Many cities' economies rely on their banks, their industries, or even their major airports.

Berlin, however, is unique — the German capital subsists on the debaucherous reputation of clubs like the notorious Berghain.

While Berlin earns billions through its wild nightlife, the very same clubs that brought Berlin its success are now threatened with ruin.



A blonde girl in a brightly colored jacket says it's one of those nights where anything could happen, although strictly speaking it's their fifth night in a row now. Melissa and her partner left Montreal a few days earlier on a mission: two weeks in Berlin, a different club every day.

They've now been on the road for 24 hours. Melissa's girlfriend has fallen asleep in her lap and Melissa's not looking quite as fresh now either: her shoulder-length hair is tousled and her polyester jacket smells but she still doesn't want to sleep.

She sprinkles the last remaining crumbs of her speed onto her smartphone screen, pushes the powder together into a line, and snorts it up her nose with a noise somewhat reminiscent of a walrus grunting.

The city is still considered the place to be for those who want to fulfil their desire for freedom. View Apart/Shutterstock

Nobody in the small trailer seems particularly phased. Three Englishmen next to Melissa are smoking a joint and discussing Brexit. A Spaniard is on his hands and knees amongst the empty beer bottles on the floor of the trailer, apparently searching for a lost rabbit toy.

Welcome to About Blank, a techno club in east Berlin. In the back corner of the club’s garden stands the famous red trailer known as "Ziehwagen" – in German “Eine Line ziehen” means “to have a line” and a “Wagen” is a car – the rest is self-explanatory. Anyone can do a line in here without fear of bouncers or the police.

The "Ziehwagen" is Berlin pragmatism at its best: people are going to take drugs anyway, so they should at least be able to do so in a safe environment.

Read more: Airbnb wants to help travellers go clubbing with a Berliner

Melissa finds Berlin "totally 'crazy' awesome" – the words just fly out of her mouth. She works night shifts, which means she rarely goes out — but, according to her, in Montreal the nightlife sucks anyway, as everything closes after three o'clock in the morning.

There are around 120 clubs offering their own programme, with local and international DJs as well as live music. Flickr/Montecruz Foto

Melissa's legs are jittering up and down, causing the head of her sleeping companion to bounce around. "Here in Berlin the real party starts in the middle of the night, you can't party like this anywhere else in the world! Obviously we went to the Brandenburg Gate too but only to take a photo for Mom, haha!"

Berlin is still regarded as a modern Babylon

While Berliners think of their city as dysfunctional, dirty, and — of late — too expensive, the rest of the world associates it with sex, drugs, techno, intoxication, and excess.

The city is still regarded as the place to be for those who want to fulfil their desire for freedom — whether "freedom" means having oral sex on the dancefloor of Berghain or getting high in Kater Blau and dancing in a pink bear costume until sunrise.

Berlin has become the third most popular destination for city breaks in Europe after London and Paris. Hannibal Hanschke/Reuters

But it's not just drug-lovers and techno-nerds who are drawn to Berlin's nightlife; the city has something for everyone. There are around 120 clubs offering their own programme, with local and international DJs as well as live music.

There are over 400 nightclubs and venues in Berlin

As well as being home to over 400 nightclubs and venues, around 2,700 parties and events take place every month.

Berlin is one of the few metropolises in the world where there is no closing time and perhaps the only one where 24-hour parties are a rule rather than an exception.

The most famous of them is Klubnacht in the notorious club Berghain, which starts on a Saturday night and ends sometime on Monday. There are said to be attendees who fly in from Tokyo or Buenos Aires to feel the world famous technobass in the former German Democratic Republic boiler station.

There are over 400 nightclubs and venues and every month, arount 2,700 parties and events take place. Hannibal Hanschke/Reuters

Other cities thrive on their banks, their factories, their major airports. Berlin has nothing like that. For the city, chronically over-indebted and with almost no industry nor any notable corporations despite being 28 years on from the German reunification, the club industry is what managers call its "growth driver".

Frankfurt sells financial products, Stuttgart sells cars — and Berlin sells its reputation

Berlin's disrepute has become a brand that brings money into the city, to clubs, pubs, and shops, as well as to the construction industry and the city treasury.

