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Urban Geography, 2011, 32, 1, pp. 105–128. DOI: 10.2747/0272-3638.32.1.105Copyright © 2011 by Bellwether Publishing, Ltd. All rights reserved.

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SPRAWL WITHOUT GROWTH IN EASTERN GERMANY

Stephan Schmidt1

Department of City and Regional Planning Cornell University

Abstract: This article examines sprawl without growth in former East Germany at a number of different metropolitan scales using a dataset from the Bundesamt für Bauwesen und Raumordnung (Federal Office for Building and Regional Planning). Specific political, social, and economic circumstances in eastern Germany following reunification distinguish it not only from other declining regions, but also from some of its post-socialist neighbors that underwent similar urban spatial transformations after the fall of communism. Explanations for this phenom-enon include: increasing incomes and latent demand for housing, which remained suppressed under communism; specific policies adopted after reunification that subsidized greenfield devel-opment at the metropolitan fringe; a lack of planning at the local, regional, and state levels in the immediate aftermath of reunification; and changing demographic patterns. Although a number of the factors exacerbating sprawl in the post-reunification period have disappeared, overall demo-graphic decline in eastern Germany continues. [Key words: Germany, Eastern Europe, sprawl, post- socialist.]

Suburban growth in metropolitan regions that are otherwise declining both economi-cally and demographically is a somewhat new phenomenon to the Western world, and does not lend itself well to more traditional planning tools or modes of analysis that are gener-ally organized around understanding and accommodating growth.2 This is because the two primary indicators commonly used to explain urbanization trends—population growth and employment/ job accessibility (Glaeser & Kahn, 2003)—are absent, and explana-tions instead tend to involve the restructuring of urban activities and political economic changes rather than demographic growth. These urban regions face unique problems and require specific planning tools to address these complementary, intertwined, and paral-lel processes. However, for the most part, the planning profession has concerned itself with understanding and mitigating the negative consequences of suburban development, as opposed to addressing urban decline (Downs, 1999).

Commonly associated with North American cities, sprawl without growth has received increasing attention in Europe, particularly since the fall of the Iron Curtain, as cities and regions face post-socialist economic and political restructuring against a backdrop of long-standing demographic decline. This issue has been especially acute in Germany (Müller and Siedentop, 2004; Nuissl and Rink, 2005), and cities in eastern Germany (here defined as the former East Germany, or GDR) have begun addressing shrinkage directly and even planning for it (Beetz et al., 2008; Weichmann, 2008). This is not without good reason. Since reunification, eastern Germany has witnessed extensive suburban sprawl without

1Correspondence concerning this article should be addressed to Stephan Schmidt, Department of City and Regional Planning, 313 West Sibley Hall, Cornell University, Ithaca NY, 14850; telephone: 607-254-4846; fax: 607-255-1971; email: sjs96@cornell.edu2I am using the term “growth” here not in the economic sense, but rather to refer to land use change, and in par-ticular the amount of land consumed by urban or transportation uses.

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subsequent population and economic growth. Between 1995 and 2005, eastern Germany saw a population decline of the 5.1%, while the amount of land devoted to urban uses increased by 12%. Population loss was even greater in certain central cities.3 In addition, eastern Germany also witnessed declining densities during the same time period. These statistics are not unlike those of declining Rustbelt cities in North America. However, due to historical circumstances, eastern Germany faced a unique set of conditions after reunification that distinguishes it not only from other shrinking cities but also from some of its other Central and Eastern European (CEE) neighbors with which it shares a common past.

The purpose of this study is to explore the characteristics of and explanations for sprawl without growth in eastern Germany following reunification by utilizing time series data from the Bundesamt für Bauwesen und Raumordnung (BBR) (Federal Office for Build-ing and Regional Planning), and more specifically its Indikatoren und Karten zur Raum und Stadtentwicklung (INKAR) CD-ROM (BBS, 2007). I argue that eastern Germany has faced a number of forces simultaneously, some unique (in particular its political reunifica-tion with former West Germany), some resulting from the post-socialist transition affect-ing all of Europe east of the former Iron Curtain, and others more universal in nature that have stimulated peripheral development within the context of overall decline. These forces include: (1) increasing incomes and latent demand for housing, which remained sup-pressed under communism; (2) specific policies adopted after reunification that subsidized greenfield development along the metropolitan fringe, often at the expense of inner-city development; (3) a lack of planning at the local, regional, and state level in the immediate aftermath of reunification; and (4) changing demographic patterns that affected rates of housing consumption.

This study is organized as follows. First, I examine some of the literature on urban decline after the fall of the communist bloc, noting some common trends. Second, I intro-duce the dataset to be used to undertake the analysis, noting some strengths and weak-nesses. Then I characterize the nature of urbanization and explore some of the forces shaping sprawl without growth in eastern Germany. Lastly, I discuss some of the broader implications for the end of the post-socialist period of urban development.

