Post-socialist gentrifications: similar, but different

Bernt, Matthias; Ogrododwczyk, Agnieszka Article — Published Version Post-socialist gentrifications: similar, but different International Journal of Urban and Regional Research Provided in Cooperation with: John Wiley & Sons Suggested Citation: Bernt, Matthias; Ogrododwczyk, Agnieszka (2025) : Post-socialist gentrifications: similar, but different, International Journal of Urban and Regional Research, ISSN 1468-2427, John Wiley & Sons, Ltd, Chichester, UK, Vol. 49, Iss. 3, pp. 531-551, https://doi.org/10.1111/1468-2427.13321 This Version is available at: https://hdl.handle.net/10419/323884 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. http://creativecommons.org/licenses/by-nc/4.0/ INTERNATIONAL JOURNAL OF URBAN AND REGIONAL RESEARCH DOI:10.1111/1468-2427.13321 531 — POSTSOCIALIST GENTRIFICATIONS: Similar, but Different MatthiasBernt and agnieszkaOgrOdOdwczyk Abstract Contrary to the expectations many urban scholars had after the end of socialism, it has taken almost thirty years for gentrification to become a significant urban development trend in Central and Eastern Europe. The reason for this delay is that there are massive ‘commodification gaps’ — institutional barriers to the valorization of land and housing — which could only be overcome with great difficulties. In this article, which is based on an empirical study of gentrification in two secondtier cities in East Germany and Poland, we pick up on this issue and focus on policies that have affected the likelihood of gentrification. We compare two different trajectories of postsocialist gentrification, finding that the course of gentrification has been deeply embedded into the dissimilar politicaleconomic framework of transition in East Germany and Poland. This has led to considerable differences in the timing and geography of upgrading and displacement. We distance ourselves from ‘diffusionist’ views, which portray gentrification as a generalizable trend in which postsocialist cities are ‘latecomers’, based on a model that has been pioneered in Western cities and emphasizes the specificity of gentrifications as well as their embeddedness in national, regional and local political environments. Introduction Gentrification, initially reported in the 1960s in London (Glass,1964), has undergone significant geographical expansion over subsequent decades. Concurrently it has diversified, leading to the emergence of various forms of gentrification.1 The postsocialist world, specifically countries behind the former ‘Iron Curtain’, as viewed from the West, holds a unique position in this context. The Central and Eastern European (CEE) countries, often associated with this region, have been ‘latecomers’ in terms of gentrification. Although signs of urban upgrading and displacement have been evident since the early 1990s and considerable research has documented this change (see, e.g. Hegedüs and Tosics,1991; Sýkora,1993; Tosics,1994; Ruoppila and Kährik,2003; Standl and Krupickaite,2004; Badyina and Golubchikov,2005; Bernt and Holm,2005; Sýkora,2005; Brade et al.,2009; Kovács,2009; Cook,2010; Kovács et al.,2013; Axenov,2014; Haase and Rink,2015; Holm et al.,2015, Kovács et al.,2015; Górczyńska,2017a; 2017b), the overall extent of gentrification has been relatively limited. It is only recently that urban renewal has intensified significantly in many inner cities. Most research on gentrification in this context has been based on individual studies conducted in diverse settings and at various times. There have been very few collections of articles (see, e.g. Bernt et al.,2015). The only study offering a more systematic examination is a literature review by Kubeš and Kovács(2020), which consolidates findings from previous studies on the preconditions, actors and types of gentrification identified in the CEE region. The authors identify 16 prerequisites for the growth of gentrification, 11 types of gentrification and numerous actors 1 We follow the argument made by Lees et al. (2016) and refer to a plurality of gentrifications rather than a homogeneous process emphasizing heterogeneity. © 2025 the authOr(s). InternatIonal Journal of urban and regIonal research puBlished By JOhn wiley & sOns ltd On Behalf Of urBan research puBlicatiOns liMited. This is an open access article under the terms of the Creative Commons Attribution-NonCommercial License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited and is not used for commercial purposes. Open Access funding enabled and organized by Projekt DEAL. BERNT AND OGRODODWCZYK 532 across different case studies.2 In essence, while gentrification in postsocialist countries shares some similarities, it also exhibits significant variation. Kubeš and Kovács (ibid.: 2604) describe this phenomenon as a ‘kaleidoscope’, highlighting the need for more empirical analyses with a comparative perspective. However, intrapostsocialist comparisons have thus far remained fairly limited. Articles on postsocialist gentrification often include implicit comparisons, such as when describing the slow pace or spatial patterns of gentrification in a specific location to analyse different temporal dynamics or discussing the impact of foreign investors. Typically, these comparisons are directed towards an imagined ‘Western’ norm. Rarely are comparisons made between different postsocialist gentrification processes (exceptions include Holm et al.,2015; Bernt,2016; 2022), and when such comparisons are made, the focus is often on emphasizing differences. In light of this state of research, the call for more comparative studies by Kubeš and Kovács(2020) is both timely and necessary. However, how can meaningful comparisons be