In Germany, the Tenement Housing Syndicate (Mietshäuser Syndikat, or MHS for short) has found an unusual way of achieving bottom-up rent control and the de-privatisation of market housing inventories. The MHS uses existing legal and economic instruments—but once a building comes under its umbrella, there’s no chance of it returning to the commercial real estate market. In recent years, this concept has become increasingly popular in Germany, and it’s currently expanding into new areas, including the construction of new houses and collective ownership of agricultural land.
In the Southwestern German town of Tübingen, I met Marc, a member of the MHS, at a Housing Action Day demonstration—a civil action demanding the expropriation and socialisation of housing corporations in Berlin. Even with strict Covid restrictions, the demonstration filled Tübingen’s square. Housing costs aren’t only rising in large urban centres like Hamburg and Berlin: Tübingen is among the most expensive residential areas in the Federal Republic.
Located in the Neckar valley, the university town has become a base for medical clinics, research centres like the Max Planck Institute, and companies like CureVac, which is developing a vaccine against Covid-19. The specialised workers coming here are creating price pressure and increasing housing demand, and the development of a Cyber Valley in the Neckar—an investment in artificial intelligence research facilities that, it’s hoped, will attract giants like Amazon and the German auto industry—is yet another reason for lower-income residents to fear being pushed out by techies flocking in. Due to the lack of cheaper flats for rent, students often are forced to occupy basements and attics.
A psychologist by profession, Marc, however, is not afraid of losing his apartment or having his rent raised. He’s a tenant in one of the so-called housing projects (or Wohnprojekt) developing under the umbrella of the MHS. He invites me to see the 4-Häuser Projekt, one of eight MHS-affiliated projects in Tübingen. As the name suggests, this one consists of four buildings, which served as homes for French garrison military personnel stationed in the city until 1991, and then as housing for medical staff at the university clinic.
Renovated and tidy, the two-storey, multi-family house with a red-tiled roof and centrally located staircase looks friendly. It’s distinguishable from other houses by the multi-colored window trim, the organic ‘let it be’ maintenance of gardens, and a smattering of banners hung on the fence and patio bannisters. The banners call for the fight against climate change and express opposition to the forced return of refugees to Afghanistan.
What’s a Housing Project?
These housing projects stem from the 1970s and ’80s. Under one roof are individual apartments occupied by families, singles, or pensioners, as well as so-called Wohngemeinschaften, or WG, which are apartments cohabited by flatmates of various ages and professions.
The 4-Häuser Projekt houses are not a concentrated housing complex. They’re scattered at different lots along the street. Marc draws my attention to the ground floors rebuilt by the residents themselves, allowing families living on the same floor to have independent access from the yard. Altogether, the four buildings are inhabited by one hundred people, including forty children. New roof tiles, added a year earlier, are covered by photovoltaic panels. Bicycles are parked in front of the entrance.
We enter one of the units. The presence of children is noticeable; there are toys everywhere. On the mezzanine there’s a large bookcase filled with dozens of shoes. We go to sit in the meeting room, and the sound of a hammer drill can be heard. Marc explains that they’re currently working on an extra room for guests.
‘This continuous development and change is underlined by the collective name of what we do,’ says Marc. ‘It’s always a ‘housing project’—never something completely finished; rather, a structure that we transform as collective needs change.’ I ask if it’s related to the history of the squatters’ movement. ‘Yes, and not at all,’ Marc replies—‘though there would be no MHS without the squatting movement.’
The idea of the syndicate was born among those who occupied an abandoned machine production factory in Freiburg im Breisgau, another university town near the French border, in the 1980s. These were the heydays of the squatting movement, and young people, in light of accelerating deindustrialisation and the flight of the middle class to the suburbs, occupied abandoned buildings in the large cities. They established centres of extra-parliamentary political activity, social initiatives, and independent cultural projects within their walls, with the intention of building an ‘alternative society’. Squats served also as dwelling-places.