SPRAWL WITHOUT GROWTH

Urban and regional decline is the result of a number of factors that have resulted in dis-investment in central cities. These include economic restructuring (especially the failure of cities and regions to diversify their economies), technological advances that increase mobility, and government policies such as subsidies and tax breaks for suburban develop-ment. “Shrinking” cities can be found the world over, but tend to be concentrated in Japan, North America, and Europe (Oswalt, 2006). Research has largely focused on American cities, some of which have seen population decline for decades. This has been attributed to a wide range of factors including rising incomes, internal migration, racial discrimina-tion, rates of automobile ownership, political fragmentation, federal housing policy, and transportation investment patterns, among others (see Downs, 1997 and Fishman, 2004

3Between 1995 and 2005, Frankfurt an der Oder lost 21.1% of its population, Hoyerswerda 29%, Haale 16.1%, Cottbus 18.2%, and Dessau 15.9% (BBR, 2007).

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for a more comprehensive, though U.S.-specific, analysis of urban decline). Simulta-neous suburban sprawl and central city decline are often interpreted as complementary phenomena, leading to seemingly contradictory circumstances in which even though a metropolitan area may be growing both demographically and economically, its central city continues to lose population and vitality (Rybczynski and Linneman, 1999). Nevertheless, the causal relationship between sprawl and urban decline is not straightforward (Downs, 1997). Pendall (2003) examines sprawl without subsequent economic growth in upstate New York. He attributes this both to structural conditions (fragmented local governance with limited jurisdictional ability to annex) and explicit policies that promote sprawl, such as infrastructure subsidies favoring outlying locations and disincentives to reinvestment in cities.

Like shrinking cities and regions the world over, the cities of Central and Eastern Europe also faced economic restructuring, deindustrialization, and depopulation after the fall of the Soviet Union. Mykhnenko and Turok (2008) examine population change in 150 CEE cities. They find that compared to the 1960s and 1970s, when both absolute and relative urban population was increasing, the 1980s and 1990s have seen a reversal, with wide-spread urban population contraction. They attribute this change largely to demographic factors—falling fertility rates and the replacement of rural-to-urban migration with inter-national out-migration—rather than specific urban factors. In turn, migration is partially affected by the legacies of the inefficient and technologically obsolete socialist economy with its underdevelopment of the service sector and dearth of small and medium-sized enterprises (Hamilton, 2005), all of which have led people to seek their economic fortunes elsewhere.

As with other declining cities and regions around the world, many CEE cities also expe-rienced suburban growth during this period of contraction (Ott, 2001; Stanilov, 2007). This can be explained by a number of transformations, some of which are universal in nature and others that are specific to a given region. These transformations have been discussed in greater detail elsewhere (Tosics, 2005; Hamilton, 2005; Hamilton and Carter, 2005; Stanilov, 2007) and include, but are not limited to; the reestablishment of private property rights and real estate markets, the decentralization of political power and proliferation of actors involved in the urban development process, a reduction in the role of the state in affecting consumption patterns and providing public services, a generally permissive plan-ning and regulatory regime, increased foreign direct investment, and an overall increase in mobility and consumer choice.

Tosics (2005) notes that these impacts have had differential effects across CEE in terms of speed, scale, and extent. For example, foreign direct investment, although generally tar-geted toward CBDs of capital cities, has tended to favor countries in close proximity to the European Union, thereby neglecting cities and regions to the south and east (Hamilton and Carter, 2005; see also Smith and Swain, 2010). Mykhnenko and Turok (2008, p. 333) note, however, that cites in countries that are further removed from Western Europe “appear to have declined less than places that are more closely integrated, perhaps because travel and emigration have become easier for people…” That said, both Stanilov (2007) and Andrews (2005) identify some common effects these changes have wrought on post-socialist cities: the commercialization (and subsequent decrease in residential use) of the urban core, the revitalization of certain inner-city neighborhoods, the decline of socialist industrial zones and housing estates, and residential suburbanization.

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Following the fall of the Iron Curtain, a number of observers predicted that urban spatial patterns in the former Soviet bloc would increasingly mimic those in the west (Sykora, 1994; Haussermann, 1996) as these countries transformed themselves from socialist to capitalist economies. It was assumed that the East, where suburbanization (if it occurred at all) before reunification took the form of state-run public housing com-plexes, would take on functional and spatial characteristics of Western suburbanization (Pichler-Milanovic et al., 2007). In fact, there is evidence of exactly this kind of conver-gence. Like their Western counterparts, CEE countries have witnessed increased rates of car ownership, decreasing residential densities, a loss of open space, the suburbanization of retail and office functions, and subsequent increases in congestion, air, and noise pol-lution (Stanilov, 2007). Hirt (2007) notes that the suburbs of Sofia exhibit signs of class-based, Western-style suburbanization patterns, with more affluent households seeking a better quality of life. Pucher and Buehler (2005, p. 7) note that in Eastern Europe “[f]irms are locating in the suburbs for the same reasons they do in North America and Western Europe: convenience, lower cost, less regulation, greater land availability, less conges-tion, cleaner air, and access to the long-distance highway network.” However, there is also evidence that suburbanization patterns in Eastern Europe are more path dependent and are rather the product of specific circumstances (Musil, 1993). For example, Brown et al. (2005) find that population deconcentration and subsequent suburbanization in Hungary are at least in part the product of net in-migration from nearby villages and towns, and thus do not necessarily represent the more typical suburbanization demographics of Western European countries. In this case, the term suburbanization is a misnomer because it mis-represents the actual social process taking place. Stanilov (2007) notes that the sequence of suburbanization in Eastern Europe, featuring simultaneous residential, commercial, and office decentralization, suggests a pattern of “condensed evolution” compared with the West.

