Excerpt of the article of the NY Times:
Public Housing in Private Hands
By MARK LANDLER
Affordable public housing is a pillar of the German welfare state, and the prospect of vast pieces of it falling into the hands of pinstriped financiers from New York or London has unsettled many people here. In Dresden, 45,000 of them signed a petition opposing the sale.
“When a new owner is profit-oriented, it brings changes,” said Peter Bartels, the chairman of the Dresden renters’association. “We’re not sure yet what kinds of changes. But we know there will be changes.”
Foreign private equity investors, mostly American and British, have already spent $25 billion since 2003 on apartments owned by German cities and companies. With the owners hungry to raise even more money, analysts forecast that 750,000 additional units will be sold over the next five years.
The acquisitions have not been limited to residential real estate. A property fund owned by Goldman Sachs paid $4.7 billion in March for a controlling stake in the real estate holdings of KarstadtQuelle, Germany’s largest department- store chain.
“The heavy money in London and New York sees a lot of money in German real estate,” said Allan Saunderson, managing editor of Property Finance Europe in Frankfurt. “We are at the beginning of a long process that will see a large chunk of Germany’s public-sector housing sold.”
The foreign appetite dovetails nicely with Germany’s needs: virtually every major German city is awash in debt. And with the limited health of a convalescing German economy, they have had few other ready ways to raise funds. Thanks to its sale, Dresden can promote itself as the first debt-free major city in the country.
