The summer holidays are just around the corner and there is an important letter in the mailbox. The letter comes as no surprise, Moritz Burgkhardt expected it. But the certainty printed on paper that he and his family will soon have to find a new home weighs even more heavily than the mere premonition. “Everyone knows what it means in Munich when a house is sold. We’re just trying to limit the damage now,” he says. The Schwabing apartment building on Krumbacherstrasse, where Burgkhardt lives, changed hands almost two years ago. This July it has been divided into individual condominiums. He and his household found out about this through the letter from the summer that was sent to everyone by the city. The fact that it has come to this at all is also due to the fact that the city of Munich cannot use new legal instruments to protect tenants from being evicted – because the Free State of Bavaria is hesitant.
As part of an amendment to the Building Code in 2021 – the so-called Building Land Mobilization Act – municipalities were given more room for manoeuvre. The changes in the law are intended to help create more and more affordable housing at the local level. For cities like Munich, however, other aspects of the federal law are also of interest, such as strengthening the right of first refusal or the city-wide ban on converting rental property into residential property. However, the latter only applies if the municipality has been officially designated as an area with a tight housing market. In addition, it must be specified from what number of residential units per house the conversion ban can be applied. The state government must issue the relevant statutory ordinances with the details.
It is still being examined for which cities a regulation is possible
A housing market is considered “strained” when people cannot find enough rental apartments in their city or community – or when they are too expensive. The Bavarian Ministry of Construction recently identified 208 towns, markets and municipalities in the Free State as such. The associated ordinance has been in force since September 16. At the end of September, the Council of Ministers also “launched the introduction of the conversion ban,” says a spokesman for the Bavarian State Ministry for Housing, Construction and Transport when asked by the SZ. It is currently being examined which cities and municipalities could be included “in the area setting of a regulation” and from what number of apartments this should then apply.
The law provides a discretionary range of three to 15 apartments. A draft regulation is expected to be finalized this year. “This will be followed by a hearing of all Bavarian cities and municipalities and a hearing of associations,” said the ministry spokesman. According to the Ministry of Building, it is not urgent, because: “In Bavaria there is already protection against the conversion of rental apartments into condominiums within designated conservation statute areas.”
If the tenants still have to move out
In Munich there are 36 such conservation statute areas in which construction projects or modernizations are checked again separately in order to protect the population from displacement. A total of 350,700 Munich residents live in such an area. Also Moritz Burgkhardt and his family. Since the end of 2020, the apartment building at Krumbacherstraße 9a, which forms a unit with the neighboring building at Hiltenspergerstraße 29, has been part of the Agnesstraße conservation statute.
Because the new owner has undertaken to only sell the 24 apartments to tenants for seven years, the city has not been able to prohibit him from dividing them into condominiums. “If the ordinance from the Building Land Mobilization Act were already in force, this would not have happened to this extent,” says a spokeswoman from the social department. The new passage on the conversion ban is limited to less than five years. There are exceptions for inheritance or when two-thirds of a house is sold to the tenants. Then the remaining apartments can be sold individually.
“The majority of tenants are interested in buying, but there are no options – because it’s too expensive,” says project manager Burgkhardt. His wife Julia Strohwald has lived in the 68 square meter apartment for ten years. The couple had a child a year ago. “We still have a very fair old lease. Meanwhile, the rents here are on a completely different level,” he says. The family seeks advice from the tenants’ association in Munich. She is well networked with the neighborhood, has founded a tenants’ association and is involved in the “Ausspeculate” initiative.
For the restoration of the right of first refusal: tenants on Krumbacherstrasse in January.
(Photo: Robert Haas)
At first they had hoped that the city would buy their property themselves. However, the sale came at exactly the same time when the Federal Administrative Court in Leipzig had overturned the municipal right of first refusal with a decision. It decided that a municipality may only enter into a purchase contract in exceptional cases – if a house is largely empty or it is a junk property. Neither applies to Krumbacher-/Hiltenspergerstraße. This also applies to real estate elsewhere: Since the judgment, 40 houses in conservation statute areas have been sold without the city stepping in. “This development leads to a significant reduction in the protection of residents from displacement,” says a spokeswoman for the responsible municipal department.
Conversion ban only applies until the end of 2025
In Schwabing, half of the tenants still don’t even know the name of the new landlord. “The house next door received an information letter from a new owner company. We didn’t, however,” says Moritz Burgkhardt. He is disappointed that the conversion ban is already being applied in other cities, but is failing in Bavaria because of the state government. “Without the division into residential property, our house would certainly not have been so lucrative. All existing measures are useless against speculation on the real estate market,” he says.
Simone Burger, board member of the Munich tenants’ association and SPD city councilor, sees it similarly. “Berlin implemented this law at the beginning of October 2021. The Free State still needs expert opinions,” she says. The SPD played a key role in driving forward the building land mobilization law in the federal government, and after a long struggle, the then coalition partner CDU/CSU also supported it. From Bavaria, however, there were repeated attempts to stop the law. The sooner the regulation comes into force, the better, says Simone Burger, because the measures are temporary. They are only valid until December 2025. “We are very sure that Munich is a tense housing market, even without an expert opinion,” she says.