Update (as of 2026)
The following article was first published in 2018 and reflects the state of the housing policy debate and the legal situation at that time. The fundamental objectives of neighborhood preservation, as well as its legal basis under Section 172 of the Building Code, remain in effect. Since then, however, certain legal framework conditions have changed. For example, the municipal right of first refusal in neighborhood preservation zones was significantly restricted by a ruling of the Federal Administrative Court in 2021. In addition, Section 250 of the Building Code now governs the conversion of rental units into condominiums in areas with a tight housing market. The number of neighborhood preservation zones in Berlin has also continued to increase since 2018. The fundamental statements in the following discussion remain valid; however, with regard to specific legal developments, they should be viewed in light of the current legal situation.
Neighborhood Preservation in Berlin
Urban areas have long been gaining—and are increasingly gaining—importance as the center of people’s lives. According to the Hamburg Institute of International Economics (HWWI), the German capital ranks ahead of Hamburg and Munich among the cities expected to see the highest influx of residents by 2030. “We’re moving to the city; we’re moving to Berlin”—that’s the motto of many young people and families who want to live and make a life there, drawn by the city’s robust social and infrastructure services, transportation options, cultural offerings, and a diverse job market.
This is accompanied by a housing shortage, rising rents amid increasing demand, and competition for the limited supply of housing. This has prompted state and city policymakers to implement urban planning and social measures designed to make life possible for young and old, newcomers, and long-time residents alike, while also combating gentrification and curbing rent increases.
The colloquially termed “neighborhood preservation” is one such measure. It has been in use since the 1990s; while not a new concept, it is a much-discussed topic in times of tight housing markets in cities like Berlin. The federal law on preservation ordinances, enshrined in Section 172 of the Building Code, provides districts with a legal tool to implement their plans. This is referred to from an urban preservation ordinance, which aims to preserve distinctive urban character or historically significant building stock. With regard to the composition of the social structure, it is known as the “social environment protection ordinance” or “social preservation ordinance.”
On this legal basis, districts seek to preserve, on the one hand, the urban and architectural character and history of defined municipal areas, neighborhoods, or districts, and, on the other hand, the socially mixed composition of their populations. Through a set of ordinances, city policymakers aim to steer developments in the housing market within so-called “milieu protection areas” in a specific direction.
In this context, modernizations, renovations, the merging or division of residential units, and changes in property use are subject to review and approval by the responsible district office. So-called “luxury renovations,” which result in higher rents, are not approved and are prohibited. These include, among other things, the installation of an additional toilet, the addition of balconies or second balconies, built-in kitchens, double sinks, changes to the floor plan, and the merging or division of apartments. Only measures required by preservation and building code regulations—aimed at maintaining the existing structure and ensuring a contemporary standard of basic amenities—may be carried out. Examples include the replacement of old windows or heating systems, the initial installation of heating systems and bathrooms, as well as attic conversions and the addition of elevators to provide access to living spaces.
In addition, rental apartments are to remain as such. In March 2015, a conversion ordinance valid through 2020 was therefore enacted, which generally prohibits the conversion of rental apartments into condominiums in social preservation areas. A generally applicable right of first refusal for the districts regarding real estate is intended to counteract the “displacement effect” on long-time and predominantly older residents.
There are currently around 40 neighborhood preservation zones in Berlin, and their number is growing due to the dynamic process, the tight housing market in Berlin and other major cities, a lack of new construction, and the political landscape. However, this leaves owners of apartments or multi-family homes in the affected areas unable to make structural changes or upgrade their properties. The preservation ordinance often prevents investments and sets existing housing and amenity standards in stone, making them immutable. The state—and, more specifically, local governments—must face criticism from both property owners and the real estate industry, which sees its business activities restricted, for simply cementing existing housing conditions and their level of amenities in place. All the while, they fail to “ease” the housing market in the long term amid a lack of new construction and stagnation in the further development of real estate.
A prerequisite for implementing a preservation ordinance is that the need for neighborhood preservation in an urban region be assessed and approved. In principle, private individuals, initiatives, and political factions may also submit a proposal for a preservation ordinance for a specific area. After a motion is filed with the District Council (BVV) to examine a potential preservation area through a preliminary screening, a concrete and detailed follow-up study—which includes a survey of residents in the respective neighborhood—and upon the submission of expert reports from independent institutions, the District Office may ultimately enact a preservation ordinance. It takes effect upon publication in the Official Gazette.