Eastern Germany has much in common with other declining regions around the world. The former East German economy, despite massive financial transfers, is marked by deindustrialization, the collapse of the manufacturing sector, and subsequent job loss. Aggregate productivity, measured as GDP per person, is only about 60% of that of for-mer West Germany (Sinn, 2007, 141). Unemployment is also rampant. In 2006, average unemployment (among those of employment age) in eastern Germany was 12.8%, while in western Germany it was 6.9%. Between 1995 and 2006, unemployment rates increased 4.2% in the East and only 1.1% in the West (BBR, 2007). Gross domestic product per capita in 2005 was €20,100 in the East verses €29,000 in the West. Between 1995 and 2005, the gross value added of the eastern German primary sector declined 16.5% (BBR, 2007). This is partially the result of the disappearance of the large segment of the ineffi-cient manufacturing sector after reunification.

In addition, eastern Germany also has much in common with some of its CEE neighbors, with whom it shares a common political, social, and ideological (recent) past. However, despite the parallel transformation since reunification, there are important differences. Certain national-level figures for comparative purposes are revealing (see Table 1).

Compared with some of its CEE neighbors, eastern Germany has a higher unemploy-ment rate, and with the exception of Bulgaria, has experienced greater population decline. This is partly due to its relationship with and incorporation into western Germany, mak-ing migration to the west easier. Foreign direct investment rates are also relatively low in

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eastern Germany compared to other CEE countries. Interestingly, population densities are higher than in other CEE countries, despite having declined since reunification, something that will be examined in greater detail. Eastern Germany is in many ways unique in its situation as when compared to other Eastern European countries, for a number of rea-sons. First, unlike other CEE countries, it did not face the challenge of providing service and infrastructure provisions alone, as many of the reconstruction costs were assumed by transfers from the West in the form of tax subsidies, loans, and intergovernmental trans-fers. Second, it was incorporated into and assumed the political, economic, and social institutional structure of former West Germany after reunification (Weissner, 1999). As a result, Western planning practices, governance structures, and regulatory practices were instituted by the federal government after reunification, ensuring that similar planning processes and procedures were followed in both eastern and western Germany. In addi-tion, eastern Germany has also benefited from a policy of income parity with its western counterpart. As indicated above, this has had some unintended consequences, because the amount of foreign direct investment in eastern Germany is generally less than in some of its neighbors such as the Czech Republic and Poland due to the relative labor costs. Fourth, eastern Germany faced a large out-migration from East to West, as easterners relocated to access better economic opportunities and prospects in the West. Although all of CEE faced some out-migration after the borders opened up, only former East Germany had a “west” to migrate to.

Table 1. Comparative StatiStiCS for Central and eaStern european CountrieS at the national level

Country

Percent population

change, 1999–2005

Percent unemployed,

2005

Persons per household,

2005

FDI per capita,

2001 (US$)

Density (persons per km2)

2005

Bulgaria – 10.1 2.70 – 70

Estonia –2.3 7.9 2.59 2263 31

Latvia –3.1 8.3 2.88 880 55

Lituania –3.9 8.9 2.82 696 37

Poland –1.3 17.7 – 862 122

Romania –1.3 7.2 2.94 – 94

Slovakia –0.2 16.3 3.22 803 110

Slovenia 1.0 6.5 2.67 1432 99

Czech Republic

–0.7 7.9 2.48 2012 133

Hungary –1.5 7.2 2.65 1517 108

Former East Germany

–0.051a 20.6 2.01b 690 154

a1995–2004b2004.Source: BBR, 2007, except FDI per capita which is from Gunther, 2004.

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METHODOLOGY

Previous studies of sprawl and decline in eastern Germany have centered on a particu-lar case study, such as Erfurt (Ott, 2001); but most of them have focused on Leipzig (see Nuissl and Rink, 2003, 2005; Bontje, 2004; Couch et al., 2005). Müller and Siedentop (2004) examine aggregate trends, but emphasize only population and urbanization pat-terns. For the most part, this research indicates that after a period of peripheral urban development, suburbanization has slowed since 2000.

