Tenants’ movements against speculation and privatization of social housing


1.- General identification

Location: Ruhr District, Germany

Dates of the experience phase you report about: 1998 – 2004

2.a- General context and historic background:

About the Ruhr District

Originally based on coal mines and steel, since the 19th century, western Germany’s Ruhr District developed to one of the largest industrial agglomerations in Europe. This urban region, closely connected with the lower Rhine region, today is composed by about 53 towns and cities with about 5.3 million inhabitants.

Following the exploitation of coal, the historical urbanization began in the south near the Ruhr valley and continued toward the north. While the factories and mines became larger and more mono-structural, workers immigrated from various regions especially from what is now Poland, and were housed in settlements near the factories, a process which hardly generated cities in the traditional European sense.

After exploitation of the coal mines came to its end in the southern areas, new jobs were generated in the steel industries, machine industries, etc. In the late 1950s and 60s, many workers from Southern Europe and Turkey immigrated, building a clearly separated cultural minority existing today.

From the late 1960s onward, the whole region fell victim to an industrial crisis. Mines and steel factories were closed and only partly substituted by automobile and electronic industries. The process of de-industrialization could not be detained and most of the traditional workers’ cities today are without any mines or steel factories. The official unemployment rate is one of the highest in Germany, over 16% in Dortmund and Duisburg, and 19.6% in Gelsenkirchen. It would be much higher if it had not been possible to fire many workers through “social plans” which meant early retirement in their fifties or even earlier.

High public investments were put into the urban infrastructure, the formerly wasted environment, public transportation, education and universities, etc. But neither these investments nor the decline of the private service sectors in some of the cities could substitute the loss of jobs and the fall of the region. Today the region has a high percentage of elderly inhabitants which will cause heavy loss of population within the next two decades.

These general trends during the early 1990s were covered by immigration mainly from eastern Germany and a temporary economical boom following reunification and the new economic bubble. A background of generally shrinking housing subsidies during the years before these processes also caused a significant housing shortage. The temporary housing crisis was halted in the mid-1990s.

Today the long term trends, the overall economical crisis, state policies, and the bad regional basis are causing rapid dramatization of the crisis. Many towns and cities are nearly bankrupt.

The Ruhr Region was one of the hearts of the European workers’ and socialist movements, with heavy strikes and losses in its history. Since the end of World War II, nearly all cities were governed by a clear majority of the Social Democratic Party (SPD), which was closely linked to the Trade Unions. The long period in power caused a conservative and somewhat non-transparent mentality of local governance, while the basis of this power – the workers’ solidarity – disappeared more and more. In the most recent local elections, the SPD lost the majority in many cities. While the bad administration of some of the conservatives raised the hope of the SPD to return to power, the real crisis and the neo-liberal politics of the SPD in the national government – as well as heavy cuts in social programs at the federal level – will probably lead to another loss in the next local elections in 2004 and even at the federal level.

Origins and fall of company flats in the Ruhr District

Large parts of the region’s housing stock were originally produced by the mining, steel, chemical, and other companies. The origin of the sector of “company flats” lies in the late 19th century when some capitalists discovered the chance to demobilize and control the workers by the provision of shelter which was strongly linked to the job. Another origin was the engagement of some middle class groups for improvement of the poor living conditions and “morality” of the working class. Many of these rental company flats were originally controlled directly by the factories. The rent was often deducted from wages. It was a privilege to receive a company flat, and it served as an instrument to attract workers who identify with “their” factory.

Nearly all company flats were rented houses or apartments. There were also other important sectors for rental housing for the masses: council housing, cooperative housing, the housing stock of the trade unions, and last but not least the important private landlord sector. Nevertheless, in the Ruhr region the company flats built the vast majority, and the companies became large landlords.

After changes in national law, the administration and control of the flats was transferred to specific firms which were controlled by the industries. These firms received tax reductions. On the other hand they were obliged to maintain social aims and not allowed to profit with their housing stocks. Thus the rents were – depending on the market situation – relatively low, and tenure security was high.

