Environmental protection areas, rent control & conversion ordinance in Berlin

Environmental protection in Berlin: 81 social preservation areas

Currently, 81 social preservation areas have been designated by district ordinances. Mostly referred to in the media as "environmental protection areas", these are legally correct areas for the preservation of the composition of the residential population. We have summarised for you the procedure used to designate environmental conservation areas and the restrictions that can result for owners and landlords.

The legal basis

The legal basis is § 172 of the German Building Code (BauGB). It states in part: The municipality may designate areas in a development plan or by other statute in which the demolition, alteration or change of use of built structures requires approval in order to preserve the composition of the residential population.

Legal and political development

The legal provisions for preservation statutes have existed at the federal level since 1976. In the Land of Berlin, the power granted to the Länder to enact preservation statutes was first used in the early 1990s for the district of Moabit. Since 2001, a reform of district self-administration has made it possible for Berlin's districts to establish preservation statutes independently.

Enactment of areas and decisions to establish them

Environmental protection areas are established by legal decree of the boroughs if an expert social study has proven that, among other things, displacement of the resident housing population is to be feared. While the preliminary study is still underway, the district can pass a decision to set aside modernisation measures in the existing building stock as well as building applications in the affected area for 12 months (§ 172 para. 2 BauGB in conjunction with § 15 para. 1 BauGB). The decisions are published in the Berlin Gazette (Gesetz- und Verordnungsblatt für Berlin).

Municipal right of first refusal

There has been considerable movement on the municipal right of first refusal. This practice for Environmental protection was very controversial. In 2021, a ruling by the Federal Administrative Court caused a stir. Such a right of first refusal may not be exercised on the basis of the assumption that the other buyer could presumably displace the tenants from the area in the future, the court in Leipzig ruled (judgement of 9 November 2021, ref.: BVerwG 4 C 1.20). The ruling of the Higher Administrative Court (OVG) of Berlin-Brandenburg of 22.10.2019 (ref.:10 B 9.18) was thus overturned - the complaint of a real estate company was upheld. The consequence: According to the ruling, the Berlin districts can de facto hardly influence the trade in properties in Environmental protection areas.

Measures requiring approval

In addition, modernisations, conversions such as deconstruction and structural changes as well as changes of use are subject to approval in Environmental protection areas. The approvability of the project depends both on the policy of the district in which the property is located and on the individual negotiations with the relevant department. For example, a measure may be approved with the proviso that its costs are only partially passed on to the tenants, in deviation from the legal requirements.

Additional preservation area: urban character

In addition to social preservation areas, § 172 (1) sentence 1 no. 1 of the German Federal Building Code (BauGB) also provides for areas designated for the preservation of urban character. The aim is to protect characteristic building styles and usage structures. This includes, among others, the Karl-Marx-Allee, Westend, Kurfürstendamm, and Friedrichstadt.

Rent control (Mietpreisbremse)

With the tightened rent brake, the Berlin housing market is characterised by another controversial topic in addition to the protection of the milieu. The rent control has applied throughout Berlin since its introduction in June 2015. Additional tightening has been in force since 1 January 2019, and in August it was also decided to extend its validity by five years until 2025. Almost simultaneously, the Federal Constitutional Court ruled that the Mietpreisbremse was not unconstitutional.

Exceptions for new construction and renovation

Newly constructed buildings first rented after October 1, 2014, are exempt from the rent control (Mietpreisbremse). Fully modernized apartments, where the modernization costs amount to at least one-third of the new construction costs, are also exempt during the first rental following the modernization.

Modernization surcharge

The modernization surcharge remains at 8%. For apartments with net cold rents below €7/m², rent may increase by a maximum of €2/m² within six years; for higher rents, the maximum increase is €3/m². Since 2024, climate-friendly modernizations according to GEG standards benefit from tax incentives and simplified surcharge conditions, provided funding is utilized.

Digitalized rent index obligation

Since 2023, there has been a mandatory rent index (Mietspiegel) requirement for cities with more than 50,000 inhabitants. For Berlin, the 2024 rent index is authoritative and is based on a significantly expanded data set.

Repayment obligation

Tenants can reclaim overpaid rent retroactively for up to 30 months.

The Conversion Ordinance

The Conversion Ordinance in Berlin places the conversion of rental apartments into condominiums in protected social preservation areas under a permit requirement. A permit is generally only granted if the owner commits to selling the apartments exclusively to the existing tenants for a period of seven years.

§ 250 BauGB: Permit requirement for conversions

Since the 2021 Land Mobilization Act (Baulandmobilisierungsgesetz), a permit requirement applies throughout Berlin for residential buildings with more than five apartments. The federal legal basis (§ 250 BauGB) has been extended, meaning the permit requirement will continue from January 1, 2026, and remain in effect until the end of 2030. This regulation takes precedence over existing social preservation ordinances.

Milieu protection in Berlin – strategic advice for your success

Is your property located in a protected social preservation area, or is there a resolution for designation? Even if your property is not within one of the social preservation areas, it is important to understand the associated changes and your available options. Current political trends indicate that in the future, milieu protection will be increasingly linked to municipal acquisition strategies and energy-efficiency requirements.

We are happy to provide you with further information at any time, in person, by phone, or via email. Our team of more than 100 real estate experts for the Berlin residential and commercial building market looks forward to hearing from you.