This study will examine aggregate spatial trends in order to identify metropolitan growth patterns across all of eastern Germany. Realizing there are many definitions of sprawl, for the purposes of this analysis an area is defined as sprawling if its urbanization rate (the rate of change in the amount of land devoted to settlement or transportation uses) exceeds population growth. Sprawl without growth implies that the population is in actual decline, but urbanization is still occurring. Urbanization and population change are the indicators used in a recent European Environmental Agency report on sprawl (EEA, 2006). Therefore, to help understand overall patterns, the rates of urbanization, population, and density change will be examined for eastern Germany.

In addition, a number of indicators will be utilized to examine both the quality and quantity of new growth and development patterns in eastern Germany. Based on previous studies of urban change (Ott, 2001; Nuissl and Rink, 2005), a number of causal vari-ables are incorporated to explain sprawl without growth. These include income levels, new housing and automobile consumption patterns, government investment policies and foreign direct investment, the role and strength of planning, the number of building permits issued, and demographic variables including the number of single households, migration patterns, and fertility rates.

As noted above, the dataset used here is the BBR’s Indikatoren und Karten zur Raum und Stadtentwicklung (INKAR) CD-ROM (2002, 2007). Its benefits are numerous. It includes time series data for certain variables and perhaps most importantly it can be aggregated at several different spatial scales from the municipal to the federal level, with the landkreis (county) serving as the basic unit of analysis. Acknowledging the differ-ences between eastern and western Germany, the analysis will be divided into East and West. In determining patterns across metropolitan regions, the landkreise can be aggre-gated into a number of categories, including agglomeration areas (Agglomerationsräume), which include polycentric regions such as the Rhine-Ruhr and the Saxon Triangle, as well as monocentric city-regions such as Berlin; urbanized areas (Verstädterte Räume), which include second-tier regional cities such as Freiburg, Kassel, and Rostock; and rural areas (Ländliche Räume), which encompass non-metropolitan areas. Moreover, each of these categories are broken down further into subcategories based on density patterns as depicted in Figure 1.4 This hierarchical scheme allows us to determine the distribution of a number of indicators across metropolitan regions, from central cities to the rural fringe, as well as nonmetropolitan areas at the county level.

However, this dataset does present certain limitations. For example, there is no infor-mation on the spatial distribution of commercial and/or industrial development, a key

4Please see Appendix A for a full description of the classification scheme.

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indicator in examining suburbanization patters (Stanilov, 2007). Furthermore, whereas some variables have data for each year, others may only have it for a certain year, and some may show change only for a specified time period. These limitations inhibit the presentation of a more comprehensive overview that would capture the full extent of the suburbanization process during the post-reunification period. Third, with some notable exceptions, the dataset only goes back to 1995, so patterns prior to reunification cannot be examined. Finally, as the data are aggregated upward from the landkreis level, they may

Fig. 1. Settlement patterns by county (Landkreis) type. A. Agglomeration areas. B. Second-tier cities/urban-ized areas. C. Non-metropolitan areas. Source: Created by author, based on INKAR CD (BBR, 2007): Types of Settlement Structure of Regions and Districts: Instruments for Inter- and Intra-regional Comparison, 2007. See Appendix A for description.

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not necessarily overlap with actual spatial development patterns. Unless otherwise cited, all data are based on the INKAR CD. Where applicable, western German statistics are used to provide context.

AGGREGATE SUBURBANIZATION TRENDS IN EASTERN GERMANY

Between 1996 and 2004, urbanization, or the amount of land devoted to transportation and settlement uses, increased at a rate of 12% in eastern Germany (in the west, urban-ization during the same period was +7.5% [BBR, 2007]), and rates have been highest in second-tier cities and rural areas. In 1989, the population of West Germany was 61.4

Fig. 1B. continued.

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million, while that of East Germany was 16.7 million. Between 1995 and 2005, the popu-lation of the East declined 5.1% while population in the West increased by 2.4% (BBR, 2007). In the East, second-tier cities and nonmetropolitan areas that have experienced the highest urbanization rates have also seen the highest rates of population decline. In fact, rural areas adjoining major agglomerations were the only regions to experience population growth. This probably reflects exurban growth around suburban Berlin, which comports with Müller and Siedentop (2004) who find that the outskirts of Berlin are the only areas still growing in eastern Germany. Unlike other shrinking metropolitan areas, in which the central city loses while the suburban ring gains, population loss is pervasive throughout the metropolis. This is indicative of conditions in eastern Germany: population loss is

Fig. 1C. continued.

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not merely an instance of city-to-periphery migration but also a function of East-to-West migration. It should be noted that the West, which has seen modest population increases, has also experienced urbanization rates greater than population increases. Figure 2 indi-cates population change and urbanization rates for all county types in both the East and the West.

