During the second half of the 12th century Henry the Lion made Braunschweig the centre of his power and ensured the further development of the city. He built churches, dried out the marshland east of the river Oker and founded the new district Hagen. After his death, Braunschweig developed into the biggest and most influential inland city of Northern Germany through the initiative of its citizens and the support of the Emperor. Otto IV., the son of Henry the Lion, bestowed many privileges upon the citizens, i.e. the exemption from import duties within the whole empire. And at last the city was able to compete with major medieval cities like Cologne and Frankfurt. In the year 1247 Braunschweig joined the Hanseatic League as the third city after Lübeck and Hamburg.
With the growing affluence of the citizens, demands for housing changed. Houses were constructed bigger and to be more durable. There were splendid half-timbered buildings and some stone houses. Whereas the building density was rather loose before, the urban landscape now became more closed. Otto IV. made sure that the city was secured like a fortress by walls. As the population kept growing, houses were built much closer together.
Market squares were the centre and the stage for everyday life. The Altstadtmarkt was the most important one. Trading, meetings and processions were held there and they also served as courts of law. Furthermore fountains were built there. These fountains were reservoirs of water that was used for drinking and fire fighting, .They were of the utmost importance as there was as yet no running water in the houses. Often these fountains in the city were not productive enough and were hence fed from the surrounding area through wood- or lead pipes.