one of the worst rail operators on the continent. A stinking rich G7 state like Germany should look to Japan as an example. While here in Germany travelers cheer if their train arrives less than 10 minutes late, train delays are not measured in minutes or hours in the Land of the Rising Sun, but in seconds. For decades, the government in Tokyo has continuously expanded the network for the frighteningly fast Shinkansen. These amazing trains cover almost 700 kilometers in just over three hours—and they will soon be even faster once the next generation of Shinkansen trains is introduced.

Railways are the better alternative in France too

Even the example of France would help. The over 300 kilometers from Nancy to Paris takes four hours by car. The TGV can do it in one and a half hours—and is affordable to boot whereas the German railways charge exorbitant fares and look at easyJet with envy. Only in Germany does an airline that has a first-class set-up get mocked as a “budget airline”.

Dear politicians: please think outside the box for a change

The Lausitz region faces a gigantic structural transition due to the coal phase-out. The only major town in the region is Cottbus with a population of around 100,000. Alternative jobs need to be created if Cottbus is not to disappear into oblivion. Once coal mining comes to an end, even more people will commute to Berlin. Berlin to Cottbus would be possible in half an hour even for our slowpoke ICE train. However, the federal government has already said no while pointing to previous studies on the Cottbus to Görlitz route. The project was—you have probably guessed—assessed as “not advantageous for the economy as a whole”. Our government simply does not think outside the box.

Jens-Peter Schulz

CEO, Dresdner Real Estate Investment Holding & Chairman, RETechDACH