achieved? How can we find a way of comparing that goes beyond merely listing similarities and differences to make sense of the multiplicity of urban realities documented in empirical studies? The issue is not so much a lack of empirical knowledge — numerous studies have already been conducted (as noted above) — but rather the absence of an adequate conceptual framework for making comparisons. In this respect, research on ‘postsocialist’ gentrifications has predominantly followed one of two paths. It either analyses gentrification as a replication of Western models with specific nuances (see, e.g. Standl and Krupickaite,2004; Bernt and Holm,2005; Sýkora,2005; Kovács et al.,2013), which calls for more attention to ‘context’, or it emphasizes developments dissimilar to Western gentrification frameworks (Gentile,2018; Olt et al.,2024) to reject the gentrification lens entirely.3 The first approach risks replicating seemingly universally valid categorizations, thereby neglecting the specificities of postsocialist gentrification. The second approach tends towards ‘thick’ descriptions of singular cases, whose validity may be questionable beyond the specific context analysed. Against this background, in this article we provide a comparative study of gentrification in two innercity neighbourhoods in East Germany and Poland. The aim is to advance research on postsocialist gentrification beyond mere comparison to Western models. In doing so, we hope to contribute to a better understanding of the similarities among postsocialist gentrifications and to grasp the differences between them. We address two research gaps. First, we analyse the differences between two postsocialist gentrifications using a common framework that centres on the institutional environment for reinvestment, displacement and gentrification. Methodologically, we aim at a variationfinding comparison within a set of cases commonly labelled ‘postsocialist’, deductively using a particular conceptual framework. This enables us to better identify the causes behind observed differences and to analyse how gentrification is embedded in different postsocialist trajectories (see Bernt and Volkmann,2024). Secondly, we place particular emphasis on the different roles of the state. Rather than conducting a catchall comparison that tries to include a large variety of empirical phenomena in an inductive way, we focus on analysing how gentrification is embedded in different institutional environments. We argue that this approach facilitates connecting the empirical findings to a specific set of theories — in our case, supplyside explanations (Smith,1979) and their institutionalist modifications (Bernt,2022) — and being more specific about the observed differences. 2 While we acknowledge the merits of this literature review, it is evident that it allows for limited comparison. This limitation arises partly because different strands of Western gentrification literature have been adapted in the studies reviewed and partly because of the differences in the timeframes analysed and the methodologies used. 3 The debate thus widely follows the schism between postcolonial and Marxist traditions in urban studies (see also Bernt,2016; 2022). An increasing number of scholars reject gentrification as an overstretched ‘Northern’ concept (Ghertner,2015; Smart and Smart,2017; Tang,2017; Schmid et al.,2018), while others argue for sustaining the concept but applying it more flexibly (Lees et al., 2015; 2016; Shin and LópezMorales, 2018; Gerlofs and LópezMorales,2023). 533POSTSOCIALIST GENTRIFICATIONS Theoretical orientation Our framework includes two fundamental conceptual demarcations: first, we observe gentrification as a process of reinvestment into the built environment. In this view, gentrification occurs when ‘rent gaps’ (gaps between the potential ground rent and the capitalized ground rent) are closed. Rent gaps and reinvestment form the economic basis for providing a decisionmaking environment in which the agents of gentrification (homeowners, landlords, gentrifiers) operate. However, the operation of rent gaps is not automatic; social, cultural and economic contexts can alter, modify, foster or prevent how reinvestment proceeds. Rent gaps are thus a sine qua non for gentrification, but they do not automatically lead to its realization. Even when rent gaps are closed, the ways in which gentrification operates can vary significantly. Secondly, we assert that institutions play a pivotal role in the process of gentrification, particularly within the state–market nexus. We address this by employing the concept of ‘commodification gaps’, as developed by Bernt(2022) in a comparative study. The commodification gap is defined as ‘the disparity between the potential ground rent level which can be achieved for a piece of land when it is fully commodified and the actual ground rent capitalized when it is decommodified, partly decommodified or noncommodified’ (ibid.: 52). In this view, ‘It is only when this gap is closed that investment into housing becomes a viable option and gentrification is set into work’ (ibid.). Put differently, gentrification needs to be enabled by public policies, and the way this is done is by abolishing, lifting or bypassing instances of deor noncommodification (i.e. noncommodified land, social housing, rent regulations), which prevent the exploitation of land at the level of its ‘highest and best use’.4 While the concept of commodification gaps has potentially farreaching implications for the study of gentrification, it has only been applied in one study on gentrification in London, Berlin and St. Petersburg (Bernt,2022). In this study, Bernt identified 12 distinct commodification gaps that have influenced