Case Studies  The Karolinenviertel Case in Hamburg - St. Pauli

Role of the private proprietors

Private proprietors and owners are subject to certain legal premises and limitations in formally designated redevelopment areas. Mainly there are two things concerned: Sales contracts require official approval to avoid speculations and owners are committed to participate financially in the entire public investments for the area-measures after the end of the redevelopment procedure. The procedure to raise these balance-payments is not entirely used like it is possible by the legislation due to high administrative expenditure.

Opposite to the restrictions mentioned stand the investment incentives. Only a private owner in a formally designated redevelopment area can apply for public means for the redevelopment and modernisation of his property. As service in return the city receives the right to rent the apartment units and the owner commits to a limitation of the rent prices for a certain period of time. The experiences show that private owners often only use these means for the redevelopment of apartment units. Commercial spaces are being redeveloped most of the times without public funding since these investments can be relatively fast refinanced by renting the spaces to higher prices.

Looking back on the past twelve years private owners have very much hold back investments in the Karolinenviertel. Instead the city went ahead for example by redevelopment of approx. 20% of its housing stock with public means by STEG as well as the realisation of surrounding measures. Meanwhile the situation is changing and increasingly private owners and project developers invest in the area. This shows the increase in real estate sales and new building projects. Due to the ongoing physical redevelopment, realisation of profit expectations becomes more realistic and the exploitation interest becomes higher. Additional private capital increasingly flows into the neighbourhood. At the same time social restructure is being promoted since private intentions often relate to high price housing.

The owners are therefore important partners for the entire development and are at the same time the biggest profiteers. The experience shows that private owners are not participating in the same amount in the overall costs like this would be actually possible and necessary. This is one weak point of the redevelopment procedure from the point of view of the editors. Against the background of declining public funds a transfer of responsibilities inevitably has to take place in the future in order to take owners more into duty. However, the economic interests of private owners have to be taken into the strategic consideration. The creation of win-win-situations for the public administration and private owners is to be aimed at.

But there are also more or less positive examples for public-private partnerships which are being described in this case-study at another place in detail. For example the projects ‘Sprungschanze’ and ‘Sternquadrant’

3.3. Role of the inhabitants    3.5. Role of the entrepreneurs