After World War II, the company flats were produced with strong assistance from public subsidies. While industrial capital became more and more concentrated, parts of the housing stocks did as well. The direct linkage between factory and house ownership increasingly disappeared.

With the beginning of the employment crisis, the industries lost their traditional interest in production of new company flats, and reduced their investments in maintenance and repair. During the 1970s, some of the oldest settlements came under pressure by plans for “modernization” and city renewal. There were plans to demolish well inhabited neighborhoods for higher profits and new structures, but the tenants resisted with some significant victories. At the same time, landlords started to privatize some of the best neighborhoods, selling the homes to the tenants or third parties. Some of these sales were without conflict, but many tenants organized protests. At that time, a strong protest was able to overcome the opposing interests. There was also help and money from the state which supported the founding of some new cooperatives and other social solutions.
In the late 1980s, the government abolished the old law for non-profit housing companies. This was the final step to initiate total business orientation in the entire rental housing sector in Germany. The industrial housing companies, which had been mainly orientated on housing provision for the masses, now changed their attitude and viewed the existing housing stock and real estate as a resource for profit. The main strategy to profit from existing old housing stock is to sell it. Instead of spending money on maintenance, sale of the housing brings money.

All landlords of company flats – forced by their shareholders – are more or less active in this market. Customers are sometimes speculators or investment groups, but the final customer is always the consumer, who may be the tenant or another person who wants to live in the flat. This type of “privatization” is supported by huge subsidies for owner-occupants. The companies even try to get rid of their real estate in the crisis region, “privatizing the costs” as we say. The extra profits they can achieve give reason to a globalizing concentration within the German real estate market.

Viterra AG

The Viterra AG, at least until the beginning of this year, was the largest landlord company in Germany. The traditional housing stock is totally based on company flats of mining, steel and chemical industries in the Ruhr district originally owned by several companies. The current Viterra AG – today owned by the transnational Energy trust Enron – is the result of several concentrations in the housing sector and in the industrial sector. Some years ago, Viterra owned about 180,000 rental flats, including the land, facility services, etc.

Management is centralized and controlled by the shareholder who dictates a raise of profit rates. For years they tried to sell the whole company at good prices or bring it to the stock exchange. They tried to improve its value through different strategies which have changed over the years. For example, for some time they were very active in the development of single ownership houses which were mainly built on land near the former company flats, often on the land of tenants’ gardens who protested against it. But in recent years this business was no longer profitable. Viterra AG also tried to monopolize and enlarge the facility service segment, including energy services through its own business because Enron has strong control over the energy markets and a near monopole of the gas market. Meanwhile, they’ve changed their strategy – in part because of international legal obligations after they took over some foreign companies – and tried to concentrate on the core, which is not maintenance but commercial marketing of housing.

Since the late 1990s, Viterra AG has been trying to sell as many flats as possible in this region. At the same time they bought shares of former public housing companies in more interesting markets like Munich, Berlin, and Frankfurt. There they also follow a strategy of sale, but with better profit rates.

They sell the houses and flats at market prices. Main buyers are the tenants who fear expulsions, or people who want to live in the houses themselves (and may have the right to evict current occupiers) or speculators who do the job of “privatization” in a more brutal way.

In 2003, Viterra made high extra profits by its housing sale business.

In early 2004 Viterra sold a package of 32,000 flats to a bank-based real-estate and leasing company (Mira/KGAL). Viterra keeps the administration of the flats while MIRA plans to divide and sell the whole stock in small pieces.

This means that whole city districts – most significantly in the City of Gelsenkirchen – are in the process of sale. Since the beginning of this year new protests and political debates emerged from this problem.

At the same time, direct trade of houses by Viterra continues.