With 31 million overnight stays a year, Berlin has become the third most popular destination for city breaks in Europe after London and Paris. One out of every three visitors to Berlin says they've come for the nightlife. In Berlin, the party tourists who roll into the city with their suitcases every weekend are known as the "easyJet set" due to their back-and-forth travel on the budget airline, and they help Berlin's economy rake in over 1 billion Euro a year.

Berghain, Berlin. Flickr/Bart van Poll

As a result, airlines Ryanair and easyJet have actually coordinated their flight schedules around these party tourists and luxury hotels like Orania in Kreuzberg even feature photos from techno-parties on their websites. Around the larger clubs, economic microcosms of hostels, bars, cafés, restaurants and kebab stalls have formed, which make their main turnover from club-goers.

When Berghain moved into the abandoned boiler station behind Ostbahnhof station in 2004, there was nothing around. In the early years, ravers would wait in line for hours without food or drink, until one day a nice Polish guy came and would pour you vodka for a little cash. Nowadays there are snack cars with deep-fryers, sausage grills, and beer refrigerators at the front of Berghain. Vendors work in shifts from Friday evening to Monday morning — one confessed that they can make several thousand euros each weekend.

At the front of Berghain, you'll find vendors who are selling food and drinks to queuing revellers. Hannibal Hanschke/Reuters

For 'party tourists' in Berlin, there's even specialised accommodation

There's also accommodation that seems to specifically target Berghain visitors. You can actually see the club from the terrace of Sunflower Hostel and many Airbnb hosts advertise their rooms as "Room close to Berghain".

Jens Wagner's apartment is only a few minutes' walk from the club. The 42-year-old opens the apartment door barefoot, in a T-shirt and jeans, and explains that his only conditions for guests are that they keep their shoes off, bring no meat products into the house, and don't smoke cigarettes in the apartment.

Read more: A Berlin councilwoman wants to shut down legendary club, Berghain

Wagner works full-time as a civil servant and part-time as a host. He bought the two-storey attic flat three years ago to rent two tiny rooms with bunk beds to "party tourists". Each of his visitors gets an info sheet: besides Berghain, Wagner also recommends the vegan supermarket around the corner and the Görlitzer park for pot. Wagner once had three Dutchmen book to visit who, at one point, didn't return to their accommodation for a day and a half.

"I started to worry a bit," said Wagner. But at some point they showed up again — they'd been in Berghain for 36 hours and told him that they'd had the most exciting time of their lives.

For Airbnb hosts like Wagner, clubs simply allow him to run a business. Hannibal Hanschke/Reuters

Wagner himself has never been inside Berghain — for him the club is simply a means to run a business. In a given year, the host can earn roughly $12,500 through Airbnb after taxes but he only works four days a week and spends every Monday with his two-year-old son, who lives with his mother.

"Berghain guests have no idea that they're financing my child support," he said.

Berlin's population increases by roughly 40,000 inhabitants each year

It was former mayor Klaus Wowereit who sold the notion of "Berlin — poor but sexy". It wasn't just tourists who came; new residents arrived too. The population rises by approximately 40,000 residents every year, and in a few years, the city could cross the four million mark. While not everyone comes for the nightlife, many do — and many of those who come are the sort of people Berlin urgently needs — young, educated above average, and international.

"Berlin — poor but sexy." Hannibal Hanschke/Reuters

As a result, Berlin has become the most important location for the creative and start-up industries in the country. Music, software, design, film and advertising companies generate almost 10% of Berlin's total economic output, and provide nearly 11% of the jobs of all employed people. Many companies now have more foreign employees than German ones.

The success the clubs have brought the city is now threatening to destroy them

It's difficult to say how many jobs depend on the club industry. What is certain, however, is that the success the clubs have brought the city is now turning against them and threatening their existence. It is not only new residents, companies and capital that moved to Berlin but also real estate investors: In 2017, real estate prices in Berlin rose by more than 20%; more than anywhere else in the world.

Most clubs are still run in the spirit of the post-reunification years. They're projects for lovers of music more than yield-oriented companies. About Blank, for example, where Canadian Melissa danced with hipsters, punks, and white-haired hippies, is owned by a collective of left-wing squatters who stress the importance of not making a profit.

