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  • Red Flag: Six dumb arguments against nationalising housing

Politics

Red Flag: Six dumb arguments against nationalising housing

The campaign Deutsche Wohnen Enteignen is in full swing, but that hasn’t stopped Nathaniel Flakin from hearing some terrible takes about why the referendum won’t work.

Image for Red Flag: Six dumb arguments against nationalising housing

The campaign Deutsche Wohnen Enteignen is in full swing, but that hasn’t stopped Nathaniel Flakin from hearing some terrible takes about why the referendum won’t work. Photo: IMAGO / snapshot

All of Berlin is talking about Enteignung, or expropriation. The campaign Deutsche Wohnen Enteignen, which seeks to nationalise Berlin’s biggest private housing companies, launched two weeks ago. They need 175,000 signatures in the next four months — I’m told they got around 10% of that in just the first three days. This is not just due to the activists’ enthusiasm, as it turns out Berliners just really hate these big landlords.

The campaign in defence of Berlin’s Baumafia or “construction mafia” includes all the parties (SPD, Greens, CDU, AfD — everyone except The Left) and most of the press. But rents in Berlin have roughly doubled in the last 10 years, and there are more evictions than anywhere else in Germany. Most Berliners are renters. How do you convince them that it’s in their interest to hand over more and more of their income to realty speculators?

The right-wing tabloid B.Z. has argued that expropriating these Immobilienhaie or “realty sharks” would mean “abolishing democracy”. West Berlin used to have a huge public housing sector, and was nonetheless relatively democratic. Let’s look at seven slightly less dumb arguments against the campaign.

1. Expropriation won’t build a single new apartment

But Expropriation will provide funds for new housing. Deutsche Wohnen paid out €350 million in dividends last year — that means every single renter is paying €177 per month straight into the pockets of investors. Just look around: Do you see any new apartment buildings being constructed by Deutsche Wohnen or similar companies? Probably not: they focus on buying up existing housing and jacking up the rents. Public housing companies, in contrast, invest 27% of their income in construction. Do you want your rent going to Blackrock or toward building new housing?

2. It’s against the constitution

To quote Reverend Lovejoy, “Have you ever really read this thing?” Germany’s constitution contains some surprising passages — it was drafted in a radical time. Article 15 allows for “nationalisation” (or “socialisation”) of “land, natural resources and means of production” as long as its in the “public good.” You don’t have to be a constitutional scholar — it’s all right there in English translation.

3. It would cost too much

Berlin’s government, opposing the initiative, has said that expropriation will require compensation at a cost of €36 billion. But that would mean paying the speculators a fictitious “market value” — the amount they claim they could get if they sold everything at once. Article 15 says nothing about that. Quite the opposite: It says that compensation will be based on an “equitable balance between the public interest and the interests of those affected.”

What would that “balance” look like? The interests of those affected is, in their view, €36 billion. The interest of the public would be to pay them as little as possible — and the lowest possible amount is €1. Therefore compensation would need to be somewhere in the middle.

These companies bought up public housing stock when it was privatised in the early 2000s. They have let the properties rot for a decade or more. Should they really be allowed to double their money?

4. Do we want to live in state housing?

“State housing” conjures up images of brutalist architecture, leaky ceilings, and flickering neon lights. But studies show that renters in communal housing companies are consistently the most satisfied, while renters in private housing companies are consistently the least satisfied. And the campaign for expropriation is not about putting Berlin housing under the control of a ministry. Rather, the apartments should pass into communal housing companies run by elected boards of tenants.

5. Expropriation is against democratic rights.

Expropriations take place all the time in Berlin. Just look at that horrific scar cutting through Neukölln and Treptow, which is set to open in a few years as the A100 Autobahn. (That project is now set to cost €200,000 per meter, for a total of €650 million for 3.2 kilometers.)

What do you think happened to the houses that were in the way? That’s right, they were expropriated. Six households were expelled from a house in the Beermannstraße 20-22 in Treptow in 2015, for example, and the German federal government is refusing to pay them the compensation they were promised. Police came to evict protesters from an expropriated property at Neuköllnische Allee 33 in 2014.

The German state regularly expropriates forests in order to build highways. Whole villages are expropriated in order to create open-pit mines for lignite coal. So why is the property of multinational corporations holy?

The defenders of big business tell us that if the 100,000 apartments are taken away from Deutsche Wohnen, soon someone is going to be coming for your house, or your toothbrush. 

But the campaign is only about expropriating companies that own more than 3,000 units. Only a handful of companies in Berlin are known to be over this limit: Deutsche Wohnen, Vonovia, Akelius, ADO Properties, and probably the Pears Group (although they have divided up their properties in numerous shell companies). If you are reading this column, you are probably well under that limit.

6. Where will it end?

Who knows! No one is interested in expropriating individual houses. But what about big industrial concerns? Why should Germany’s biggest companies like BMW or Volkswagen be under the control of multibillionaires whose main qualification was to be a descendent of a descendent of some guy who worked on automobiles in the late 19th century?

It’s clear that our economy needs radical changes to cope with the worsening climate crisis, and the current owners of industry are not keeping up. Wouldn’t it make sense to put these vast companies employing millions of people and moving billions of euros under democratic control?

After we expropriate Deutsche Wohnen, why not move on to the Deutsche Bank? They were, after all, the main financers of Donald Trump. I wouldn’t mind having that company under democratic control either. But let’s start with the apartments first.