Typology of affected housing stocks

The main types of housing stocks affected by the sales are:

  • Pre-war “workers’ housing estates and settlements,” some protected as urban heritage. Some neighborhoods considered “poor” and “with special need for renewal.” The settlements originally formed a closed working class world with solidarity structures and a common culture originated in common work experience especially in the mines. Families have often lived in the same flats for generations and feel they have paid for them several times over. They maintain their homes and feel rooted in the neighborhood. High percentage of retirees but also many post-war migrants, mainly (former) miners with origins in Turkey. Some experiments with new housing co-ops, but unsuccessful due to high prices and low public support.
  • “Workers housing estates” from the 1950s. Company flats built during post-war housing shortages. Original construction often poor. Neighborhoods often show less identification and social struggles than older housing schemes. Largely still occupied by retired workers, most rather elderly, plus many migrant workers. High percentage of welfare recipients and unemployed. Houses less attractive for sale, but construction modifications are relatively easy and power to resist quittings is weaker. Thus many of the houses find buyers in migrant groups who occupy several flats, causing expulsion of original tenants. Tenants often flee after announcement of sale.
  • Housing schemes from the 1960s and 70s. Company flats, mainly (former) social housing (built with state subsidies). “Modern” constructions. Around the Social Housing blocks you often find single family owner units for the lower middle class. Population is younger than in the above case, depending on the time of construction. Many migrants and single-parent households. Problems with maintenance, repair and vacant flats. Identification often weaker than above, but significant exceptions if self- organization is based in active persons who care about neighborhood organization.
  • Single houses and small groups from all periods and types in diverse places, often better integrated in the urban structures.

Social dangers and risks of massive sale

  • Legal eviction and expulsion of affected tenants by new owner-occupants.
  • “Mobbing” against tenants with legal housing rights by landlords who want to get rid of them.
    Fear of eviction even when the “privatization” has just started.
  • Many tenants flee the affected neighborhoods.
  • Others buy even if the price is too high and then encounter difficulties to pay the loans.
  • New owners are not skilled and educated to manage the rental houses.
  • Lacking capacity of new owners to invest in maintenance and renewal.
  • Tenants become landlords of their neighbors and colleagues.
  • Destruction of existing social structures.
  • Ethnic conflicts, e.g. if Turks or Russians buy houses with German or Greek tenants.
  • No investments are made during the sale period.
  • Higher vacancy rate of houses and flats.
  • Constructions in gardens and green spaces.
  • Robbing tenants’ gardens.
  • Destruction of urban heritage.
  • Social segregation
  • Loss of rental housing stock.
  • Loss of social control on urban land and housing stocks.

Federal Parliament

The Federal Parliament in Duesseldorf plans to decide on a guideline for “social sales.” A catalogue of sales criteria which do not violate housing rights was proposed and officially discussed with the housing business, the cities, NGOs, and tenants organizations including the Mieterforum. SPD and Greens – who have the majority – seem orientated toward strong criteria. But such a “guideline” will only be an appeal and will not be mandatory.
Federal Government
The ministry of housing and urban development is seriously attempting to negotiate with Viterra, but the company is unwilling to change its strategies.
Mieterforum Ruhr
The regional coordination of tenants associations supported all new activities, organized meetings, and looked for mass information. It developed demands directed to Vietrra as well as to the national and federal government and city councils.
Viterra Tenants Coalition
Initiated by Mieterforum Ruhr, a new regional coalition of all tenants groups is being formed. All new and old groups mentioned above, and even officials from the Service Workers Trade Union (who represent the interests of Viterras employees), participated in the first meetings.

3.a Objectives and goals of the main actors you report about:

Protection against quitting and evictions.
Maintenance/defense of existing social neighborhoods and solidarity networks
Repair and maintenance of the existing housing stock
Defense of tenants’ gardens and green space
Defense of rental housing stock
Protection of the urban heritage of the affected settlements
New housing policies
Alternatives to global commercialization of housing
Social improvement of existing housing stocks
Reduction of financial risks of buying

3.b. Strategies
What has been /is the main strategy to achieve these goals?