But big capital returned to the centres of the big cities in a new form, and the era of gentrification began. Protracted conflicts over property rights and outbreaks of police violence pushed older squatters to seek a new framework for their activities. Most squats have now disappeared from city maps; a few turned into legal—or at least tolerated—youth and cultural centres. Some started to think of buying the property out, but bought-out property could again be an object of commodity trading. In Germany, people looked for legal means to avoid that outcome.
Escape the Spectre of Re-Privatisation
Founding a housing cooperative was the first idea of the future syndicalists in Freiburg. Democratic control, autonomy and independence, cooperation, and care for the local community—the principles of the cooperative movement seemed to fit perfectly with the planned enterprise. However, this form of shared ownership did not guarantee that it would be sustained as such in the future. Through a qualified majority, the general meeting of cooperatives could lead to the re-privatisation of cooperative property. The goal, instead, was to remove the property permanently from the market circulation—described as the ‘neutralisation of capital’.
The Freiburg project decided to use an organisational form derived from the very core of the capitalist system: a limited liability company (in German, Gesellschaft mit beschränkter Haftung, or GmbH), which offered a vital feature—the possibility of establishing the asymmetry of its constituent entities. This meant every housing project would be given full autonomy of self-determination, with one exception: the ability to re-privatise. In this case, the right of veto belongs with the partners of the company—the entity representing the entire syndicate, meaning all housing projects associated with MHS. If one group wanted to take ownership of the building or sell it, all others in the syndicate have a tool to stop it. The road to re-privatisation was closed.
At first glance, this might seem complicated; in practice, it’s not. New groups that want to jointly acquire or build a house form an association (Verein). The size of the group varies from a few people to dozens. The key part of the process is developing a financial plan, upon which the future rent level depends, alongside its acceptance as a part of the syndicate.
Newcomers, however, don’t have to organise everything by themselves. MHS offers free volunteer assistance to ensure that the new groups are aware of all the necessary steps. When their plan is cohesive, a new project group will present the concept at the general meeting of the syndicate, held three or four times a year. If approved by the general assembly, another phase begins: the formation of a company (GmbH) between the housing project association and the syndicate. It’s this company that will be the entity purchasing and managing the property.
The Tenement Housing Syndicate itself is also a limited liability company, but its sole shareholder (Gesellschafter) is the association of the same name, Mietshäuser Syndikat. The association is made up of all previously attached syndicate groups, house associations, and private individuals.
I query this inclusion of private individuals, asking Marc if it’s possible to create home projects individually. He says no. ‘These individuals are people who don’t live in any of the syndicate houses, but their presence is crucial to the entire structure,’ he explains. ‘These are people who joined the MHS association for ideological reasons or those who used to live in housing projects, and although they moved out due to changing life circumstances, still feel attached to the syndicate. Importantly, they have no material interest in supporting a possible re-privatisation. They are a safety brake in case all other associations suddenly want to privatise the Syndicate—which, nonetheless, seems unlikely.‘
One of the reasons this is unlikely is the sheer scale of the project. The growth of the Syndicate, and therefore the amount of wealth permanently withdrawn from capitalist circulation, is accelerating. In 2015, MHS had about 100 housing projects. Currently there are 174, and an additional sixteen candidate initiatives. In its thirty years of operation, the Syndicate has suffered only one failure: a large project based in a historic country house a decade ago, which, in the face of increasing costs for a lengthy renovation, was forced to file for bankruptcy.
There is a full stylistic and functional diversity among the buildings taken over by the Syndicate. Among them are villas from old suburbs, former military barracks, old tenement houses, more contemporary residential buildings, a former office building, and even a train station. Building completely new structures is not outside its scope, either. A modern building in an attractive district of Hamburg has recently been completed. The space offers 1,400 square metres of workshop space for craftsmen, renovation companies, and freelancers associated with the project.
The total residential area of all the Syndicate buildings accounts for approximately 150,000 square metres, with an additional 25,000 in usable space for business activities. MHS’s buildings are inhabited by around 4.5 thousand residents. The value of all properties was estimated in 2021 at around 280 million euros, which equates to the amount of ‘neutralised capital’. As one person in a documentary made about the Syndicate put it: ‘The whole trick is that this value will never be realised on the market again.’
