Residents of Berlin on Sunday, September 26, were able not only to vote in the elections to the German Bundestag and the City Senate, but also to express their attitude to the prospect of seizing hundreds of thousands of apartments from large housing concerns and transferring them to the ownership of the state, or rather, local authorities.
In a referendum, unique for Germany, such a proposal was approved by 56.4% of the voters, about 39% of the participants were against. Since the initiative was supported by more than a quarter of all Berliners eligible to vote, the city senate must now start developing a relevant law. Does this mean that the expropriation of housing from large concerns in the city is now only a matter of time? DW understood the current legal and political situation.
Overpriced housing prices in Berlin
The discussion about the admissibility of the nationalization of housing causes a huge resonance in the press and in German society. Some observers see this as a dangerous tendency to resort to purely socialist methods of the times of the GDR, while others perceive what is happening as a natural reaction of society to the sharply aggravating problem of the shortage of affordable housing, which politicians have not yet been able to solve by other means.
Housing prices in Berlin seem unaffordable to many
The situation on the real estate market in Berlin is really difficult. According to experts, even people with average earnings today can hardly find an apartment in the German capital. According to the organizers of the referendum, this problem should be solved by expropriation, which will affect companies that own more than 3,000 apartments. In Berlin, this is primarily the Deutsche Wohnen AG.
Specifically, this means the prospect of transferring 240 thousand residential premises to the disposal of the city authorities, which is about 15 percent of the market for rented apartments in Berlin.
The price of expropriation
It is already clear that the compensation that the city authorities will have to pay to the concerns in the event of the confiscation of their housing will be measured in billions of euros, and its final amount has not yet been announced.
Many Berliners are unhappy with high rent prices
According to the Berlin authorities, it will be between 29 and 36 billion euros. In turn, the organizers of the expropriation referendum claim that from 7.3 to 13.7 billion euros will be enough for these purposes. At the same time, they offer to pay the companies-owners with bonds, which will be repaid within 40 years from rental income.
The results of the referendum, however, are not binding on politicians. After all, Berliners voted not for a specific law, which should now be adopted, but only for the idea of such a law.
Arguments of supporters of the nationalization of housing
Supporters of the initiative “Deutsche Wohnen and Co. enteignen” refer to Article 15 of the Basic Law of the Federal Republic of Germany, which states the following: regulating the types and amounts of compensation “.
Deutsche Wohnen headquarters in Berlin
However, many lawyers consider the expropriation of housing in Berlin to be at least a controversial step. Jakob Hans Hien, a lawyer at the real estate law firm Knauthe, expressed doubts to DW that the expropriation law would eventually be passed by the Berlin Senate. According to the expert, the provision that the expropriation will affect only concerns and entrepreneurs, which own more than 3,000 housing units, has no objective justification.
In addition, it would be unconstitutional to pay compensation below market value, as it would mean direct economic losses for the companies that own it, Hin said. According to the lawyer, the Berlin authorities are using the results of the referendum, rather, to get concessions from the concerns, and not really pass the relevant law.
What Berlin politicians say about the prospect of expropriation
Franziska Giffey, who, thanks to the victory of the Social Democratic Party of Germany (SPD) in the elections to the Berlin Senate, is likely to become the first female mayor of the German capital, commented on the results of the plebiscite with restraint. “Such a bill should be developed. However, it will need to be checked for compliance with the Basic Law of the Federal Republic of Germany,” the politician said on September 27 on the air of the public-legal radio company RBB. Berlin cannot afford to receive another negative response from the Constitutional Court, Giffay added, implying an April 2021 ruling that the rent limitation that Berlin attempted to impose was unconstitutional.
Earlier, Giffay stated that she considered the very concept of expropriation as a “red line” and that she “would not want to live in a city that sends a signal that this is possible in it.”
And there is no doubt that the bill on the nationalization of housing will go to the judges’ table in Karlsruhe. Already today, supporters and opponents of this initiative have expert assessments of lawyers with directly opposite conclusions.
Opponents of expropriation point out that it will not only “turn upside down” the real estate market in the German capital, but also scare off potential construction investors. “What investor would think of building in Berlin if the expropriation is actually carried out? The seizure of property from real estate companies will not lead to the appearance of a single new apartment. Moreover, it will make the market absolutely unattractive, especially if the offer is accepted. initiative group of citizens to reduce the rent to 4.04 euros per square meter, “- writes the German economic online publication Wirtschaftswoche.
In general, it can be said that the prospect of the adoption of the relevant law by the Berlin Senate entirely depends on the composition of the new government of this federal state of the FRG. The SPD, the Christian Democratic Union (CDU), the Free Democratic Party (FDP) and the populist Alternative for Germany (AfD) oppose expropriation. The Left Party is unconditionally in favor, and the Greens consider this measure “the last acceptable step.”
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