the course of gentrification in the three neighbourhoods examined. This relatively large number of specific commodification gaps could be problematic, as including more cases might result in a proliferation of commodification gaps, leading to an endless number of placespecific gaps (see Wyly,2024). To circumvent this issue, Bernt suggests that the commodification gap should not be understood as a catalogue of actually existing and observable objects but rather as a perspective that enables an analysis of the economic determinations of gentrification alongside its political, contextspecific conditions (Bernt,2024). We find the concept of commodification gaps particularly well suited for the comparison of postsocialist gentrifications. This is because land under socialism was largely not a commodity. The commodification of land and the establishment of private property were essential conditions for gentrification, which would have been impossible without these changes. The transition from socialism to capitalism can thus be understood as a universal move towards closing the significant commodification gaps resulting from socialist decommodification and noncommodification. However, the actual transformation was highly uneven and characterized by considerable economic and political diversity (Bohle and Greskovits,2007; Myant and Drahokoupil,2011; Leszczyński,2015; Bohle,2018). This diversity is particularly evident in the housing sector, where privatization, restitution, rent regulations, mortgage systems and other factors were implemented very differently across postsocialist countries. In other words, while the ‘commodification’ of noncommodified land is the common denominator of postsocialist reforms, making different postsocialist countries ‘similar’, the manner in which it was achieved varied greatly. This resulted in a multiplicity of commodification gaps and diverse strategies for closing them. 4 It should be emphasized that rent gaps and commodification gaps do not stand against each other as theoretical tools. Rather, they are ‘conjoined twins’ (Bernt,2022: 216). BERNT AND OGRODODWCZYK 534 Materials and methods The empirical basis for our argument is a comparative study of gentrification and its institutional underpinnings in two postsocialist cities: Halle in East Germany and Łódź in Poland. These cities were selected for the following reasons. First, while previous research has concentrated on capital cities in the CEE region, Halle and Łódź are more ‘ordinary cities’ (Robinson,2006), with less intensive market pressure and, in some cases, a prolonged population decline. Secondly, both cities are subject to gentrification pressures in their more attractive areas. Statistical data for Halle (see Helbig and Jähnen,2018; Bernt and Hausmann,2019; Bernt and Volkmann,2023) reveal a clear trend of sociospatial polarization, with peripheral housing estates facing increasing concentrations of poverty, while more prestigious neighbourhoods north of the city centre experience social ascension. In contrast, the inner city of Łódź had long been neglected but has experienced an upward shift in socioeconomic status since the second decade of the twentyfirst century, owing to intensified revitalization efforts by the municipality (Ogrodowczyk,2024). The intensity and speed of gentrification thus differ significantly between the two cities. Thirdly, East Germany and Poland represent two different trajectories of postsocialist transition. East Germany underwent a rapid transition (at ‘wormhole speed’, see Bernt,2016), while Poland followed a slower path. Additional differences are discussed later in this article. Finally, both authors have considerable research experience in these cities, enabling them to mobilize their background knowledge effectively. Moreover, they possess the necessary language skills to analyse local documents, further enhancing the depth and accuracy of their comparative analysis. In this research, we applied the following methodologies. First, based on a review of Polish and German literature, document analysis and expert interviews, we reconstructed major institutional changes in the housing sector following the collapse of socialism and analysed their relationship to gentrification in East Germany and Poland. We used the concept of commodification gaps to understand how these changes formed or erased barriers to the valorization of land and properties. Secondly, we selected one particular area in each city (the Paulusviertel in Halle and the centralnorthern part of the special revitalization zone, or SRZ, in Łódź) for an indepth study of changes. In these areas, we conducted 24 interviews with residents from different age groups (11 in the Paulusviertel and 13 in the SRZ in Łódź) to gain a more comprehensive understanding. These interviews focused on housing conditions, housing choices and life trajectories and were conducted in the form of guided, semistructured interviews. Our group of respondents were selected according to the specific needs of each case study and expanded using ‘snowballing’ techniques.5 Additionally, we conducted three expert interviews in each city. The expert interviews were informed by thorough document analysis (including policy documents, funding programmes and planning reports) and provided valuable insights into the strategies, logics and restrictions of state actors regarding urban regeneration. The experts we interviewed were predominantly decision makers from different administrations with privileged access to information relevant to the study, such as the Revitalization Bureau, the City Architect’s Bureau, the Department of Strategy and Development, the Planning Department and local housing