The Spreehotel, on the lakeside outside Bautzen, does not look much like a four-star hotel. When it was first turned into a home for 150 refugees in 2014, the hotel's star rating made all the headlines. But considering that it originally had 80 beds, the 230 Syrians, Afghans, and Iraqis living there now are not exactly basking in luxury.

"All they want is to work, I hear that from everyone, every day," said Firas Al Habbal, a Syrian refugee who has lived in Bautzen for nearly two years.

Of course, a lot has changed at the hotel since last Sunday, when another former hotel in Bautzen, which was scheduled to become a refugee shelter in the coming weeks, was set on fire, and around 20 or 30 gathered outside to cheer on the flames.

"I'm scared now," said Al Habbal. "I used to go out at night, when I needed fresh air, now I am a bit worried, because this isn't just an opinion anymore - this is violence, it's dangerous. There used to just be protests, but this isn't just showing your opinion."

New escalation

Al Habbal is what some Germans like to call a "model refugee." The 23-year-old has learned the language, and he has part of a degree in medical technology, though the war put an end to his studies in Damascus.

Being a translator for the inhabitants of the Spreehotel, he has had to spend some time in the last few days reassuring them. "They asked me, is it true that an asylum home was burned? And I say, yes, but it was only in planning, there was no one living there." The immigrants were also happy to see the police driving around the home more frequently in the days following the fire, checking to see if any strangers had been seen around.

But the general atmosphere has definitely changed. "I know a few people who wanted to stay in Bautzen after being granted asylum, but now they say: we have to think about whether they want to stay or leave," he said. "A lot of the men want to bring their families, but now it's difficult, because the children have to go to school, and they are not sure if they can."

The sense that a line was crossed last Sunday morning has affected many Bautzeners. Torsten Wiegel runs the Steinhaus cultural center in town, where many refugees come to join in activities, or bring their children. The Steinhaus has known acts of sabotage before - once all the tyres of the cars belonging to the center were slashed - but this, says Wiegel, represents a new "level of escalation." "It questions our whole basic life here," he said.

The head of Bautzen's foreign nationals' department, Lars Eibisch, was more bullish in the aftermath of the fire.

"We knew that things like this happen from the media, and we always hoped that something like this wouldn't happen under our jurisdiction, that people from Bautzen wouldn't do that," he told DW after giving a press conference on Bautzen's efforts to integrate asylum seekers into the job market.

"But we won't let anyone blackmail us or get us down - it won't stop our work or our approach. We're not scared of that."

The color of Bautzen

The Steinhaus cultural center regularly hosts events staged by the "Bautzen bleibt bunt" ("Bautzen stays colorful") campaign, whose 50 or so active members volunteer their time and skills to offer language lessons, counseling, painting classes, and volleyball. At a meeting with journalists on Monday night, the half-dozen or so members appeared torn on how racist Bautzen is - and especially about how it should be depicted in the press.

While one member, Manja Gruhn, estimated that a third of the population harbored racist views, another volunteer, Anne-Marie Russew, winced every time a reporter's questions turned to Bautzen's far-right scene. "It's a minority, the active ones, I mean," she insisted.

What they could agree on was that the state government of Saxony, led by conservative State Premier Stanislaw Tillich is always too slow to condemn attacks on refugee homes.

As far as "Bautzen bleibt bunt" is concerned, all of Germany's ruling politicians have lacked the courage to change the debate from refugee "crisis" to refugee "opportunity" - making them partly responsible for the atmosphere of fear that leads to arson attacks on refugee homes.

"They don't take a stance - that's missing," one said.

For his part, Al Habbal says he has rarely had any trouble in his two years in Bautzen. "Nothing has happened to me personally," he said. "Sometimes I see people who don't like us, but that doesn't interest me. Not everyone in this world has to like me. But a lot of people in Bautzen help refugees."

Flaws in the system

But even as he praised Angela Merkel ("she's better than every one of the Arab presidents"), Al Habbal has been in enough German registration offices to see the flaws in the asylum system. Not unlike many conservative politicians in the country, Al Habbal also thinks people from countries officially deemed "safe" should be deported more quickly.

"If they don't have a right to stay, why can't they just be moved out more quickly? There are people who have given their fingerprints in several countries - they've been to France, to Italy, to Sweden, and then after ten years in Europe they say they'll try Germany," he said. "And these people sit here for a year and a half or two years. There are some cases where they haven't even had a hearing yet."