The urban renewal policy Stadtumbau Ost and the recent changes in the local governance of Eastern German towns and cities

In the face of economic restructuring, demographic changes, fiscal constraints, housing vacancies and the physical decay of buildings, local governments in Eastern Germany have discovered urban renewal (Städtebauförderung) policies as a key instrument to deliver change. Policy regulations set up by governments at federal (Bund) and federal state (Länder) level and the institutional arrangements of German federalism, however, frame local governments’ scope for action. Since German unification, Bund and Länder set up several urban renewal policies. Innovations included: a growing diversity of strategic aims and discourses on urban problems; a turn from complex thematic to single-issue approaches; the shift from long-term engagement to short-term intervention; and the endorsement of new local decision-making mechanisms such as partnerships. The paper explores how the urban renewal policy Stadtumbau Ost unfolds in, and impacts on, different places. Drawing on two case studies, it examines how local governments in Eastern Germany have positioned themselves with regards to the demolition and physical rehabilitation of housing stock and public-private co-operation in decision-making and policy implementation. Research revealed different local approaches to decision-making and affordable housing provision, but also the selective nature of the financial incentives provided. In Greifswald, local government, the municipal housing agency and the housing co-operative forged a deal on physical rehabilitation and demolition of housing stock in order to claim public grants and realise economic advantages. The deal matched the intentions of Bund and Länder, but excluded third parties and resulted in the decline of affordable housing. In Stralsund, local government and housing companies failed to negotiate such a deal and, thus, to benefit financially from the Stadtumbau Ost. This was due to struggles over economic issues, different rationalities of landlords involved in decision-making and the power of private property rights. In turn, there was no significant negative impact on affordable housing.