companies. Overall, the study utilized a combination of research techniques to gather a broad range of data from diverse sources and actively employed methodological 5 In Łódź, a total of 13 indepth interviews with residents were conducted. The respondents ranged in age from 30 to 77 years and reported varying levels of education: 61% had a secondary education, 31% had a higher education and 8% had a primary education. They were either employed (53%) or retirees (47%). Of the respondents, 31% lived in their own apartments, 31% in municipal housing and 38% rented in the private sector. In Halle, we conducted 11 interviews with residents. Among the interviewees, six were young adults (18–25 years old, mostly students) or middleaged adults (24–65 years old), while five were seniors (over 65 years old) with extensive housing experience in the neighbourhood. All respondents lived in private rentals. 535POSTSOCIALIST GENTRIFICATIONS triangulation. Document analysis and expert interviews, coupled with an intensive focus on neighbourhoodlevel studies, enabled us to achieve a more nuanced and contextsensitive understanding in our research to provide richer explanations. In the section that follows, we begin by discussing the institutional frameworks of gentrification in East Germany and Poland, with particular attention to the emergence of commodification gaps and the mechanisms through which these gaps were opened and closed. Next, we examine the actual cases, demonstrating how the operation of ‘commodification gaps’ influenced the spatial and temporal patterns of gentrification in the Paulusviertel in Halle and the SRZ in Łódź. Based on this analysis, we highlight their similarities and differences and conclude by advocating for a central focus on the processes through which commodification is achieved in the study of postsocialist gentrifications. Gentrification in East Germany In East Germany, the transition from socialism to capitalism happened overnight. On 3 October 1990, the German Democratic Republic (GDR) joined the Federal Republic of Germany, and by this very act, the whole legal and institutional framework established in the latter was set into power on the territory of the formerly socialist part of the country. The major consequence of this constellation was that the institutional environment for housing production, distribution and consumption was completely imported from West Germany and rolled out overnight. It was only when the situation made adaptations inevitable that exceptional rules were enacted. Usually, these were set in place in such a manner that they would pave the way towards the ‘normal’ state of affairs known from West Germany. — Institutional conditions for gentrification in East Germany Before we describe the actual transitions implemented, it is therefore necessary to direct attention to this ‘normality’. The dominant feature of the German housing system (which sets it in stark contrast to most of its CEE counterparts) is, in a nutshell, its character as a highly regulated ‘unitary rental market’ (see Kemeny,1995). In 2018, 57.9% of all German households lived in rental units. In cities, the share of households that are renting is usually higher so that, for example, 82.6% of all households in Berlin are tenants (see Statistik BerlinBrandenburg,2018: 5). The ability of tenants to resist rent increases and remain in their homes is largely determined by a system of rent regulations that originated in the period following the first world war. However, these regulations work differently for existing contracts and new tenants. In sum, they enable three different commodification gaps, the closure of which enables an increase in rental yields (for more detail, see Bernt,2022: 77–97): • New tenancy gap: Whereas rent increases to sitting tenants are limited to a rate of 20% within three years, new tenancies are usually agreed upon on the basis of free market rents. Thus, whenever demand exceeds supply in the housing market, new tenancies are preferable from the point of view of the landlord. • Modernization gap: In contrast to slow opportunities for price increases in sitting tenancies, modernization activities can lead to rapid price escalations. As modernization activities are usually costly, the opportunity to deduct 9% (11% until 2019) of the cost of the rent enables rent increases that go far beyond the opportunities provided even by new tenancies. • Tenure gap: Comparable opportunities are provided by the conversion of rental homes into privately owned homes. Once a unit is converted, owners of individual flats can claim personal use — thus justifying a termination of the rental agreement by the owner. The conversion of rental homes into privately owned homes therefore BERNT AND OGRODODWCZYK 536 undermines the otherwise highly protected security of tenure and enables vacating apartments and achieving new tenancies at higher rates. In sum, the German rental system includes comparably strong protections for tenants — but also allows bypasses through which rent increases are made possible. For the course of gentrification, it is important to understand how this system was set in motion in East Germany. Two issues are crucial here. — the restitutiOn Of prOperties In the GDR the lion’s share of the housing stock was managed by state administrations. At reunification, most private property owners were absent in inner cities, their properties had been expropriated or they were not interested in claiming their ownership. Clearly defined property rights were only introduced in the course of the 1990s for the majority of the historical housing stock, and the way this was done was through restitution of properties to the original owners or