29.6.17

No Freedom for Friedel 54

Out On the Street


Linienstr. 206
Linienstr. 206 in Mitte
First Grenfell Tower, now this.  Housing problems seem to be making headlines around Europe right now. Like Grenfell Tower, the treatment of Berlin's grassroots housing projects has exposed the void of sincerity that gapes behind the well-meaning rhetoric of our city's leaders.

My time in Berlin since 2010 has been spent traipsing around the central and eastern areas of the city, tracing pathways linked by vanishing landmarks. First LB54, then Tacheles and now, Friedelstr. 54. It seems like every year is ticked off on the calendar by the fading away of yet another peeling, patchwork facade, daubed with squatter slogans like, 'Wir Bleiben Alle' (we're all staying). That fresh immediacy of an abandoned city's life is gradually suffocated under layers of modern, controlled additions - neoclassical mouldings and fresh pastel paint. All wrapped in their samey-same, sterile white cladding, they await customization by some remote landlord's tastes.

"It mirrors the capitalist urban politics. Everything that does not bring maximum return gets displaced..." Friedel 54's website

The tenants from all of these grassroots venues (and homes) have been extracted using a combination of tactics, both underhanded and unexpected. Their opponents never seem to use the same strategy twice. There's never any pattern that anyone can learn from, adapt to, or develop a defence against: just a labyrinth of delays, deceptions, last-minute bids and bullying by MP's and police.

The senate's response, however, has been predictably the same in nearly every case:

"We feel for you, but our hands are tied..." 

At some point, though, the question has to be asked: if its "hands are tied" every time that anything that matters is happening to Berlin residents (changes to housing regulations, rental regulations, buyouts and takeovers of public land) then why does the Senate even exist? When does it stop being a mere placeholder of an authority and begin to steer real events in the city, if not when the people demand or need it?

The answer is, "Probably never".  These leaders are not really leaders after all. They're managers. They're administrators to a neo-liberal model of urban development, where private investors can remake any city in any way that they want (from anywhere, at anytime) just as long as they abide by the federal laws.  That leaves the residents all but expelled from every mechanism of practical change and development that affects them.  They're allowed to be the city and to live in it but, technically, they can't change anything but the inside of their flats.... flats like the ones that Friedel 54 expects will be evicted, eventually, to make way for a 'better' Berlin.

Even that space doesn't really belong to the people here, in the end. 


Behind Closed Doors

The  people behind the Friedel 54 bar, shop and community centre (which is being evicted today) have alleged that, "The politics and cops once again are not quite stupid enough to get their hands dirty with the issue. Rather, they have gathered their forces behind a Luxemburg based shell company, which knowingly bought in to this conflict. This was a conscious political decision!"

The name of that shell corporation is Pinehill but nobody knows who's behind it because, well, that's how shell corporations operate. They're anonymous, faceless, designed expressly for the purpose of allowing cowboys to buy stuff that they shouldn't be allowed to touch with a bargepole - like flats.  Until the anonymous consortium of investors behind Pinehill are revealed, Friedel 54's assumption that the senate may be playing an active part in this sale seems as safe as any other.

Starting a shell corporation is dead easy, according to Natasha of Fusion.com website, who was able to set up a shell corporation for her pet cat in "two minutes", without needing to give her name, let alone show any I.D. Well, who issues passports and drivers' licenses to cats, anyway?

According to the report, 'The friendly Delaware agents who helped Natasha set up her cat’s company, explained that clients love their state’s privacy laws. “Many times we don’t know who our clients are.  We know the LLC name or corporate name, but we don’t know what they’re doing or what kind of business they have.”

In New York and London, shell corporations have been buying up real estate to launder black market cash accumulated by gangsters, fraudsters and pretty much anyone else who's been banned from doing real business abroad.  The odds are high that Friedel 54, once in possession of such a corporation, will either never be developed, or it will be re-developed in a far less affordable way*.