Others have noted that population decline in Eastern Europe did not necessarily begin in 1989, and has been a longer-term process (Mykhnenko and Turok, 2008; Brown, 2005). This holds true in eastern Germany as well: between 1980 and 2000, the population of former East Germany declined 7.5% (BBR, 2002). Figure 3 shows landkreise divided into three categories: (a) those in which the index fell between 0 and 1 (areas in which the rate of urbanization was less than the population growth, which suggests no sprawl); (b) those that score greater than 1 (implying population growth was greater than the rate of urbanization, which indicates sprawl); and (c) those that score less than 0 (implying a positive rate of urbanization coupled with negative population growth, which indicates sprawl without growth).

Whereas landkreise in the West tended to sprawl, population also increased, albeit at a lower rate. Eastern landkreise, on the other hand, with the notable exception in the zone around Berlin, tended to experience negative population growth coupled with increasing urbanization—in other words, sprawl without growth.

Decreasing density is one explanation for the observed disconnect between decreasing population growth and increasing urbanization rates. Simply put, fewer people consume more land than before as lifestyles and consumption patterns change. Between 1995 and 2005, density (the number of persons per km2) decreased 5.52% in eastern Germany while

Fig. 2. Change in population (1995–2005) and urbanized area (1996–2004) by county type for both eastern and western Germany. Source: BBR (2007).

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increasing 2.33% in the West (BBR, 2007). With the exception of the rural outskirts of the metropolitan periphery, the East saw overall declines in density, with the greatest decreases occurring in second-tier and nonmetropolitan areas. The landkreise that increased in den-sity are also those that gained in population during the same period (i.e., the rural fringe of agglomeration areas). This can be partially attributed to the fact that suburbanization under socialism generally consisted of large housing estates of fairly high density that have been abandoned or vacated since reunification. The West, on the other hand, saw modest increases in densities except for core cities (Fig. 4).

Fig. 3. Sprawl index score by landkreis. Index calculated as change in population growth, 1995–2005 divided by the change in urbanization, 1996–2004.

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Despite these changes, when comparing 2004 urban densities—defined as persons per km2 of urbanized area, generally a more robust indicator of density (Fig. 5)—we find that densities are fairly similar, despite falling densities in the East. As noted earlier, eastern Germany still has generally higher densities than other CEE countries.

EXPLAINING SPRAWL WITHOUT GROWTH IN EASTERN GERMANY

How does one explain these patterns? As discussed above, urbanization patterns in the East after reunification are the product of a number of influences, some of which are unique, whereas others are common to CEE countries undergoing post-socialist transfor-mation or even to shrinking cities in general.

Latent Demand and Changing Consumption Patterns

Urban growth since reunification has been explained as the latent demand for housing and space that remained suppressed under Communist rule. The withdrawal of the state affected both the demand side of the housing market, through the removal of limits to consumption, as well as the supply side, through both decentralization and privatization of housing provision (Tosics, 2005). Thus the combination of rising incomes, the introduc-tion of a functional private land market, mortgage financing (Stanilov, 2007), and a desire to improve the housing situation (Jetzkowitz et al., 2007) led to land speculation and sub-urban growth. As Hausserman (1996, p. 223) notes “…Given the release of property into the free market, such speculation could not be avoided. In fact, ‘real estate capitalism’ has been the first form of new economic activity, while in manufacturing hundreds of thou-sands of jobs have been lost.”

Fig. 4. Change in density (1995–2005) by county type for both east and west Germany. Source: INKAR CD (BBR, 2007): Types of Settlement Structure of Regions and Districts: Instruments for Inter- and Intra-regional Comparison, 2007.

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In terms of the amount of housing consumed, like much of the rest of Eastern Europe (Stanilov, 2007) average residential dwelling size increased in eastern Germany. In 2005, the amount of living space per person was 37.7 m2 (still lower than the West with 41 m2 per person), an increase of 5.3% since 1995 (a 3.1% increase in the West occurred during the same period) (BBR, 2007). In both eastern and western Germany, the greatest increases in living space primarily took place in more peripheral areas.

As consumption of housing tends to be income elastic, rising household incomes affect demand for housing and space. Increases in income were accelerated by specific policies geared toward the East, including a policy of wage equalization (Weissner, 1999) that led to a doubling of average income in eastern Germany between 1990 and 1994 (Nuissl and Rink, 2003). Although still below that of the West (2005 per capita income was €1202 in the East and €1545 in the West), incomes rose by approximately equal rates of 21% between 1995 and 2005 (BBR, 2007). As with increases in living space, income upgrading has been unevenly distributed, with the highest percentage increases occurring outside of central cities.

The demand for housing was accompanied by increasing car ownership rates, which rose dramatically in eastern Germany and resulted in a major increase in the number of automobile trips. The shift in the modal split has made metropolitan peripheries more acces-sible to households as well as firms seeking cheaper land and less regulation (Pucher and Buehler, 2005). In 1995, there were 427 vehicles per 1000 population in eastern Germany. This increased to 504 vehicles per 1000 by 2005. However, car ownership rates (as of

Fig. 5. 2004 urban density (persons per km2 urbanized area) by county types for eastern and western Germany. Source: BBR (2007).