their heirs. In historical innercity neighbourhoods, 70% to 90% of housing stock was subject to restitution (Dieser,1996; Reimann,1997; Holm,2006). The scope of the restitution has been defined by the Law on Property Restitution, which stipulates that those properties expropriated between 30 January 1933 and 8 May 1945 (mostly Jewishowned properties) as well as those expropriated since 7 October 1949 (in the GDR) should be given back to the original owners or their legal successors. When the restitution of a property happened, the result was usually a quick sale. As a rule of thumb, the original owners (or their heirs) had little interest or experience in the housing business, but ‘overnight’ came into possession of properties that were long believed to be lost. Often, the restituents were communities of heirs, so a fair distribution of obligations and benefits was a problem. In addition, under socialism, mortgages were taken up for financing maintenance without the consent of the owner (who was absent anyway), so many restituted buildings were highly indebted. Under these conditions, the easiest way to get out of this situation was a swift sale. There is no comprehensive study about the share and prices of resales across East Germany, but a number of studies done in East Berlin paint a vivid picture. Dieser(1996) found that only about 5% to 8% of original owners were interested in keeping their property in the long term in the innercity neighbourhood Spandauer Vorstadt. In Prenzlauer Berg, another East Berlin innercity neighbourhood, studies by Reimann(1997; 2000) have shown similar results. The buyers were rarely private individuals, but professional realestate companies, realestate funds and developers. This was problematic, as prices for real estate were booming in East Germany in the 1990s. The reason for this was both a scarcity of renovated homes in good locations (caused by socialist housing policies and the long time it took for matters of restitution to be settled) and — mostly unrealistic — growth expectations for the majority of cities. Given the high costs of renovation, inflated house prices and interest rates of around 7%, this led to immense pressure on rents. The effect of restitution regarding the likelihood of gentrification was thus twofold (see also Häußermann,1995; Harth et al.,1998; Friedrich,2000; Wiest and Hill,2004; Bernt and Holm,2005; Glatter and Wiest,2007). First, restitution resulted in a modernization and commercialization of ownership structures in most innercity neighbourhoods, which involved professional realestate companies who were interested in shortterm profits and had the experience and means to achieve them. Secondly, because the majority of properties were sold immediately after restitution, owners were burdened with comparatively high expenses for the acquisition of their properties, which came on top of the already high costs for renovation. This led to exorbitant expenses, and properties could only be made profitable if high revenues could be achieved, either in the form of rent increases or resales. 537POSTSOCIALIST GENTRIFICATIONS — the intrOductiOn Of the (West) GerMan rent regulatiOn systeM and tax suBsidies fOr renOvatiOns Increasing yields from renting were, however, also restricted to some degree for a while. The introduction of (West) German rent regulations took place in several stages, culminating in the final introduction of the comparative rent system in the territory of the former GDR on 1 January 1998. The transition phase during which rent increases followed special regulations only ended then. In other words, the first half of the 1990s can be regarded as an ‘inbetween’ space in which the institutional frameworks allowing reinvestment into existing building stock followed by rent increases had not yet started to properly operate. Notwithstanding these difficulties, more than two thirds of the historical building stock in innercity neighbourhoods were refurbished in the decade following reunification. The major reason for this seemingly paradoxical result is to be found in the special depreciation possibilities guaranteed in the Fördergebietsgesetz (Federal Development Zone Act). Until 1996, this law allowed for up to 50% of refurbishment costs in the first year of investment to be offset against tax; this proportion was reduced to 40% until 1998/99. These high indirect subsidies made the refurbishing of old housing stock extremely lucrative for investors with a large taxable income, especially if costs were high and rents low, since the ‘costs’ of investment could be transformed into tax savings for the investing partners involved. As the balance sheet of the investment could be evened out by tax advantages, investors could afford to forgo high rental income for a while and build in areas without apparent affluent demand. — Producing the conditions for a gentrification yet to come In summary, the transition from socialism to capitalism led to a contradictory picture in East Germany: • The restitution of properties led to the commodification of land, which was previously not treated as a commodity. This created the conditions for gentrification. In the short run, however, it created barriers to investment. • Mass sales and high pressure on rents created enormous potential ground rents. At the same time, existing land regulations made it very difficult to increase actual ground rents to this level with sitting tenants. • Closing this rent gap was therefore only possible on the basis of ‘modernization’ and new tenancies, which could only be achieved through costly renovations. The opportunities for tax deductions introduced in the 1990s lowered the costs of this operation, thus enabling