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“The ultimate hidden truth of the world is that it is something we make and could just as easily make differently”
In Berlin since the early 2000s, the rapid growth of “Baugruppen” projects was facilitated by a combination of supportive policies, financial incentives, and urban planning strategies implemented over a 10-20 year period.
The policies introduced empowered its citizens to take an active role in building more homes, which at its height saw between 5-15% of new housing supply across the city being delivered in this way.
The 7 key policy interventions were:
1. Concept-Based Land Allocation
The city prioritized selling public land to building groups rather than to the highest bidder. A concept-based evaluation process was used, where groups had to demonstrate social, ecological, and community benefits to acquire land, rather than just financial capacity. Land was often sold at fixed prices, making it more affordable for Baugruppen than speculative investors.
2. Integration into Large-Scale Urban Redevelopment
Berlin mandated that a portion of new urban developments include Baugruppen projects, particularly in new residential areas undergoing urban renewal. Some former industrial and railway lands were specifically zoned for community-led housing. Larger development sites were subdivided to allow smaller, community-led projects to participate.
3. Financial Support & Low Interest Loans
Germany's state development bank and Investitionsbank Berlin (IBB) provided low-interest loans to baugruppen, which were also allowed to access publicly subsidized loans, particularly for sustainability-focused developments that met passive house standards and green building certifications.
4. Zoning & Planning Preferences for Baugruppen
Certain areas of Berlin were designated as priority zones for Baugruppen, allowing easier planning approvals. Berlin’s urban planning policy encouraged mixed-use, community-led developments.
5. Public Land Leases & Long-Term Affordability Guarantees
The Berlin Senate leased public land to cooperative housing groups at low-cost, long-term rates instead of selling it outright. Some Baugruppen were required to cap rents and resale prices to maintain long-term affordability. Not all baugruppen projects received subsidies, only those meeting explicit social or public interest criteria.
6. Technical Assistance & Advisory Services
The Berlin Senate and local councils established Baugruppen advisory offices. Non-profits and architecture firms provided guidance on legal structures, financing, and group formation.
7. Cooperation with Housing Associations (Cooperatives or Genossenschaften)
Berlin promoted partnerships between baugruppen and non profit housing cooperatives, enabling more affordable financing models and shared ownership structures.
The backstory
In 2002 the Berlin Senate cut funding for all housing programs. It was broke. With this change in policy, along with a severe economic recession, investors and developers effectively stopped building housing. At this time many people, mainly families who wanted to remain in the inner city, were not finding what they wanted, predominately in the rental market. Architects picked up on this potential market and started to develop projects themselves with a design for an empty site, then found enough partners to buy it and build. These projects were unique because the building groups were:
- Resident-led, where future residents form a group early in the process and co-design and co-develop the project, maintaining greater control over the built form outcome, and
- Not for profit, by cutting out the developer and eliminating profit-driven costs residents can direct more budget to where they see value, usually in the form of shared spaces to encourage community-oriented living or enhanced sustainability features.
As the economy improved many private developers became focused on the luxury segment of the market, worsening diversity and social outcomes in many neighbourhoods. Berlin continued to support community-led building groups as they were seen as a way to counter speculation and deal with a housing affordability crisis. Social and community-oriented housing was seen as something that should be promoted as traditional housing developments prioritised profit over quality and social outcomes.
I am not suggesting that adopting these policies is an alternative to the more fundamental structural supply and demand side housing policies that Australia needs. However these interventions would serve as complementary measures in the short term to boost supply as more politically challenging policies are progressed.
Developers, like most enterprises are competing for resources and remain sustainable by maximising profits, so when the viability of developing in affordable suburbs is under duress, this is a very big deal when we and our governments rely on private developers to deliver close to 100% of housing supply.
The Berlin experience shows that government can support their constituents to have genuine agency to take a more active, deliberative and democratic role in creating housing outcomes.