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2005) are still are higher in the West: 562 cars per 1000 (BBR, 2007). Interestingly, the percentage change in the number of cars has declined in central cities in the East (see Fig. 6), and could be a reflection of the overall intrametropolitan population deconcentration.

Government Policies

A second explanation for urbanization without growth is that a number of policies adopted after reunification have subsidized greenfield development at the metropolitan fringe, as opposed to redevelopment and investment in the urban core. This includes the process of property restitution (as opposed to compensation) for former owners who had property confiscated under the communist regime. Property restitution is a cumbersome process, made more complicated by multiple ownership claims (Reimann, 1997; Tosics, 2005), understaffing, and a complex history involving seizure of property by the Nazis. The post-reunification policy of restoring property to the original owners had the effect of driving investment to outlying greenfield sites rather than to the inner city and the CBD. Tosics (2005) notes that restitution has in part led to greatly differentiated land prices between the CBD and the periphery of many CEE cities. Figure 7 displays both the aver-age land value (measure in € per m2) for land identified as developable (data collected 2003–2005) and the change in land value between 1995–1996 and 2004–2005. These data indicate that although still higher in central cities than in the metropolitan fringe, land values have declined in central cities.

Fig. 6. Change in the number of passenger vehicles per 1000 population (1995–2005) by county type for eastern Germany. Source: BBR (2007).

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However, unlike other CEE countries, planners and city officials in eastern Germany were able to utilize the Investtionsvorranggesetz (Investment Priority Act), which allowed them to award land to investors and merely compensate the owners, as opposed to restor-ing the actual property to them. This has enabled city officials to have a bit more discre-tion over investment in central cities; the redevelopment of central Berlin has especially benefited from this policy (Andrews, 2005). Nuissl and Rink (2003) note that the bene-factors of this Act have generally been corporations investing in greenfield sites. Second, generous federal housing and tax deduction policies (available through 1998) were intro-duced to meet a perceived housing shortage (Tosics, 2005). In particular, the Sonder-AfA allowed for a depreciation provision of 50% of the sum invested in new construction. This remained in effect until 1996, when it was reduced to 25% (Nuissl and Rink, 2003). Again, these policies have tended to favor private household consumption and greenfield develop-ment (Weissner, 1999; Nuissl and Rink, 2005). Tosics (2005) notes that this has led to an oversupply of housing stock.

Third, like other CEE countries, eastern Germany has also benefited from an influx of capital. This investment includes federal- and state-level transfers from the West as well as foreign direct investment (FDI). Fassman (1997) suggests capital investment in peripheral zones of Eastern European cities precedes population shift toward those areas. FDI in eastern Germany grew during the 1990s but has flattened out since 2000. However, as indi-cated earlier, FDI in eastern Germany is not nearly the force it is in other Eastern European countries. According to Gunther (2004), eastern Germany (not including Berlin) received FDI per capita of $690 in 2001, compared with $2,012 in the Czech Republic, $2,263 in

Fig. 7. Buildable land value (€ per m2) in 2003–2005 and change in land value between 1995/1996 and 2004/2005 in eastern Germany. Source: BBR (2007).

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Estonia, and $1517 in Hungary. Furthermore, the majority of that FDI in eastern Germany has centered on one Land; Saxony Anhalt.

Eastern Germany also differs from other CEE countries in terms of the amount of subsi-dies and other transfers it receives from the federal government. By subtracting federal tax revenue collected in the East from gross transfers, Alesina and Fuchs-Schundeln (2006) calculated a gross transfer of € 98 billion and a net transfer of €66 billion from West to East in 2002 alone. These financial transfers involve the following. First, payments from the German regional transfer system (Länderfinanzausgleich), which include both payments by the federal government to poorer states (Bundesergänzungszuweisungen) that have disproportionately benefited the East plus specific special investment subsidies targeted for the East (Investitionsförderungsgesetz Aufbau Ost). The second component consists of net transfers to individuals via the social security system, which was adopted in the East after reunification. The third component includes several investment subsidy pro-grams, financed and organized through the European Recovery Program, the state-owned Kreditanstalt für Wiederaufbau bank, or directly through the federal government. These programs apply to eastern as well as western German states, and include several programs that have disproportionately affected the East. They are primarily aimed at enhancing regional competitiveness by offering grants and loans to fund urban renewal initiatives; provide investment in infrastructure, tourism and small business projects; and support local governance initiatives, particularly in areas that have seen declining populations.5 Alesina and Fuchs-Schundeln (2006) calculated that this component totaled €7 billion for the eastern states in 2002.

