Jennifer Sizeland on Berlin’s fight to expropriate monopoly landlords…
Berlin’s expropriation vote back in September, to re-socialise some of the housing that has been sold off to corporate landlord monopolies, was historic not only for Berlin and Germany but also the world.
The vote, which took the shape of a city-wide referendum, came about as Berliners grew increasingly frustrated by a few large property owners—Deutsche Wohnen & Co, Vonovia, the Pears Group, Heimstaden, Akelius—buying up available housing that was sold off by the state to fund other projects, and which inevitably led to an increase in rents around the city that effectively priced renters out of its (innercity) boundaries.
Given Berlin’s house prices are some of the fastest rising in the world, it’s not surprising that the referendum gained so much attention, being largely regarded as a beacon of hope in terms of the possibility of taking on profit-driven cartels as well as fighting for renters’ rights. But the referendum has gained interest outside of Germany too, due to its potential to set a precedent for other cities with the same, often more intensified, problem.
Excitingly, the ballot returned a majority in 10 of Berlin’s 12 districts, with 56% of voters in total in favour of it, compared to 39% against, meaning it received more votes than any single political party in the general election. But—and it’s a bit but—the referendum is not binding, meaning that the fight is far from over for those who want housing back in the public domain.
Those who own the housing stock in Berlin, and other powerful companies and individuals with vested financial and political interests, inevitably want to retain the income and power that comes with such monopolies—especially as they might be offered market value or less for their properties if the result is honoured.
Several factors led up to the referendum. First, Germany is famously a country of renters, with over half of its residents renting their properties, making it the second-highest rate in the OECD (Organisation for Economic Co-operation and Development). Wages in Berlin are not as high as might be expected for a capital city either, falling below the German average and coming in 11th out of the 16 states.
There is also the issue that the majority of Berlin’s large landlords are modernising buildings to increase their value but undertaking fewer repairs than public housing companies, according to an investigation by the Rosa Luxembourg Foundation. A final impetus for the referendum came from the ruling to overturn the Mietendeckel (rent cap) law by the German Constitutional Court (Bundesverfassungsgericht); it was deemed unconstitutional and therefore effectively illegal, so the decision was reversed by the court, which is the highest authority in Germany.
If the expropriation is passed it would mean more than 240,000 apartments ending up back in the public domain and managed by the government with accordingly cheaper rents. The company that would be the most affected by the vote is Deutsche Wohnen, who currently own 100,000 properties—nearly half of those proposed in the buyback.
The situation is further complicated by the announcement on the same day as the vote results by Germany’s large residential rental company Vonovia, that it had reached the required threshold to purchase Deutsche Wohnen with the majority voting rights. The merger went through in October and created a property behemoth of over 550,000 apartments. The expropriation result did not concern shareholders as the acquisition disclosure actually increased their share value at the time. In contrast, smaller corporate landlord Akelius made the decision to sell some of its city property portfolio, including 14,000 in Berlin, although it was not clear if this was related to the campaign.
Prior to the vote (and the subsequent national election), the Berlin senate announced that it would be buying 14,750 apartments from Deutsche Wohnen and Vonovia for 2.46 billion euros. This would bring their portfolio of publicly-owned housing to around 355,000 or approximately a fifth of the city’s property to bridge the gap. This wasn’t, however, enough for campaigners since the condition of the properties was worse than before privatisation, and they were bought at market value.
The lobby group behind the vote, Expropriate Deutsche Wohnen & Co. was formed in 2018. “There were several groups fighting against rising rents and unscrupulous landlords in Berlin before which joined our efforts,” explains campaigner Felix. “Many of them already participated in the organisation of an earlier referendum, the ‘Mietenvolksentscheid’ (rent referendum) in 2015. Nearly everyone in this city has either personally had their fair share of bad experiences with corporate housing companies or at least has heard some stories from family and friends.”
Part of the group’s argument is that the apartments in question were previously owned by the state of Berlin before they were sold to corporate landlords. Germany sold off its public housing in order to ‘clean up’ its finances during a time of fiscal trouble, using the money raised by selling to corporate landlords. In Berlin, more than 200,000 of its flats were sold to pr…