Two decades after a cash-strapped Berlin government sold off huge chunks of its social housing stock, the city has presented draft legislation to expropriate corporate landlords.
The move is a delayed response to a successful citywide referendum in 2021, when almost 58 per cent of Berliners backed a grassroots proposal to force landlords with more than 3,000 flats, to sell their holdings to the city.
The main focus of the vote was Deutsche Wohnen, a listed company with 110,000 flats in the city, though other companies would also be affected.
Back in 2021, Berlin’s then city-state government campaigned against a proposal it said would cost the taxpayer billions without creating much-needed new housing.
RM Block
After the successful vote, city politicians set up a commission to explore the legal concerns. In its final report, the commission said there were none: such an expropriation, while novel, is most likely covered by Article 15 of the Basic Law, postwar Germany’s constitution.
This article, never before used, states that “land, natural resources and means of production may, for the purpose of socialisation, be transferred to public ownership or other forms of public enterprise by a law that determines the nature and extent of compensation”.
Such a drastic step could only be justified, the expert commission said, in a city with a housing crisis of tight supply and spiralling rents – a description which fits the German capital.
Average rents are now rising by 15 per cent year-on-year and running at around €15 per square metre, meaning a 100sq m (1076sq ft) apartment costs €1,500 for rent alone, without running costs.
Property agents say Berlin’s real rental prices in many popular areas start at one third above the average.
Some four years after the referendum, the centre-left Social Democratic Party (SPD), now junior coalition partner in Berlin’s city-state government, has presented a draft bill which proposes taking under state control “elementary areas of public services”. This need not stop at property: in recent years Berlin has bought the water provider and other utilities privatised 20 years ago in the same budgetary crisis that prompted the social housing sell-off.
While the SPD see their draft proposal as responding to the referendum, allowing property owners sell up or accept public representatives at board level, the proposal has infuriated their centre-right Christian Democratic Union (CDU) coalition partners.
One senior CDU official told Berlin’s Tagesspiegel newspaper the SPD had “lost the plot completely”.
Of particular concern to the business-friendly CDU is a clause suggesting housing and other public goods can and should be bought back at “below-market rates”.
The SPD argues that lower prices are legally justifiable “given the structural change in the property system in favour of public use”.
In response, the CDU Berlin’s general secretary Ottilie Klein summoned up the memory of Berlin’s pre-war communist-fascist street battles and postwar property seizures in socialist East Berlin, warning: “If there is one thing Berlin doesn’t need, then it’s expropriations and class warfare.”
The draft proposal will now go for consultations with a view to a final agreement early in 2026, with legal challenges likely as soon as any bill becomes law.
On another front in the cost of living crisis. Berlin’s state government has confirmed it is “discussing and examining extensively” new regulations to outlaw the long-term rental of furnished apartments.
Such dwellings are excluded from regular rental controls, which stipulate that a new rent may not diverge more than 10 per cent above average local rents.
“Loopholes in tenancy law are being exploited for fixed-term and furnished rentals,” said a government spokesman, explaining the move “and exorbitant sums are being demanded”.
