Real Estate Locusts: Part 1 – Developers Cash in on Europe’s Poorest

Published on Spiegel Online International, by Özlem Gezer and Andreas Wassermann, March 07, 2013 (Photo Gallery).

International financial investors have spent billions to gobble up cheap real estate in Berlin. But a look at Scharnweberstrasse 111 shows how they and their ruthless middlemen are exploiting immigrants from Southeastern Europe to make profits. 

Their offices are in places where a lot of money is turned into even more money: in Luxembourg, the City of London and on Lake Geneva. They deal in shares of companies in Asia and Africa, and in real estate in Europe. They own more than 6,000 apartments in Berlin. Narghita lives in one of them.

Narghita, 27, is from Romania, a member of the Roma ethnic group. She has never met the owners of her apartment. There is no heat, and she has covered the mold on the walls with mint-green paint. The toilet hasn’t been working for weeks, and her three children urinate in the bathtub. She found her furniture in the garbage and poisoned the rats in the apartment she occupies on the ground floor of Scharnweberstrasse 111 in Reinickendorf, a northwestern district of Berlin.

For a long time, Narghita believed that Marcus Harstel owned her apartment. He is the chairman of an association called “Anker e.V. – Berlin in 2010.” According to its bylaws, the association doesn’t aim to make money. “We make people strong,” reads Anker’s motto — strong, so that they’ll have better opportunities.

Anker brokers run-down property owned by international investors to the poor: ex-convicts, the homeless and immigrants. The association, founded in Berlin in 2010, devotes special attention to the Roma and Sinti ethnic groups, which as Anker officials say, “were living in public parks under completely grim hygienic conditions.” According to the bylaws, Harstel and his colleagues aim to “improve” living conditions for these people and place them into “adequate” living spaces.

These are nice words and noble objectives. In reality, however, they are nothing but an inhumane form of cynicism. Anker, the association that is supposedly devoted to the well-being of the weak, was actually providing real estate speculators with undemanding tenants until recently — and, in the process, its chairman was apparently funneling hefty sums into his own pockets. This ruthless business model is widespread in Berlin, one of many cities in Europe where poor immigrants go.

One reason the model works is that Romania’s accession to the European Union in 2007 has almost tripled the number of Romanians in Germany, bringing it to 205,000 today. The poverty-stricken immigrants among new EU citizens work for €3 ($4) an hour, have no health insurance and usually don’t speak German. And since German municipalities are overwhelmed by the onslaught and usually have no political plans for countering this migration of tens of thousands of people, immigrants like Narghita fall in the clutches of people like Marcus Harstel and of real estate companies headquartered in tax havens.

Exploiting the Helpless:

Narghita arrived in Berlin in the fall of 2011. She lived with relatives for the first few weeks, and then she began looking for her own apartment. But she isn’t registered, has no proof of income and no credit history — all the things that are normally required by a housing agency in Germany. Harstel, the head of Anker, doesn’t need these things. All he cares about is that Narghita pays her rent: €705 ($915) for a one-room, 33-square-meter (355-square-foot) apartment, heat excluded.
Harstel collects the rent at the door. Like the other Roma families living in the building in a back courtyard at Scharnweberstrasse 111, Narghita pays her rent in cash. And when someone is unable to pay, say Narghita and her neighbors, Harstel threatens them with his “dogs” — broad-shouldered Turkish and Arab thugs … //

… (full text).

Part 2 – Turning a Blind Eye.

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