Updated version (2026)
The following article was originally published in 2018 and reflects the state of the housing policy debate and the legal framework at that time. The fundamental objectives of social conservation areas (Milieuschutz) and their statutory basis under Section 172 of the German Federal Building Code (Baugesetzbuch) remain unchanged. Since then, however, certain aspects of the legal framework have evolved. In particular, the municipal right of first refusal in social conservation areas was significantly curtailed by a 2021 ruling of the German Federal Administrative Court. In addition, the conversion of rental apartments into owner-occupied condominiums in areas with tight housing markets is now governed by Section 250 of the Federal Building Code. The number of social conservation areas in Berlin has also increased since 2018. While the following article remains valid in its fundamental analysis, individual legal developments should be considered in light of the current legal framework.
Social Preservation Area in Berlin
For many years, urban areas have increasingly gained importance as places of residence and centres of everyday life. According to the Hamburg Institute of International Economics (HWWI), Berlin is expected to be one of the German cities with the highest population growth by 2030, ranking ahead of Hamburg and Munich. “We are moving to the city, we are moving to Berlin” is the motto of many young people and families who wish to build their lives there, benefiting from a strong social and physical infrastructure, extensive transport connections, cultural opportunities, and a more diverse employment market.
However, this urban appeal is accompanied by housing shortages, rising rents driven by increasing demand, and growing competition for limited housing supply. These developments have prompted government authorities and urban policymakers to introduce planning and social measures intended to enable both younger and older residents, newcomers and long-established inhabitants, to continue living in their neighbourhoods while counteracting gentrification and limiting excessive rent increases.
The so-called “Milieuschutz” (social preservation protection) is one such measure. It has been applied since the 1990s and is not a new concept, but it has become the subject of extensive debate in view of the tense housing situation in cities such as Berlin. Based on Section 172 of the German Federal Building Code (Baugesetzbuch), the preservation statute provides municipal districts with a legal instrument to implement these objectives. Depending on its purpose, it may take the form of an urban conservation ordinance, aimed at preserving the distinctive urban character or historically significant building fabric of an area, or a social preservation ordinance, which seeks to maintain the existing social composition of the local population.
On this legal basis, districts aim to preserve both the urban, architectural, and historical character of designated municipal areas, neighbourhoods, or “Kieze”, as well as the socially diverse composition of their residents. Through a set of regulatory measures, urban policy seeks to influence developments in the housing market within designated social preservation areas.
Within these areas, modernisation works, structural alterations, the merging or subdivision of residential units, and changes of use in or on a property are subject to review and approval by the responsible district authority. So-called luxury refurbishments, which would lead to significant increases in rent, are generally not permitted and are prevented. These include, among other measures, the installation of additional bathrooms or toilets, the construction of balconies or additional balconies, fitted kitchens, double washbasins, changes to floor plans, or the merging or division of apartments.
Only measures required for preservation purposes or compliance with building regulations, which are intended to maintain existing structures and ensure a contemporary basic standard of housing, may generally be carried out. Examples include the replacement of outdated windows or heating systems, the initial installation of heating systems and bathrooms, the conversion of attic spaces into residential units, or the addition of lifts to improve accessibility and create usable living space.
Furthermore, rental apartments are intended to remain available as rental housing. For this reason, an apartment conversion regulation was introduced in March 2015, initially applying until 2020, which generally prohibited the conversion of rental apartments into privately owned condominiums within designated social preservation areas. In addition, the districts’ general right of first refusal for properties in these areas was intended as a complementary measure to counteract the “displacement effect” affecting long-established, particularly older, residents.
Currently, Berlin has approximately 40 social preservation areas. Their number continues to increase due to dynamic urban development, the severe housing shortage in Berlin and other major cities, insufficient new construction activity, and prevailing political conditions.
However, for owners of apartments and multi-family buildings in affected areas, these regulations significantly restrict opportunities for structural modifications or improvements to their properties. Preservation statutes often prevent investments and effectively freeze existing housing conditions and standards of equipment. The state, and municipalities in particular, therefore face criticism from property owners and the real estate sector, which argues that its business activities are being restricted. Critics claim that these regulations ultimately preserve existing housing conditions and standards without providing a long-term solution for easing pressure on the housing market, particularly where new construction remains insufficient and property development stagnates.
A prerequisite for implementing a preservation ordinance is the identification and formal recognition of a need for social preservation measures within a particular urban area. In principle, private individuals, civic initiatives, and political groups may also submit an application for the designation of a preservation area.
Following submission of an application to the District Assembly (Bezirksverordnetenversammlung, BVV), the potential preservation area is assessed through an initial screening process, followed by a detailed investigation that includes surveys of local residents. If supported by expert assessments from independent institutions, the district authority may ultimately establish a preservation ordinance. The regulation becomes legally effective once it has been published in the official gazette