quick and intensive renovations and closing ‘modernization gaps’ at a high level. • Since ‘modernization’ often went hand in hand not only with massive rent increases but also with changes in floor plans and intensive construction work, it usually resulted in a high level of economic and physical displacement of existing tenants. This opened up opportunities for new tenancies at a higher rent level. Gentrification in the Paulusviertel in Halle (Saale) The Paulusviertel (Paulus neighbourhood) is a neighbourhood north of the city centre of Halle (Saale) built at the end of the nineteenth century in Wilhelminian architectural style. Far from being unique, it is a paradigmatic example of the operation of gentrification in East Germany. While the area experienced serious neglect under socialism, it is today regarded as one of the most attractive housing areas of the city (Kowalski,2006; Stadt Halle,2018) and characterized by higher incomes, (comparatively) low unemployment and high educational levels. The average rent for flats in the Paulusviertel neighbourhood is among the highest in Halle. BERNT AND OGRODODWCZYK 538 When socialism collapsed in 1989/90, the neighbourhood was marked by dramatic maintenance neglect, high vacancies and a dearth of modern facilities such as central heating or sanitation. Like everywhere in the GDR, most properties were subject to restitution and were consequently sold quickly to commercial property owners, mostly from West Germany. The following figures give a rough picture of changes in property structures: in 1990, about 60% of residential buildings in the area were owned by the public sector or cooperatives, about 12% were in state administration and only 28% were privately owned (Stadt Halle,1995: 22). The proportion of private owners increased continuously in the following years as restitution progressed. In 1995, about 55% of housing units were already privately owned (ibid.: 23). In 2020, the share of privately owned buildings increased to 83% of the stock (Stadt Halle,2020: 33). Thus, while in 1990 only about a quarter of the housing stock was privately owned and three quarters in cooperative, municipal or state administration, in 2020 more than four fifths of housing units were privately owned and less than one fifth in cooperative or municipal ownership. Within 30 years, therefore, the ownership structure had been completely reversed, and public property was relegated to a marginal position. Restitution and resales set in motion a massive wave of renovations, so that the majority of buildings were refurbished within three to four years in the second half of the 1990s. A study conducted by geographers from Halle (Friedrich,2000) reported that in three blocks mapped in the Paulusviertel, the rate of completed building renovations almost tripled from 24% to 71% within four years between 1996 and 2000. As a rule of thumb, renovation measures were so comprehensive that it was not possible for residents to remain in their apartments. The refurbishment thus became the trigger for the physical displacement of the majority of the sitting residents. Since refurbishment usually went hand in hand with massive rent increases, it also intensified the economic displacement of lowincome households. The following quotes from interviews with residents give a picture of these changes: A lot of people have moved out. Because of the renovations. If such a general renovation is done, all the pipes must be renewed, the floor plan is new — so hardly anyone can stay (interview 036).6 With the announcement ‘There is gonna be a renovation and so the rent will then increase’ we made our decision and gave notice to the landlord and moved out (interview 022). He [the landlord] said, ‘I’ll give you 10,000 marks if you move out’ … 10,000 West German marks, in one fell swoop. And … for the most part, all tenants took the 10,000 and moved out. Without comment, they accepted the offer from the investor from Munich and packed their things (interview 031). In conversations it was often said that she is a great landlady. She knows what it’s like to live as a student … and she doesn’t intend to increase the rent, and she doesn’t intend to take possession … And a month later … suddenly: ‘claim of personal use’ (interview 005). While it is impossible to document the whole spectrum of personal changes the residents of the Paulusviertel experienced after reunification, these extracts from our interviews clearly reveal that renovation went hand in hand with the displacement of large parts of the original population. This displacement operated through the closure of all three ‘commodification gaps’ discussed above. Renovation costs were deducted so that the rent level increased, original tenants were displaced by new tenants who would pay 6 All extracts have been translated from German or Polish by the authors. 