A "Misuse of Existing Dwellings"


You'd think that Berlin would want to discourage these shell corporations from setting up here, wouldn't you?  This city's authorities always claim that they want us to have a stable, sustainable rental scene. On June 1, 2015 they introduced the Mietpreisbremse (or “rent price brake”) to stop landlords from using legal loopholes to raise the rents, here.  On the Berlin.de website there is a section entitled, "Preventing the loss of existing housing" where the city authorities claim that they're against "The misuse of existing dwellings." Yet at the same time, allowing shell companies to buy up affordable rental spaces like Friedel 54 so they can launder cash, avoid paying taxes or whatever, seems like the most glaring misuse of a property that there is.

Another city that has a legacy of handing over residential buildings to shell corporations is New York. "In New York City alone, officials are investigating over 120 cases of fraud using shell corporations, but lawyers estimate there are thousands of cases that haven't even been investigated. The layers of secrecy and the number of cases have overwhelmed the capacity of authorities to investigate the crimes. It's an epidemic." That seems to be a prophetic warning, coming from a community that is many years ahead of Berlin on the issue of affordable housing, and how best [not] to sustain it.

In the London borough of Kensington & Chelsea, near to where the Grenfell Tower blaze happened recently, "There are 1,399 vacant dwellings as of April 2017 - and the number hasn’t dropped below a thousand for over a decade" These, too, have been bought up by shell companies that use residential buildings as a place to stash their excess profit, to avoid paying taxes at home.

Surprisingly, England and Scotland already have a solution for tax-avoidance by shell corporations like these:

"In England, councils are allowed to charge up to 50% extra council tax on any home that’s been empty for more than 2 years. But in Scotland, the rules are tighter: local authorities are able to increase council tax by 100% on homes empty for 1 year or more." The problem there is simple lack of enforcement, but England's legal model could help to protect Berlin's residential rentals market from exploitation, as well. Then the senate's hands wouldn't be "tied" nearly so much of the time. It may be too late for Friedel 54 but the remaining left wing e.V.'s (collectives) in the city could still stand a chance.

It also seems a bit strange that almost all of the e.V.'s that have been targeted by real estate developers and the Berlin authorities have been left-wing e.V.'s. An e.V. is a special category of collective that is peculiar to Germany. Its purpose is to help bring people together and develop a sense of community, of culture. E.V's are not allowed to turn a profit and they're exempt from the usual business taxes. Nearly every underground & grassroots venue in Berlin is registered as an e.V.  But weirdly enough, only those that are associated with the activism (anarchism, pacifism, nuclear disarmament, feminism, animal rights, etc.) ever seem to be targeted by developers and the senate for extreme evictions like these.

It feels like Berlin's leaders have decided that the cultures represented by left wing e.V.'s is less desirable... less deserving of a space in this city, than any other kind. That it wants to sacrifice them all, even when it's clear that these spaces are pretty damn popular and attract a lot of support from the neighbours and passers-by. The senate seems like it's attempting to arbitrate the tastes of the people here, and their self-determined culture. Shouldn't it be up to Berliners to decide which e.V.'s they want to see here?

There's a creeping sense that some sort of ideological cleansing campaign is being perpetrated by the authorities in Berlin. Maybe the cries of "fascism" from the all those displaced squatters and activists isn't that radical, after all. And Berlin's authorities have done little to soothe their fears. Instead, it puts all its muscle and might into silencing them when they resist.

Where does that leave fresh, up-and-coming aspects of Berlin's culture - the most attractive parts, in the long run? - the answer to that question can be seen at Friedel 54 today, outside on the street. 

*In a piece on ZeroHedge.com investigating shell corporation-owned properties in Vancouver, Canada, this is how the real estate laundering scheme works:

    1.    Chinese investors smuggled out millions in embezzled cash, hot money or perfectly legal funds, bypassing the $50,000/year limit in legal capital outflows.
    2.    They make "all cash" purchases, usually sight unseen, using third parties intermediaries to preserve their anonymity, or directly in person, in cities like Vancouver, New York, London or San Francisco. (and now Berlin, too - ed.)
    3.    The house becomes a new "Swiss bank account", providing the promise of an anonymous store of value and retaining the cash equivalent value of the original capital outflow.
    4.    Then the owners disappear, never to be heard from or seen again.


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Berlin, Germany
...is NOT a fashion blogger! I write about underground music, activism, social media rights. Other publications that I have written for: OpenDemocracy, Urban Challenger, Siegesaeule, Alternative Berlin and Sensanostra.