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Archive: The Capital City of Berlin - Documentation

Development-Related Increases in Land Values

Increases in land prices are caused by the planning laws, which made the quantitative and qualitative utilisation of building land possible, together with public investments. These increases do not result from overall market developments but from the increased attractivity of the land. The construction of roads, creation of green areas and the building of day-care centers and schools positively influence the land prices in the development area. These increases in land prices are claimed as compensating amounts from land owners and used in financing the development measure. The compensating amount is the difference between the initial value, which exists before the concentrated public influence on the development of an area and the end value - the value after the goal of the development measure has been realised. This sum is levied for each building lot in the development area.

An example: A site was used as a green area at the cut-off date and taken over into public use under the Green Areas Law from 1997. A local plan was established for the green area, which included the construction of residential accommodation on part of the area. Intensive investment in the development of the area was carried out. The initial value of a green area is relatively low from an economic standpoint. However, through the development in the area and the realistic possibility of building on the land, its projected value is high. The compensating amount is thereby correspondingly high. It flows into the budget for the development measure.

This income was estimated as amounting to around 250 mill. euros and at the end of 2006, a volume of some 135 mill. euros had been reached. This income reduces the demands on the budget of the Federation and the State of Berlin according to the proportion of their financial involvement. As the development measure nears completion, then surpluses will be divided between Federation and State in the same proportion as the financing of the development was divided.

From the standpoint of the economical and careful use of budgetary funds, the Senate Department and DSK aim, to adjust the earmarked income as far as possible to the necessary expenditure. Compensating amounts are continually being levied, in order to reduce the expenditure for the development measure and thereby reduce the demands on the state budget.
1997 - Topping-out ceremony,  new construction at Jägerstraße 32; Photo: DSK, Arno Pluschke
1997 - Topping-out ceremony, new construction at Jägerstraße 32,
Construction activities generate income
Photo: DSK, Arno Pluschke