545POSTSOCIALIST GENTRIFICATIONS significant decrease in the number of dwellings owned by the municipality caused a reduction in the number of (mainly lowincome) households that could live in the SRZ. Unexpectedly for the local authorities, 75% of the tenants expressed no desire to return to their former apartments. The main reason for this was the increase in rents in the FIGURE 2 Włókiennicza Street in the special revitalization zone (SRZ) in Łódź (priority area no. 1) (photo by Agnieszka Ogrodwczyk, May 2022) TABLE 1 Social and spatial changes in priority areas for revitalization (2016–2023) Number of area Priority areas designated for revitalization 1 2 3 4 5 6 7 8 Total BEFORE REVITALIZATION Municipal dwellings 472 116 43 278 23 61 633 275 1901 Residents 1957 3038 1500 3750 1759 993 3096 1144 17237 AFTER REVITALIZATION Municipal dwellings 458 19 24 165 18 29 116 66 895 Supportive housing units 3 3 3 3 2 3 - 1 18 Nonresidential commercial units 71 10 11 18 20 4 12 - 146 Nonresidential noncommercial units 19 - 24 9 10 12 14 2 90 Households displaced to replacement dwellings 405 47 20 150 20 55 489 217 1403 Households displaced to social housing 67 69 23 128 3 6 144 58 498 sOurce: Authors’ tabulation. BERNT AND OGRODODWCZYK 546 renovated municipal tenements. Municipal regeneration was usually accompanied by rent increases of up to 60%. These increases can be regarded as the main cause of economic displacement, as they priced out lowincome households. In line with this, a study found that tenants who did return to their apartments usually had a higher level of education and higher incomes than those who did not (Daab et al.,2019). The allocation of municipal premises in renovated flats has been specified in The Settlement Model for Renovated Tenements in the Innercity Revitalization Zone in Łódź (Daab et al.,2019). It specified achieving a ‘social mix’ through different types of apartments in renovated buildings as a goal of regeneration and introduced different categories for the apartments offered after renovation. These included social housing but also jobrelated apartments and premises intended for adaptation (mainly attics in tenements that could be adapted for residential purposes or as art studios). These constitute separate categories of premises, so tenants were selected on the basis of different criteria. For gentrification in the inner city, the most important factor was the introduction of jobrelated apartments. People whom the Mayor of Łódź identified according to their qualifications and the tasks they carried out for the local community were able to apply for such apartments. These apartments are also intended for graduates (up to 30 years old) and students graduating from higher education institutions in Łódź (on recommendation of the rector), provided that they stay on to work in Łódź. Discussion Our comparison of gentrification in Halle (Saale) and Łódź reveals several key similarities and differences. As is the case in most other innercity neighbourhoods, both the Paulusviertel in Halle and the inner city of Łódź experienced severe neglect under socialism. When the transition from a planned economy to a market system began, massive rent gaps emerged in both areas. Yet, after 30 years, these rent gaps have been closed in the Paulusviertel, whereas they have remained wide open in large parts of Łódź, where they have only been closed in a spatially fragmented way and required significant municipal interventions. In our case studies, we identified several factors contributing to this difference. The most important ones are highlighted in Table2. TABLE 2 Institutional conditions for gentrification compared Paulusviertel Inner city of Łódź Property rights Fast restitution and resales Almost complete privatization Privatization to sitting tenants High share of ‘remaining’ properties staying under municipal control Fragmentary and ongoing restitution Availability of financial resources for renovation Easy access to mortgages since 1990 Support through generous tax subsidies until 1998 Limited access to mortgages until 2004 Availability of EU funding after 2004 Dominant tenure Private rental Mix of private rentals (with high share of informal arrangements), public rentals and owner occupation Rent regulations Tight rent regulations Incentives for abolishing existing contracts for ‘modernization’ Rent increases hardly possible until 2005 Evictions very difficult to achieve, with the exception of revitalization in SRZ Incentives for abolishing existing contracts and for ‘modernization’ Role of the local state Negligible Stateled gentrification through revitalization programmes Spatial and temporal dynamics Fast and comprehensive gentrification Gentrification slowed down and dispersed, but accelerated after 2015 in SRZ sOurce: Authors’ tabulation. 547POSTSOCIALIST GENTRIFICATIONS In summary, the transformation of property rights, the construction of mortgage markets, the availability of financial support and regulation of tenure have taken very different routes in the former GDR and Poland, resulting in distinct temporal and spatial patterns of gentrification. The conditions for achieving fast and comprehensive gentrification are much more complicated in Poland than in former East Germany, where transformation of property structures, introduction of rent regulations and construction of housing markets were rapidly implemented and completed by the mid1990s. By contrast, this process is still ongoing in Poland. The frameworks implemented in Poland have led to significant coordination problems. Rent increases and evictions remain difficult to achieve, and state financial support is relatively unfavourable. While the past three decades have seen instances of sporadic and spatially scattered gentrification in stock sold to former tenants, it was only in 2015 that an institutional framework was introduced in Poland that allowed for bypassing obstacles to upgrading stock in a more spatially concentrated and coordinated manner. The framework of the Revitalization Act of 2015 has made municipalities the main drivers of gentrification in Poland, fostering a predominance of ‘stateled gentrification’ (Ogrodowczyk,2024). This stands in stark contrast to East Germany, where gentrification proceeded much faster and involved a less active role from the state. In East Germany, the state’s role was largely limited to enacting restitution and providing financial support through tax incentives. Our analysis offers a clear understanding of the institutional underpinnings driving gentrification dynamics, with