The Absence of Planning

A third explanation for sprawl without growth in eastern Germany (and other post-socialist countries) is the lack of planning at the local, regional, and state level in the imme-diate aftermath of reunification (Nuissl and Rink, 2005; Pichler-Milanovic et al., 2007). Tosics (2005) notes that rapid development often left CEE cities scrambling to catch up in terms of implementing a regulatory framework for managing and guiding growth. For example, by the time Budapest had developed and passed a strategy to address new retail development, the first 500,000 square meters of retail space in Hungary had already been built. Furthermore, the declining role of the central government left many local govern-ments to compete with one another for investment (Pichler-Milanovic et al, 2007). Private investors and real estate speculators dominated the development process, often benefiting from federal subsidies and tax breaks (Weissner, 1999).

However, unlike other CEE countries that had to create the regulatory and institutional environment for urban planning to occur, eastern Germany directly imported western Germany’s planning practices and regulatory institutions, such as the Bundesraumord-nungsgesetz (Federal Regional Planning Law), which calls for each Land (state) to develop and implement a State Development Plan. However, as the result of provisional legisla-tion through 1997, the planning framework was simplified and less vigorously applied in

5These programs include the ERP regional program, ERP innovation program, KfW infrastructure program, GRW infrastructure, tourism, and business loans, KuM-Förderung, Städtebauförderung, Gemeinschaftsaufgabe Hochschulbau, and Wirtschaftliche Hilfen.

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the East. Consequently, Coles (1997) notes that state plans were hastily drafted, if at all. Developers often targeted smaller towns and cities for large-scale retail development in order to capitalize on, among other things, an agreeable local government.

The apparent lack of planning at the local and regional level has been attributed to several factors: (1) privileging economic growth and investment above attempts to control or guide development patterns; (2) a policy of replacing experienced bureaucrats with inexperienced new officials “untainted” by the former regime (Hausserman, 1996; Sinn, 2007); and (3) as a general reaction against central planning after the downfall of com-munism (Benfer, 1996). However, on this third point, Alesina and Fuchs-Schundeln (2006) used annual household panel data available through the German Socioeconomic Panel and found that eastern Germans, particularly older age groups, are generally more in favor of redistribution and state intervention than western Germans even after controlling for eco-nomic incentives such as direct subsidies.

Permissive planning practices and federal subsidies for greenfield development have led to an oversupply of housing and high vacancy rates in eastern Germany. Due to a reduction of public expenditure in the housing sector and changes in rental laws, many CEE coun-tries saw a precipitous decline in housing construction and a consequent housing shortage immediately after the collapse of the socialist regime (Sailer-Fliege, 1997). However, this was not the case in eastern Germany. Figure 8 indicates the number of finished units (per 1000 units) in both the East and the West (West used for comparison purposes). After peak-ing in the mid-1990s, the number of finished units dropped off in the East to levels below those of the West. This finding agrees with Nuissl and Rink (2005), who argue that the rate of suburbanization in the Leipzig region had slowed by the early 2000s.

Moreover, the trend in residential development in eastern Germany has been toward single ownership and larger housing units, in stark contrast to the previous emphasis on multifamily structures. In 1999, the percentage of new construction in eastern Germany consisting of single- and two-family houses was 93.4% (similar to the West), up by 854.7%

Fig. 8. Number of newly finished units per 1,000 units for both eastern and western Germany. Source: BBR (2007).

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from 1992 (BBR, 2002). Moreover, the trend was clearly toward larger units. In 1999, the percent of units with 5 rooms or more was 27.4%, up by 26.3% since 1990. The percentage of units constructed with only 1 or 2 rooms was 9.6%, down by 9.1% since 1990 (BBR, 2002).

Despite recent declines in the number of finished units, the geography of granting permits still varies considerably. Figure 9 shows the number of building permits in both 1999 and 2005 in eastern Germany. The greatest concentration of new permits occurred in the rural fringe of larger agglomeration areas, although rates of permitting have declined across all metropolitan regions since 1999. This finding is consistent with Müller and Siedentop (2004), who found that the urban fringe surrounding Berlin was the only area still urbanizing in eastern Germany.

Changing Demographic Trends

A fourth explanation of urbanization patterns involves changing demographics. As indi-cated earlier, population decline has been pervasive in eastern Germany and throughout CEE countries. Nevertheless, this overshadows a number of other demographic shifts that have taken place in recent years, both nationally and particularly in the East. Like other developed countries, Germany has witnessed an increase in single-person households. Nationwide, these households constituted 37.8% of the population in 2004, up from 35.4% in 1995. This trend has been strongest in the East, where such households constituted 40.2% of the population in 2004, up from 33.5% in 1995 (BBR, 2007). Growth in single-person household has been more modest in the West.

Fig. 9. Building permits issued per 1,000 population by county type for eastern Germany, 1999 and 2005. Source: BBR (2002, 2007).

