First they took Manhattan

In Berlin, the capital of the largest, richest country in the EU, you can rent a flat for 500 euros (£346) a month and get around - on its ultra-reliable public transport system, made up of cherishable shiny yellow trains, buses and trams - for buttons. It's the size of London but contains half the population; it's surrounded by lakes and dense forest; and, generally speaking, it's not full of prats. Heaven, in other words.

Even better, it doesn't exist to make money. Berliners wear T-shirts that say "Poor but sexy", referring both to themselves and their beautiful, near-bankrupt city. (What would the London one say? "Rich but paranoid"? "Poor but armed to the teeth in case I get shot on my estate"?) Therefore, the thought of Brad Pitt and Angelina Jolie spending a few loose coppers on a penthouse in the centre of Berlin, shortly to be followed by half of Hollywood and the world's splashiest art dealers, doesn't have me leaping for joy.

Berlin has been "discovered" by America's bi-coastal elite not so much for its cheapness, but for the creativity that tends to flourish in such conditions. They love how every public surface is smeared with graffiti (damn you, Giuliani, for making New York functional and safe), which reminds them of Lower Manhattan in 1981 and the days when they could hole up in a big loft cackling "This will make great art!" as their beloved city went to the wall.

Artists from the US, Japan and the rest of Europe have been flocking to Berlin for the last 10 years, where they can spend very little but still live a charmed city life that's rich in every way but cash. It seems too good to be true, and, in my experience, it is. I first visited eight years ago and fell so violently in love with the place that, in 2004, I went to live there for a few months in the hope of writing the bulk of my first book without having to worry too much about money.

In the event, I spent three months drinking coffee and whizzing around town on an old GDR postman's bike pretending I was in the film Good Bye Lenin! There's nothing like removing the imperative of making a few bob to take the grist out of your mill. I wasn't only too happy to do any work, I didn't actually have to do any work, which made me even happier. No wonder Hollywood actors identify with the city.

Berlin is, in its present state, a perfect place to live in, but as a place to do work in it's rubbish, precisely because it's too cheap, too laid-back, to encourage any activity beyond having a small beer and people-watching. A city more unlike New York or London you could not imagine, for better or for worse; but now it's teetering on the edge of the Lower-Manhattan or Shoreditch cycle of discovery by poor artists, then by rich artists, then by property developers who see money in "edginess", causing the poor artists that made it that way to move out. Anyone who's seen scrappy neighbourhoods go gentry can identify with the decidedly mixed gains that go with it: you get stencils of Che Guevara on the bus stop instead of "KC chats waffle".

What Berlin offers in its present state is an alternative to the idea of a capital city as money-making machine, where you go to make your fortune but, too often, find yourself trapped by the very machinery that will help you to make it. Thanks to its overdue discovery by the Pitt-Jolie power team, Tom Cruise, and half of downtown New York, the very qualities that attracted them may soon disappear. The idea that a tiny elite might swoop on a city not because they don't have money, but because they have bags of cash and want to remember what life's like without it, is almost too mind-dulling to imagine.

Linsey Hanley