Even before the real estate boom, it was difficult to make money from clubs and it's only getting harder and harder. Hannibal Hanschke/Reuters

Even before the real estate boom, it was hard to make money from clubs and it's only getting more difficult. Most clubs in Germany don't last more than two years — what's hot today may not be tomorrow. Moreover, the rental contracts usually only run for five or ten years. Club-owners simply can't rely on the assumption that those contracts will be extended, after putting so much money into developing and building a club.

Clubs are viewed as risky business by banks

To banks, the notion of getting involved with clubs is about as attractive as a Venezuelan government bond. As a result, it's near impossible for club operators to obtain a bank loan. So many have to make do with loans from breweries or tobacco companies. The starting capital for Tresors, Berlin's oldest techno club, came from tobacco company Philip Morris in 1991 and Berghain was financed by Radeberger, a brewery.

Many clubs can bring in five-digit sums on a given evening, however they also have very high costs. The fees for international DJs are immense. Even if they work in Berlin for slightly less money than in Ibiza or Miami, the stars want between $3,400 and $11,400 for a 90-minute performance.

Berlin's population rises by approximately 40,000 residents every year. Hannibal Hanschke/Reuters

The many remaining hours of a weekend are filled by resident DJs or young artists. Here, too, 24-hour parties with several dance floors can easily generate thousands of euros in costs. In addition, there are expenses for flights, accommodation, taxis, foreign tax, music licence fees, and contributions to artists' social security.

Even larger clubs are only profitable because they rent out their rooms on weekdays for company anniversaries, Christmas parties, or trade fairs. Side businesses like this, however, are as lucrative as they are risky — those who end up with an overly commercial image are quickly rejected by the scene as uncool.

Only Berghain founders Norbert Thormann and Michael Teufele seem unaffected by such problems. They founded their club 15 years ago and are still considered one of the hottest party venues in the world. Behind it is a highly profitable company. They recently made $5.36 million in turnover and $1.14 million in profit, according to the economic service Credit Reform.

Many club-owners in Berlin have to manage constantly rising rent as well as foreign investors. Hannibal Hanschke/Reuters

Thormann and Teufele made what was probably their most important entrepreneurial decision in 2010, when they bought the old boiler station for $1.71 million from the Swedish energy group Vattenfall — in today's money, a bargain buy.

The club is one of the few in the city that owns its building and doesn't have to worry about the constantly rising rent and foreign investors bringing their own profit maximization laws to Berlin.

Berghain is an exception. Clubs like SchwuZ in Neukölln, the republic's biggest queer club, tend to conform more to the rule. Its managing director leads an enterprise with 100 employees, for $3,378 gross a month.

Tourists who come into Berlin each weekend for its party scene are known as the "EasyJet set". Hannibal Hanschke/Reuters

Gretchen in Kreuzberg, a gloomy spot in the stables of a former 19th century military barracks. The operators, a tattooed couple in their early forties, are proud to hire the best drum 'n' bass DJs in the world. To make it financially possible, they had no children, work in the club themselves seven days a week, and treat themselves to less hourly pay than their bar staff.

The more residents head to nightlife districts, the more noise abatement notices threaten to destroy clubs in Berlin

Nevertheless, Gretchen is in danger. On the wasteland behind the club, which has been overgrown for decades, blocks of flats are soon to be built. It's likely only a matter of time before the first noise abatement notices are served, as has been the case elsewhere in the city.

When you see Prenzlauer Berg littered with child-friendly cafés, designer furniture shops, Porsche Cayennes and organic grocery stores, it's hard to imagine that 20 years ago the area was one of the city's hippest nightlife districts.

One of the last clubs there, the legendary Knaack, had to close in 2010 after running for 58 years. An investor had placed a chic residential building directly next to one of Knaack's walls — which wasn't soundproofed. The authorities had failed to insist on sound protection at the time planning permission was arranged.

