It’s crunch time for the campaign to expropriate Deutsche Wohnen and other real estate giants. With Berliners set to vote in a referendum on September 26, the two sides make their 11th-hour pitches.
The “Yes’’ vote
“We have the chance to secure affordable housing for generations to come.” – Wouter Bernhardt
We have a historic chance as Berliners to fundamentally change who owns this city. Voting ‘yes’ means voting to bring 240,000 flats under the control of the half a million tenants who live there. Citizens from Amsterdam, London, Paris or Barcelona could only dream of getting an opportunity like Berlin has this September.
I don’t think it’s very difficult to see the destructive power that big investment companies and hedge funds like Deutsche Wohnen and Vonovia have on an already tense housing market when they buy up thousands upon thousands of Berlin flats. By dispossessing these large companies of their housing stock, we can secure affordable housing for generations to come.
If we have our way, this Vergesellschaftung won’t cost the city a penny. Compensation for the companies would be paid out of yearly rent revenues over a period of around 40 years. Think of it like taking out a mortgage, but for a quarter of a million houses.
We’re proposing €10 billion euros in compensation. This is based on a model that says: Let’s finally take affordable housing seriously – and that means rent can’t be more than 30 percent of your income. So, we calculated a rate of €4-4.50 per sqm based on the Berlin minimum wage as a way to protect people on low incomes and make sure they can afford a decent home in this city.
One figure for the possible compensation sum that critics love to quote is €36 billion, the upper limit of a cost estimation made by the Senate back in 2019. That’s what it could cost if we compensated the companies at full market price. However, the Grundgesetz clearly states that compensation should be fair to all parties involved – and the companies are just one part of that.
The state, the renters and society at large have a stake in this as well. So a purely market-oriented compensation figure is highly unlikely. (And let’s not forget: €10 billion euros is still a huge amount of money. These companies will profit anyway because they bought the apartments for peanuts in the late 1990s and early 2000s.)
The “No” vote
“If this goes through, we’re looking at a legal battle that will take years.” – Steffen Daniel Meyer
Protecting tenants is important to me and my party, Volt. Most of us are tenants ourselves. But of all the DWE supporters I’ve spoken to, not one could convince me that this isn’t a pretty risky gamble.
If this goes through, we’re looking at a legal battle that will take years – meaning years of uncertainty for renters. The initiative suggests compensating expropriated companies with just a third of the market value for flats. This is unrealistically cheap, according to the legal assessments I have read.
All of them say the price can be under but not significantly less than the market value. Even if the Constitutional Court lets that pass, which I don’t see happening, the case will then end up at the European Court of Human Rights, which would decide whether the compensation is ‘appropriate’. Is one third appropriate? I don’t think so. When the rent cap was overturned by the Constitutional Court earlier this year, many people had to pay back a lot of money, and it would be even more after a long case like this one. I don’t think anyone should be speculating with housing – politicians included.
Also, when you vote to expropriate Deutsche Wohnen, you vote to strip their investors of assets. And we’re not just talking ominous corporations here; we’re talking the state pension funds of Norwegian citizens and US police officers and firefighters. Granted, Black Rock is an investor, too – but you’re still definitely impacting smaller parties. You’re basically saying: “Your fundamental right to own property isn’t worth as much.” And that’s a slippery slope. You just can’t do that in a constitutional state.
Of course, I still understand people’s anger. The problem with housing though is that there is not one simple solution. The surge in rents is linked to decades-long developments so the root causes have to be repaired step by step. Rather than expropriating housing associations, we have to give tenants more power, by establishing an online guidance tool and free public advice centres to help them defend their rights.
We have to strengthen the non-profit housing sector like they did in Vienna, where public housing rents are controlled in order to lower the local comparative value of apartments.
We have to create a digital register of building records to speed up construction. And we have to make better use of the measures already available to us, like expanding the so-called Milieuschutzgebiete (social conservation areas), where district governments have the option to buy properties before private companies do and have more power to protect renters.
Before voting in the referendum, citizens in this city should really take a close look at the arguments. Politics is complex and the easiest solutions aren’t always the best ones. The DWE side might be saying, “If you oppose this, you’re an evil capitalist!” But it’s just not that black and white.