The Functional Questions
But just saying ‘buy the building’ is easy. Where does the money come from? For most people living in Syndicate homes, investing individually in any real estate would probably be inconceivable—but I’ve seen a financial plan of over one million euros managed by ex-squatters. How do they get those sums?
As of 2020, the inhabitants’ own contribution to the purchase of real estate was only seven percent of the required funds. Thirty-nine percent is direct loans borrowed by private individuals—often family members, friends, or people who identify with the idea of the Syndicate. In the case of the 4-Häuser Project in Tübingen, the lender was the city council. For lenders, the syndicate offers the possibility of a transparent, social, and sustainable investment without passing money through a bank. It’s often unclear what happens with the money in savings accounts or equity funds, or what’s financed with them; crediting MHS projects, on the other hand, means individuals know they’re funding something valuable for the community. They are also paid back with three percent interest—far more than the banks offer for keeping money in an account nowadays. In turn, the sums collected by MHS through direct loans are treated by banks as the Syndicate’s own contribution.
The remaining fifty-four percent of funding has been covered by bank loans, which in the beginning was not an easy process. Cooperative bank GSL, an institution specific to German culture stemming from the anthroposophical movement of Rudolf Steiner, led the way. ‘We no longer have this problem,’ Marc explains. ‘Now it’s us who choose the institutions, which are, from our point of view, the least ethically suspicious.’
Finance and the Method of Replication
Obtaining creditworthiness is one thing. Paying off the loans is another. The Mietshäuser Syndikat is based on three principles: shared ownership, self-organisation, and solidarity. These are nice slogans to hang as a banner, but they also have specific financial dimensions.
The financial plan for each new housing project includes start-up basics like the cost of acquiring the property and renovating it, which is obligatory under German law. It includes a repayment scheme, a forecast of future monthly spending, shares transferred to the Syndicate solidarity fund, and more. Future residents can knock down the rent level by, for example, carrying out renovations personally. Dividing the final costs by number of square metres gives the rent rate, which will be paid by inhabitants. Such a rate level stays forever. Nobody will ever raise it. That’s the sole decision of the Wohnprojekt itself.
But also, after paying off the loans, it won’t be reduced. The difference goes to the funds of the Syndicate and is used to support new projects, now also given in the form of direct loans. Public relations activities, legal support, and the aforementioned consulting for newcomers are also funded out of this pile. A Syndicate with a solid pool of financial resources is also a safe loan warrantor for emerging projects, one of the most important parts of the organisation. The sum of solidarity contributions paid in year 2020 reached €350,000—seven times more than the amount collected a decade earlier.
The most important feature of this system is that rents calculated this way come out much lower than those of the commercial market. Practice shows that this difference grows in favour of the Syndicate over time.
On the other hand, if the rent of a given project would exceed eighty percent of average local rates, residents may apply for a partial remission of the contribution paid to the Syndicate. That means apartments under the MHS umbrella always offer more favorable rates than those on the commercial market. In Grether—Freiburg’s first building complex converted in this model—rents are now two to three times lower than in neighboring locations. The ‘syndicalists’ pay €5.70 per square metre, while the average prices in the city in 2021 ranged from €13.5 to over €17 per square metre—and don’t forget that part of the rent paid in Grether goes to the joint fund of the Syndicate for the development purposes of the entire group.
In its publications, MHS provides descriptions of all projects along with the parameters, including year of purchase, size of land and living space, number of inhabitants, purchase costs, rent per square metre, and the amount of the contribution to the Syndicate. Full transparency is key.
The houses, meanwhile, are self-governing. Every project keeps its own full accounting, administers the building, and carries out repairs. In addition, MHS has its own publications and organises general meetings and activities for the benefit of the local community. MHS does not support any political party, but it goes without saying that it’s a left-wing institution. One of the tools used to counteract the atomisation of housing projects is the rule that every tenant should be involved in at least one working group. There are no passive observers.