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This has been accompanied by decreasing fertility rates, a trend that predates reunifica-tion and is widespread throughout Europe (Weichmann, 2008). In Germany, the fertility rate was 1.33 children per woman in 2007 (1.25 in the east [BBR, 2007]) and the overall birth rate (number of children per 1000 inhabitants) was 8.6 (Sinn, 2007). Nationally, the number of people per household dropped from 2.18 in 1999 to 2.14 in 2005, while in the East, the number of people per household dropped from 2.14 to 1.89 during the same period (BBR, 2002, 2007). One possible factor in explaining simultaneous subur-ban development and population decline is that decreasing household size has led to an increase in the total number of households and consequently a greater demand for housing (Stanilov, 2007).

Increasing mobility following reunification has also affected population loss in eastern Germany. Although all CEE countries faced increased out-migration, only eastern Germany faced two concurrent trends—migration from central cities to the urban periphery and overall out-migration from East to West—something that Herfert (1997) documented for several eastern German cities. The net migration from the East has been negative for some time. Figure 10 shows the total net migration (both domestic and international).

The disparity among the 18- to 25-year-old cohort is even more pronounced. In 2005, total net migration per 1000 for this group was -15.2 in the East (BBR, 2007). Examining the situation in eastern Germany more closely reveals that the flow of migration to the suburbs has decreased over time. Figure 11 displays the trends for agglomeration areas (trends for second-tier cities are similar). They indicate a net out-migration from central cities during the late 1990s and simultaneous in-migration to the suburban ring and the rural fringe. However, these trends appear to converge in the early 2000s, with central cities receiving positive in-migration, and inner suburbs incurring net migration losses.

Fig. 10. Total net migration per 1,000 population for both eastern and western Germany, 1995–2005. Source: BBR (2007).

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DISCUSSION

It is tempting to assume that sprawl was an inevitable result of the post-communist transition, and indeed there is much evidence for this. Eastern Germany does have much in common with other CEE countries that underwent similar political changes, and subur-banization has taken on many of the characteristics of the West (for example, lower den-sity rates). Like other CEE countries, eastern Germany saw demographic shifts, changing incomes, and consumption patterns that reinforced suburbanization. However, as shown here, the unique fiscal, legal, and policy environment of eastern Germany after reunifi-cation distinguishes it from other CEE countries, most notably in its relationship with western Germany and the policies and institutional transfers embedded in that relation-ship. Future research using an equally detailed database for several CEE countries would be helpful in teasing out how urban spatial patterns varied between eastern Germany and some of its former socialist neighbors after the fall of the Iron Curtain.

As indicated, there is evidence that the post-socialist period is coming to an end, an assertion that has been supported elsewhere (Stanilov, 2007; Siedentop and Mueller, 2004; Nuissl and Rink, 2005; Mykhnenko and Turok, 2008), and the rate of suburban expansion is slowing, as demonstrated in this study by the decline in out-migration, number of units constructed, and the issuance of building permits. In part this is because sprawl without growth in eastern Germany was a product of specific circumstances following the fall of the Berlin Wall and its unique relationship with former West Germany. Some of the original causes are no longer present: incomes are no longer rising, many of the incentives and sub-sidies (e.g., the Sonder AFA) no longer exist, states and cities in the East have resurrected the the plan-making process, and migration rates are slowing down. However, even though some of the unique conditions present in post-reunification Germany have changed, many broader aspects have not changed at all. Eastern Germany still faces overall demographic decline. In fact, population projections for 2020 indicate decline everywhere, with the

Fig. 11. Total net migration per 1,000 population, Agglomeration areas in eastern Germany, 1995–2005. Source: BBR (2007).

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only exception being the exurban fringe of larger agglomeration areas (BBS, 2007). The projected growth in the adjacent rural fringe reflects current and future growth in the urban periphery of Berlin, which has not seen the same slowing of growth as in other regions.

The issue of decline will persist, especially concerning what to do with vacant and underutilized land and housing. This represents a major rethinking of the role of plan-ning institutions, methods, and approaches (Schmidt, 2009; Müller and Siedentop, 2004). Several cities have already taken innovative steps toward addressing this issue, in some cases actively planning for future decline (Beetz et al., 2008; Wiechmann, 2008). But German planning approaches are not very flexible and have proven to be rather resistant to change (Schmidt, 2009). Interestingly, as the post-socialist period draws to a close, cities and regions in both eastern and western Germany may increasingly face similar problems. Steinfuhrer and Hasse (2007, p. 184) argue that the loss of eastern “exception-alism” is embodied in the range of similar issues now facing both eastern and western cities: “increased land consumption, the proliferation of inner-city brown fields, social and regional polarization, or demographic and household changes. Although the Rhine–Ruhr region has faced population decline for some time, Müller and Siedentop (2004) found evidence for recent increasing, accelerating population decline in parts of the West that had previously been stable. Clearly, cities and regions of both eastern and western Germany are now increasingly affected by Europe-wide developments.

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