| LEIPZIG, Germany
LEIPZIG, Germany When Ilka Weingart first entered the abandoned east German butcher's store where she wanted to open a soap shop, she gaped at holes in the floor, decades-old layers of grime, and rust-colored stains.
After two years' scrubbing, hammering and cleaning, Weingart now proudly leans against a wall of floral Art Nouveau tiles she discovered beneath the dirt and presents her shiny new shop -- for which she does not pay a penny in rent.
She is one of a colorful group of artists, yoga teachers and young entrepreneurs who are renovating derelict buildings in Leipzig, one of many cities in East Germany that suffered depopulation after unification in 1990.
Fixing floors, windows and roofs and making sure no squatters move in, they live rent-free as part of a scheme that its initiators hope will not only save historic buildings but also turn the city into a cool arts hub.
"I wouldn't have been able to afford a normal shop," says the 37-year-old, one of 120 people acting as 'guardians' to homes abandoned when many of Leipzig's inhabitants left for West Germany or moved out to the modern suburbs.
With their coal-fired ovens and shared toilets, Leipzig's listed turn-of-the-century buildings, which once housed the wealthy bourgeoisie, suddenly became unattractive.
In the decade after the fall of the Berlin Wall, some 100,000 people left the city where Richard Wagner was born and Johann Wolfgang von Goethe went to university. Its population is now growing again, recently edging over half a million.
"An estimated 40,000 flats still stand empty. That's about 14 to 15 percent of all of Leipzig's apartments," said Juliana Pantzer from Haushalten, the association running the scheme.
To many landlords, it did not seem worth renovating their buildings as the prospect of well-paying tenants was so far off. Crumbling facades still line many streets.
"We are trying to stabilize the situation and rescue ... the buildings," Pantzer said, adding 12 formerly abandoned homes had already become galleries, shops or studios since the initiative was launched four years ago.
Owners benefited because squatters were deterred, and the buildings were being renovated and maintained for free, she said. After a five-year period as guardians, "tenants" will have to negotiate regular rental contracts with the landlords.
CHAOTIC AND HIP
Weingart's yellow brick building in one of Leipzig's poorest areas near the Baumwollspinnerei, a former factory that once housed one of Europe's largest cotton-spinning mills, stood empty for 15 years before the owner decided to make it available to the project.
The paint is still peeling off the ceiling above the staircase. Thieves stole the wooden banisters years ago.
Weingart and her neighbors have put in new windows, floors and doors and set up a large paint-spattered table and a barbecue on the dry grass in the garden.
A few flights upstairs, 27-year-old artist Nils Franke sits on a worn-out sofa opposite a giant self-portrait. Paint brushes, tubs and newspapers litter the floor.
"It's a bit chaotic," said Franke, his beard twisted into two dreadlocks. "But I like it. You can do your own thing."
Franke and his two artist friends say they put about 800 euros ($1,170) each into the renovation of their work space. Now, they only pay a few dozen euros in fees per month to the Haushalten group, on top of electricity and water bills.
"It's cost efficient," said Raymond Grotegut, who like Franke, studies at Leipzig's prestigious Academy of Visual Arts.
Pinning a canvas onto a frame, Grotegut said the project had helped change the neighborhood.
"It's hip," the 33-year-old said. "The entire area has become more lively. There are new markets, new art shows. And lots of small boutiques and galleries have suddenly emerged."
The Baumwollspinnerei opposite has become a new tourist attraction after young artists from the New Leipzig School, such as painter Neo Rauch, set up there.
"The first step is always for artists to arrive. Then firms follow and finally, people fill up the remaining flats," said Grotegut. "We're at the first step at the moment."
Even though Leipzig's population has slowly started to grow, unemployment in the city still stands at some 17 percent -- well above the national average of around 8 percent.
Haushalten now hopes to extend the concept, and the eastern cities of Halle and Chemnitz are already working on similar schemes.
Standing in a freshly renovated workshop a few blocks away from Weingart's building, guardian Anja Kessler said she hoped her candle-making shop would turn into a community meeting point.
"The kids in this neighborhood don't have much offered to them," the 31-year-old said as she scraped off Communist-era wallpaper. "That's where I come in. I can teach them how to make candles."
Once the works are finished, Kessler's building will also feature a yoga studio and a vegan restaurant.
"This is like a giant playground!" she exclaimed, her eyes sparkling behind purple glasses as she wiped her hands on her wide, orange trousers.
New shops could help bring clients to the old cafe next door, said her 23-year-old neighbor Max Mueller.
But looking at the colorful group carrying tools into the building, he added: "I just hope they won't be too loud."
(Editing by Sara Ledwith)