Back to the Motherbase
Later, I’m hosted by Howard and Jochen at the syndicate’s birthplace in Grethergelände. Howard is a sixty-year-old American from Chicago, a musician and a translator, who came to study in Europe and stayed. The other inhabitant, Jochen, is an accountant and joined when a new apartment block was added.
The Grether complex on Adlerstraße is a former machine factory and metal foundry established in 1888. One hundred people currently live here. Inside the courtyard grows a beautiful lime-tree; walls are entwined by lush grapevines and flowering shrubs of climbing roses. In addition to the apartments there are two busy kindergartens, a radio station and small printing house, a food cooperative, and a café. Smaller operations have fit in with a photo studio, a ceramics workshop, and an antique shop.
There are local offices of aid organisations, such as Rosa Hilfe, which supports the LGBT + community, and the feminist Women’s Centre. In the Rasthaus, refugees and immigrants, without being asked for papers or insurance, receive medical and legal advice. They can also participate in a German language or Computer Science course. When I enter the courtyard, a dozen people gather at the coffee table waiting to participate in one of the activities.
This location hasn’t always had a history of cooperation, as indicated by a plaque unveiled by the inhabitants of Grether on 1 May 2021. During World War II, the factory was a site of slave labour. Syndicate members financed a professional historical inquiry, and now fifty-two of the inmates are known by name, many of them from Eastern Europe. A brochure was published documenting the research and reconstructing the tragic fate of the workers. It’s a moving gesture of the bottom-up maintenance of the historical memory of an inglorious past—antifascism in action.
Grether is comprised of three separate housing projects, managed by separate company associations. The western part was seized in 1980. After long battles with the city authorities, an agreement was struck in 1987 which included the transfer of the land into perpetual lease for seventy-five years. The eastern part was bought out in 1995, when the former metal foundry had to undergo long-term renovation and subsequent reconstruction due to high pollution levels. The south part was the last to join in 2000—Howard lived here before the building came under the syndicate umbrella.
I ask him what the pioneering phase was like. ‘Before, as individual tenants, we didn’t know each other,’ he says. ‘We didn’t know people of Grether, either. They were our neighbours, but we weren’t in close contact.
‘When the owner of our building decided to sell the property, we began to look into the future with uncertainty. Would we have to leave our apartments? Then our neighbors from Grether showed up and asked if we wanted to buy out our building. We said we didn’t have that kind of money. They told us how it could work.’
Howard mentions how stressful it was. In a short time, all tenants had to get to know each other, agree on their preferences, and set up an association. The purchase transaction took place after a few months.
Given this stress, I ask Grether’s residents about conflicts. They happen in larger groups, especially in those that need to solve problems on the go and are working without imposed scripts. How do they deal with it? ‘Conflicts are, of course, inevitable. We know that sooner or later they will arise, and each new group must be prepared for it,’ Howard says. ‘Just like you plan to spend on renovation or water bills, you need an anti-crisis fund to resolve conflicts.’ That Mietshäuser Syndikat plans for the use of professional external mediators helps explain its success.
Jochen adds they have just decided to further expand the structure of the syndicate in Germany. The MHS Foundation has been established, which will allow the syndicate to enter new areas. Among other changes, it will facilitate the acceptance of testamentary records. Regional branches have been created in order to fast-track the expansion in a non-centralised and flexible mode, and at the end of October of 2020, together with the cooperative network Solidarischen Landwirtschaft (or Solidarity Farming), MHS established Ackersyndikat (Agricultural Syndicate), which is the equivalent of a housing structure, but will enable de-privatisation and the commonisation of agricultural land.
Its influence has now begun to cross national borders, too: projects in a similar model are being developed in the Netherlands, Austria, Spain, and the Czech Republic. The hope, among those involved, is that similar projects might be set up elsewhere, including where laws or the political landscape make things particularly difficult. Only once those efforts take root despite that hostility, Jochen says, will the project truly be a success.