Rental contracts for clubs usually only run for five or ten years. Hannibal Hanschke/Reuters

By the time the building was finished, it was too late. According to German law, noise above 45 decibels is considered a hazard to health after 10 o'clock at night, so Knaack had no chance in court, despite the fact that the club wasn't to blame for the situation. The matter snowballed into a political scandal.

To prevent a planning error from happening again, in 2015 the club scene started a so called “club cadastre” to record every club, discotheque and live music venue in Berlin. The state government of Berlin has instructed building authorities in all districts only to approve new buildings that won't endanger the future of the clubs. That, at least, is the theory. However, many apartment buyers claim to want to live an "urban life", but heaven forbid there's actual urban life taking place in their vicinity.

For about four years now, Living Levels in Friedrichshain — a white tower of luxury apartments in the east of the city — has towered over the river Spree, with the most expensive apartment costing $17,000 per square meter.

Real estate prices in Berlin rose by more than 20% last year. Business Insider/Sam Shead

As soon as the first residents moved in, they noticed that the view of the club Sage Beach on the opposite bank of Kreuzberg is kind of cool — but, surprisingly, it also produces a lot of noise. Since then, the telephone in Sage Beach has been ringing regularly with complaints like: "Turn off the music — I can't watch the TV with the balcony door open."

The price of land has been pushed up by as much as 600% in the past six years

Nowhere is the problem clubs are facing as clear as it is in this area, on that section of the Spree between Friedrichshain in the north and Kreuzberg in the south - where the Wall used to be. And where, after the fall of the Wall, a group of mavericks discovered the riverside properties that had been abandoned for decades, and opened places such as Bar 25 and Watergate.

These plots of land are among the most expensive in Berlin today. In the past six years alone, the price of land there has risen by 600%. Bar 25 no longer exists, Watergate is struggling to survive. And Berlin is at a crossroads.

Ultimately, the question is: who owns the city — its inhabitants or the investors buying it up? Does Berlin want to become a rich, clean, and settled city like Munich? Or does it want to preserve its brand as an experimental playground for creatives, liberal free spirits, and those after alternative lifestyles? And what must politicians and urban planners do to save Berlin and it's wild side from extinction?

Who owns Berlin — its inhabitants or its investors? Hannibal Hanschke/Reuters

Berlin must now quickly decide what it wants to be and where things stand

If Berlin does nothing, others such as the likes of Marc Samwer will make the decision for the city themselves.

With assets of around $1 billion, Samwer is one of the richest inhabitants in the city. After working with his brothers to build multi-billion-euro company Rocket Internet, he's now more involved in real estate transactions than he is companies. One of his more recently acquired assets includes an old Kreuzberg post office building where you'll now find the club Privatclub, thought of as the talent factory for Berlin's music scene.

Norbert Jackschenties who's in his mid-fifties runs Privatclub. According to him, he owns four pairs of trousers and ten T-shirts. He sits on a sofa in the back room of his club and does what he doesn't like — talking to the press — but it has to be done: his life's work is in danger.

If Samwer were to double his rent, that would be the end for the club. At the moment, Jackschenties pays $13 per square meter without heating. The rooms of the neighboring Postbank branch, which moved out in 2018, were offered on online real estate platform Immoscout for $29 per square meter. The new tenant is a digital hub for startup companies.

In the past six years alone, the price of land in Berlin has risen by 600%. Hannibal Hanschke/Reuters

In this building, at Skalitzer Strasse 85, the whole problem of gentrification is nicely presented in a nutshell. One commercial tenant after the other had to move out out in recent months and was replaced by start-ups financed with venture capital — by companies drawn in to Kreuzberg precisely because of places like Privatclub.

TreasureHunt, a game app developer with 30 employees and $8.4 million dollars investment money, moved in above Privatclub in December 2017. The company belongs to Kyle Smith, an affable 32-year-old Canadian who came to Berlin seven years ago and wants to stay for good. He brought a bottle of whiskey to Jackschenties when he moved in, as a friendly gesture to introduce himself to his new neighbor.

Smith can't understand why Jackschenties thinks it's down to people like himself that Kreuzberg will soon be unaffordable for cultural establishments, saying: "But we're only a small company and we love creativity in Kreuzberg."

