How Berliners are plotting a radical ‘expropriation referendum’ to fight housing crisis

How Berliners are plotting a radical 'expropriation referendum' to fight housing crisis
"Expropriate Deutsche Wohnen & Co." Photo: DPA/Paul Zinken
At the Kottbusser Tor roundabout in Berlin's fashionable Kreuzberg district, 29-year-old Jannick is waiting in line to sign a petition which he says has captured the "zeitgeist" in the German capital.

He is one of 170,000 signatories needed to launch a referendum on expropriating large property developers, a drastic and unprecedented move in the fight against Berlin’s housing crisis.

“Everyone has the right to have a place to live,” Jannick tells AFP as he waits to add his name to the list of those urging the state to forcibly buy back properties from large real estate companies.

The “Expropriate Deutsche Wohnen & Co.” initiative, named after the biggest property company in Berlin, targets companies with more than 3,000 apartments in their portfolios.

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Unthinkable just a few years ago, the initiative is gaining more and more support from Berliners exasperated by ever-rising rents and a housing crisis which threatens to get even worse due to the coronavirus pandemic.

In a city where more than 80 percent of residents rent their homes, the capital’s attractiveness to investors and structural lack of housing sent prices soaring by nearly 85 percent between 2007 and 2019.

Rent cap

Berlin’s city-state government already moved to freeze rents for five years from 2020 in a bid to halt runaway gentrification.

Yet the much-disputed “rent cap” preventing rent hikes for 1.5 million apartments has seen the number of rental offers plummet as owners decline to put apartments on the market, according to the German Institute for Economic Research (DIW).

Many private landlords are waiting to see whether the cap will be upheld in a long-awaited constitutional court ruling which is expected in the coming weeks.

“We need a long-term tool, and putting real estate assets into common ownership is one solution,” Ingrid Hoffmann, a spokeswoman for “Expropriate Deutsche Wohnen & Co.”, told AFP.

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Housing insecurity has been compounded by the COVID-19 pandemic, which is also putting jobs under threat.

“The coronavirus crisis is going to lead to a real social emergency when it comes to housing,” warned rental association Berliner Mietverein in February.

According to a study by public savings bank Sparkasse, one in four Berliners expect their financial situation to worsen in 2021.

Unemployment rose to 10.6 percent in the German capital in 2020, a two-point rise on the previous year and almost 5 percentage points above the national average.

“I lost my student job because of the pandemic. If I need to find a new apartment, I’m scared I won’t be able to,” said 23-year-old Jan, a Berlin resident who is also supporting the expropriation initiative.

‘Unconstitutional’

“Expropriate Deutsche Wohnen & Co.” bases its claims on Article 15 of the German constitution, which stipulates that “land, natural resources and means of production may…be transferred to public ownership” in the public interest in return for compensation.

Adopted in 1949 with the founding of the West German state, the article was long forgotten during the Cold War with its tensions between capitalist West and communist East.

The petition, which collected 77,000 signatures in its first phase, needs more than double that number to reach the 7 percent of the city’s electorate required for a referendum.

Deutsche Wohnen, which owns around 111,000 of an estimated two million rental apartments in Berlin, dismissed the initiative’s aims.

“Expropriation is neither constitutional nor financially viable for Berliners,” Marko Rosteck, a spokesman for the property giant, told AFP.

The city’s social-democratic mayor Michael Mueller is also sceptical, arguing that he would prefer “partnerships with the private sector”.

With tensions escalating in 2019 over rising rents, Berlin authorities spent almost a billion euros to buy back 6,000 former public housing apartments that had been privatised.

SEE ALSO: These are the reasons why so many Germans rent rather than buy

Yet the city is already laden with debt, and critics warned that by renationalising homes, the authorities were participating in property speculation.

Federal finance minister Olaf Scholz in February declared housing “one of the biggest social issues of our time”.

Despite the acute shortage, a 2014 referendum on housing in Berlin saw citizens reject planned new builds on the former Tempelhof airfield south of the city centre.

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  1. I understand that Germany has a different economic model to the one us Anglo Americans are used to and is far less brutal. The forces of supply and demand, however, cannot be ignored and, ultimately, the only solution is to increase the supply and build more (I would suggest selling them at a discount and restricting ownership to buyers who are going to live in them for a minimum of 5 years on 100% government backed mortgages. You can sell up earlier but would have to pay back the discounted amount). Historically most interventions (such as rent caps) fail, as they reduce investment and the quality of the existing local housing stock as well as driving prices up in the surrounding areas. My advice is stop renting and borrow borrow borrow and buy buy buy!

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