Berlin divided over expropriating real estate firms amid housing crisis

Berlin is grappling with a chronic housing shortage and escalating rents, making the potential expropriation of major real estate firms a highly polarizing issue in the current election campaign. While some see this as a viable solution to the long-standing problem, others warn of socialist policies and economic decline. Many Berliners have lost faith in the possibility of change, but the question remains: could expropriation offer a solution?

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Expropriations cost billions that we do not have.

The debate is expected to intensify following the September 20th election for the House of Representatives. Opponents, such as Berlin's Governing Mayor Kai Wegner of the CDU, have consistently spoken out against the plans. "Expropriations cost billions that we do not have," Wegner warned, adding that they "prevent housing that we urgently need" and that the mere discussion is already hindering investments in housing construction. Stefan Evers, the new CDU lead candidate aiming to succeed Wegner, echoed this sentiment, calling the "populist call for mass expropriations" a recipe for making the problem worse. Bavarian Minister-President Markus Söder (CSU) has even dismissed the idea as a "Schnapsidee" (a foolish idea) and pure socialism.

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They prevent housing that we urgently need.

The initiative "Deutsche Wohnen & Co. enteignen" brought the issue to public attention and successfully organized a unique referendum in September 2021. Approximately 56% of voters supported the call to expropriate, or more accurately, socialize, for compensation, real estate companies owning more than 3,000 apartments in Berlin. This move, based on Article 15 of the German Basic Law, aims to transfer these properties into public ownership. The initiative argues that new housing construction is insufficient to curb rent increases, attributing the problem primarily to the profit motives of publicly traded real estate companies.

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The populist call for mass expropriations leads only to the problem becoming ever larger.

Their hope is that by reducing the significant role of these companies in the housing market, the upward trend in rents can be halted. However, little has materialized from the referendum in the past five years. The referendum was not legally binding for the state government because the initiative did not present a concrete legislative proposal for a vote. Consequently, the then-red-green-red Senate merely established an expert commission. This commission presented its final report in June 2023, concluding that the socialization of large housing companies in Berlin is legally feasible and does not contradict the principle of equal treatment, even for companies above a certain size.

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The populist call for mass expropriations leads only to the problem becoming ever larger.