The government has, so far, not been particularly successful in defending Berlin's bars and clubs

Jackschenties placed his last hopes in Senator of Culture of The Left, Klaus Lederer, like so many other Berlin club-owners. Namely as it would seem Lederer is the ideal person for defending such establishments: he's left-wing, gay, a self-confessed pothead, and even a clubgoer. But Jackschenties says Lederer, too, unfortunately just wrote a letter to Samwer, which didn't help at all.

Jackschenties placed his last hopes in Senator of Culture of The Left, Klaus Lederer. YouTube / Jüdisches Forum

Lederer said rescuing the clubs was very important to him, even getting himself out of an ongoing meeting in the Berlin House of Representatives to discuss the subject in an interview. Unfortunately, the city was unable to prohibit "turbo capitalists" like Samwer from upping commercial rent, as it was a matter of federal law.

In the past, Lederer admitted, a lot went wrong, but now the city is really trying to help the clubs. The government has set up a fund of around $1.14 million to financially support clubs with noise protection conversions. In addition, the city itself is looking for new club locations.

While Lederer's initiatives are all great ideas, they're nothing more than band-aids. There's no such thing as a consistent urban planning policy that simultaneously ensures enough affordable living space and protects culture and subculture in the inner city.

Senator for Economy, Energy and Enterprises for The Greens, Ramona Pop, sees things very differently from Lederer — according to her, art and culture don't necessarily have to sit at the heart of the city center.

Senator for Urban Development and Housing in Berlin for The Left, Katrin Lompscher, had promised Berliners 20,000 new apartments a year after the state elections, but it looks like she's far from being able to keep this promise. Lederer and the clubs shouldn't expect any help from her, for it looks as though her need to fulfill her election promises could now destroy one of Berlin's greatest cultural showcases of recent years.

The hippy village, Holzmarkt, was built on the ruins of Bar 25 by the very dreamers who had rolled trailers and wagons to the spot in 2004, lived there, and celebrated the wildest of costume parties, where thousands of guests enjoyed confetti cannons, mud-wrestling, and champagne showers.

Berlin has something for everyone. Hannibal Hanschke/Reuters

The group still lives together in a shared flat but have proven themselves to be very good business people. They persuaded a Swiss pension fund to buy the property and lease it to them, then built an adventure playground for adults right by the water — in addition to a new club, Kater Blau, there are several function rooms, a restaurant, sound studios, galleries, a public park, and even a kindergarten.

Since mid-May, however, a flag with the command "Dance!" has been flying over the Holzmarkt— "Dance as long as it's possible", that is to say. The manager of the Holzmarkt, Juval Dieziger, hoisted it.

It was 15 years ago he came to Bar 25 for the first time. Well, he never left. Standing on the marketplace below the flag, with his shaggy grey beard and tired eyes, looking like a shipwrecked sailor, he said: "Everything we've been fighting for for years is at stake."

The reason he hoisted the flag is a dispute over a still unbuilt section of Holzmarkt: the Eckwerk, a network of several timber high-rise buildings in which students and creative people will be able to live and work — a creative hub of sorts.

Holzmarkt, Berlin. YouTube / tino: berlin

Since the city government promised to build more apartments, the building authorities have blocked the development plan — apparently because the municipal housing association suddenly wanted to build student apartments there instead. The lawyers argued for months and deadlines continued to be missed, until the Swiss pension fund terminated the lease agreement for the construction in April 2018.

It's the end of a dispute in which there seem to be only losers: Holzmarkt is now threatened with insolvency, as the cooperative had invested around $11.4 million in planning its construction on the site. 220 jobs are now in danger and it's unlikely any affordable apartments will be built on the site.

To save the rest of Holzmarkt, the company behind it sued the city for 19 million Euros in damages. Nevertheless manager Dieziger still hopes the city and Holzmarkt will find a friendly agreement. And independent committee of planning experts is trying to arbitrate between the two parties. In March they want to propose a suggestion for a compromise. Until then the Swiss pension fund promised to stay put. But they will not be patient forever.

Since the fund bought the land seven years ago, the land price has increased sevenfold, so the Swiss could easily sell the land for a huge profit — and real estate speculators are already queuing up to buy more of Berlin.