1. Strengthen the inhabitants’ capacity to organize and use/defend their rights

Provide information about the landlords’ plans and action
Inform about legal rights
Inform about main risks and dangers – for the tenant and for the buyer
Organize meetings
Build committees at neighborhood levels
Improve permanent information and transparency
Be strong and clever in interactions with the landlord
Overcome inner conflicts (e.g. ethnic conflicts)
Regional networking
Learn to make noise and action
Learn to lobby the politicians

2. Regional Networking and Coalition-Building
3. Legal support, advisory and advocacy
4. Political lobbying and protest
5. Search for alternatives
– Cooperative housing

3.c. Reaches
” Size of participating and beneficiary populations: about 140,000 households (over 300,000 persons)
Main social groups:
Pensioners and so called “early pensioners” (fired with some pensions), former miners, steel and chemical workers and their families
Active workers in the steel, chemical and mining industries. Some highly skilled.
Many migrants in all groups, the main group composed of people from Turkey.
Unemployed, welfare receivers, and other low-income inhabitants.
Single-parent mothers and their children (often poor)
All others.

” Territorial reach
Super-regional regarding housing policies and the reach of the landlord
regional regarding networking in the urban region
local focus of self organization and assistance (neighborhoods, towns)
some community housing projects

” Innovative aspects
daring to oppose such a strong enemy
community self-organization of workers independently from traditional structures
grassroots democracy and direct participation
regional networking of very different groups

4.- Actors involved and their roles
see above
Tenants Associations: legal advisory, advocacy, organization, information, press work
Tenants Grassroots Groups and Defense Committees: self-organization. mobilization, individual support, press work, action
Government (local, national): National legal frame and subsidy programs, federal programs, decisions and statements, local resolutions, urban planning, negotiation
Financial: private banks
Others (churches, political parties, etc.): Churches support some of the grassroots groups with venues etc. and even with prayers; political parties react to protests.

5.- Components (brief description of how they link)
see above under goals

6.- Primary tools used

  • Social-organizational tools
    • initiatives, associations, networks, co-ops
      training by doing
      democratic participative decision-making process
      decentralized action and decision making
  • Financial tools (if of importance)
    • voluntary work, resources of membership organizations, collections, members fees
  • Rental Housing Law

7.- Achievements and main lessons learned

Primary impacts (examples)

  • on participants’ live: Protect against quittings. Activate.
    on the housing situation of the poor: keep rental housing stock at affordable prices
    on the community: defend social structures
    on environmental and urban surroundings: keep gardens and green spaces
    on public policy and norms: demands to improve national housing law, change programs
    on democratic management of the city: participation of the tenants and working class
    on gender equity: women in many grassroots groups play a major role

Pimary obstacles faced

  • shareholder value orientation of the landlord
    no strong political influence on private business
    globalization of the housing capital
    policies orientated toward privatization
    lack of public funds for social alternatives
    prices of the houses
    fear of the affected groups
    lacking capacities in the networks
    lacking unity

Lessons provided by the experience, principles useful to other cases, reflections
See above.

  • The housing economy is rapidly transforming from a regulated mode to globalized speculation. Concentrations and heavy losses of social housing elements as well as political influences are the results.
    This development is supported by policies at all levels.
    The tenants/inhabitants must build their own organizations, independently from state and parties
    Local tenants need legal and organizational support from professional tenants associations to defend their legal rights
    Mobilization and intense individual support require neighborhood-based self-organization of tenants
    To build these self-organizations, a minimum of people are needed with capacity to organize etc. They must be rooted in the neighborhood.
    To change policies and resist the strong landlord, a united network at regional level is absolutely necessary.
    Permanent mass information is key.
    The coalitions must be able to negotiate with landlords and governments and at the same time they must be able to organize effective protests.
    New co-ops hardly work within existing conditions (prices, regulations, missing financial support).

8.- Key words
sell out, privatization, commercialization, Germany, Ruhr District, protest, tenants, advocacy, legal rights, self-production, cooperative, housing

9.- Sources
Participating in the movements and organizations, internal documents, own articles for the organizations’ press, newsletters, newspaper articles, some documents by state offices (all in German)

10.- Contacts
Knut Unger
Witten Tenants Association/Mieterforum Ruhr
Bahnhofstr. 46, 58452 Witten, Tel ++49-2302-276171
A list of all tenants organizations active in this field can be provided upon request.