Berlin Aims to Seize Properties of Mega-Landlords to Increase Affordable Housing

Affordable housing demonstration in Berlin

A woman with a cooking pot lid and a sign takes part in a demonstration of the alliance ''Together against displacement and #Mietenwahnsinn'' against the ruling of the BGH on the rent cap in Berlin. The sign reads ''We just want affordable housing''. The court had overturned the rent cap. Credit Image: © Christoph Soeder/dpa via ZUMA Press


Housing Referendum Highlights the Power of Grassroot Tenants Organizing

A recently approved referendum in Berlin provides a radical example of the lengths some people are willing to go to provide fair housing for all.

Voters in Berlin approved a referendum that will allow the local government to expropriate 200,000 housing units away from mega-landlords and put them into public ownership.  

The referendum applies to all private homeowners with more than 3,000 units in their portfolio. It seeks to offer them prices “well below market rate” in exchange for their property, according to a report by German-American news outlet Digis Mak.

According to estimates by CityMonitor, the real estate value in question is more than €36 million, or $41.78 million. Backers of the referendum countered with €8 million for the property, or $9.28 million. They argue that higher prices are speculative because of inflated rents and values.

The referendum also has a powerful coalition of support behind it. More than one million people voted in favor of it, including more than 25% of voters in Berlin. But the measure faces an uphill battle as it is not binding on German lawmakers.

Companies such as Deutsche Wohnen, which owns more than 110,000 units in Berlin, are clearly in the referendum’s crosshairs. German real estate behemoth Vonovia is also on the list alongside Swedish company Heimstaden, which recently purchased 14,000 units in Berlin, according to a report by DW.com.

Some activists say it is the culmination of years of rising home prices and rents.

“The whole city said, ‘We don’t want speculators to have a voice in our housing.’ And that’s a decision that political leaders just can’t ignore,” Kalle Kunkel, an activist with the Expropriate Deutsche Wohnen campaign, told Digis Mak.

Political Rubicon

However, the political Rubicon that lays ahead for the referendum may prove too dangerous to cross in Berlin. Moreover, it may prove difficult to drum up support for a similar initiative in the U.S.

Franziska Giffey, a member of Germany’s Social Democratic Party (SDP) and the incoming Mayor of Berlin, told DW.com that she opposed the referendum.

“For me, the subject of expropriation is already a red line,” Giffey said. “I don’t want to live in a city that sends the signal: This is where expropriation is taking place.”

DW.com also reports that the SPD’s official party on the proposal is that it can only be achieved “through a politically and legally controversial socialization law, which would have far-reaching significance and would be new legal territory.”

The referendum also represents a radical departure from the way Berlin has developed over recent decades. Private companies have steadily purchased apartments from the municipal government and, in turn, continuously raised rents across the board. Political coalitions from the left have tried to stop the progress but to no avail.

The U.S. saw a similar phenomenon occur during the pandemic. 

According to research from CoreLogic, a real estate data analytics firm, investor activity across the country accelerated after October 2020.

“Investors have hardly missed out on the housing boom in the back half of 2020. Instead, they have just not been as active as individual buyers, who appear to have muscled investors out of the market by a small margin,” the research says.

Slow Solutions for Rising Rents

While renters across Berlin continue to face rising rents, solutions have been slow to develop.  

Berlin recently agreed to purchase more than 14,000 apartments from private owners in mid-September for a total of €2.46 billion, or more than $2.85 billion. The deal included 450 shops and brought the total of municipally-owned apartments in Berlin up to more than 335,000, or 20% of the city’s total, according to the Associated Press.

At the same time, lawmakers put forth a plan to build more than 400,000 municipally owned apartments within the next five years. However, some worry that the damage may already be done.

“For my generation, it’s nearly impossible to own a building or an apartment — something that has been very possible for our parents,” Jonas Becker, a 30-year-old academic and spokesperson for Expropriate Deutsche Wohnen & Co., told Insider.

Legal Battle Between Landlords and Tenants

The referendum also faces a stiff legal battle. Lawmakers in Berlin previously attempted to institute a “rent freeze” in February 2020 to help many young people in the city afford housing. The law capped rents for five years, but Germany’s highest court ruled in April 2021 that the law is unconstitutional.  

“Since the federal legislature has laws… regulating rental prices, there is no room for the states to legislate,” the ruling said.

Jakob Hans Hien, a real estate lawyer in Berlin, told DW.com that he believes an expropriation law would be at odds with the laws in Berlin.

“Compensation ‘well below the market value’ would be unconstitutional,” he said. “Otherwise, the companies would not only be deprived of their property but would also suffer direct economic damage. The state must not enrich itself through expropriation.”

However, others see the referendum as a “watershed moment” for tenant rights advocates across the globe.

Alexander Vasudevan, an associate professor in human geography at the University of Oxford, described the referendum as both “a potent reminder of the absence of meaningful housing alternatives” and a highlight of what grassroots organizations can accomplish.

“It highlights the role that ordinary tenants – and grassroots organizing – can play in developing policies for affordable housing while supporting communities increasingly at risk of displacement. It can be a catalyst for municipal housing movements across Europe,” he wrote.

How You Can Help

Now is not the time to be silent about homelessness, as many of our neighbors face the threat of eviction daily. According to data from the Census Bureau, more than 8.2 million households report being likely to leave their home within the next two months because of an eviction.

You must contact your local leaders and tell them you support providing legal protections for renters facing eviction. Tell them you also support studying ways local governments can create and preserve affordable housing for future generations.


Robert Davis

Robert Davis

Robert is a freelance journalist based in Colorado who covers housing, police, and local government.

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