property rights emerging as a crucial factor. The massive commodification gaps observed in Poland result from failure to transition from ‘socialist’ property structures in a way that fosters an environment that is conducive to investment and facilitates gentrification without substantial state intervention and support. As a result, gentrification in Poland has progressed much more slowly, with the state playing a central role in the process. In contrast, in East Germany, the state played a central role in enabling rapid property transfers to commercial landlords. This approach has effectively catalyzed gentrification dynamics and demonstrated how state policies and property rights transformations can significantly influence the pace and nature of urban redevelopment. While this might be interpreted as yet another instance of stateled gentrification, our analysis reveals the more nuanced and contradictory role of the state. In both cases, the state’s involvement was shaped by decision making at higher levels, resulting in distinct drivers of and obstacles to gentrification. In East Germany, rapid restitution and the mixture of privatization to sitting tenants and piecemeal restitution were outcomes of upperlevel state decisions. Local administrations in East Germany were largely constrained by national transition trajectories, relegating them to a passive or reactive role.10 Conversely, Poland’s complex and challenging conditions necessitated substantial state intervention. As a result, municipalities were pushed into a more active role as developers, which reflected a different set of state dynamics. This illustrates that the state’s role in gentrification is not monolithic but varies depending on the specific historical and institutional contexts of each country. Conclusion This study highlights that the transition from socialism to capitalism — including the ‘unfreezing’ of properties and the introduction of realestate, mortgage and housing markets — has been a key similarity in the cases of Halle and Łódź. Without this ‘transformation’, gentrification would have been nearly impossible. However, 10 Berlin presents an exception to this pattern. In Berlin, boroughs attempted to intervene in the gentrification process early on. However, their efforts were constrained by limited legislative powers, which resulted in only partial success in mitigating the impacts of gentrification (see Bernt and Holm,2005; Bernt,2016; 2022). BERNT AND OGRODODWCZYK 548 despite this common starting point, significant differences emerged owing to the varied trajectories of postsocialist transition in each location. In this regard, Halle and Łódź are ‘similar, but different’, a distinction that sets them apart from other global cases such as London, Oakland or Seoul. Our core argument is that the specific course of postsocialist transition profoundly influences the trajectory and patterns of gentrification. Thereby, the individual trajectories of transition in Halle and Łódź have resulted in severely different gentrification processes. Labelling these differences simply as ‘local specificities’ or ‘context’ is insufficient. While such terms may apply broadly, it is the transition of property rights, the introduction of new tenure structures and the construction of new markets that distinctly characterize ‘postsocialist’ gentrification. Our findings reveal that there is a multiplicity of ‘postsocialisms’ rather than a generalized model. Oversimplifying these differences risks overlooking fundamental variations in favour of a more convenient label. In this sense, our research offers new insights into postsocialist gentrification in two ways: • What unites ‘postsocialist’ gentrifications is their foundational starting point: comprehensive institutional reforms designed to dismantle socialism and establish marketdriven housing systems. These transformative reforms, which can be characterized as ‘anticommunist’ (Chelcea and Druţă,2016), have established unique path dependencies that shape the trajectory of gentrification and result in significant differences, not only compared to other global contexts but also within the former Eastern Bloc itself. • While some scholars argue for a departure from the postsocialist framework (Müller,2019; see also Gentile,2018), we advocate for a more nuanced approach. It is essential to unpack the concept of postsocialism and recognize the diverse trajectories within postsocialist societies. These societies are influenced by a complex interplay of ‘Western’ models, indigenous path dependencies and other dynamics (such as patrimonialism, socialist heritage, authoritarian developmentalism). This mosaic of influences means that gentrification can follow a variety of distinct paths, reflecting the varied and multifaceted nature of postsocialist transitions. In the field of gentrification studies, these findings have two significant implications. Postsocialism should be conceptualized as comprising multiple, distinct institutional reforms that have created unique path dependencies. These reforms deeply influence the dynamics, temporalities and patterns of gentrification. As a result, gentrification in cities such as Sofia, Leipzig or Tbilisi differs not only from gentrification elsewhere but also from one another. Thus, it is crucial to emphasize the specific trajectories of postsocialist transition when studying urban change in this region. Superficial notions of ‘contextuality’ and ‘hybridity’ are insufficient for capturing these complexities. We advocate for more rigorous comparisons within the postsocialist region, rather than comparing it to a perceived Western norm of gentrification. 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