Berlin Referendum to Sell Private Flats to the City

Berliners are to vote on a referendum to force major property companies to sell thousands of flats to the city, as the election-year issue of high rents heats up. A grassroots petition campaign fuelled by anger over surging housing costs submitted 183,711 valid signat

BY Realty Plus
Published - Saturday, 03 Jul, 2021

Berlin Referendum to Sell Private Flats to the City

Berliners are to vote on a referendum to force major property companies to sell thousands of flats to the city, as the election-year issue of high rents heats up. A grassroots petition campaign fuelled by anger over surging housing costs submitted 183,711 valid signatures, "more than the total required" of around 172,000 to put the question to a general ballot, the Berlin election supervisor said. Local officials must now set a date for the vote, which is widely expected to be held on September 26, the same day as elections for a new federal parliament and Berlin government. The “Expropriate Deutsche Wohnen & Co." initiative, named after Berlin's biggest property group, targets companies with more than 3,000 apartments in their portfolios. The movement would like to see more than 240,000 homes placed under a public agency to be administered "democratically, transparently and in the public interest". The outcome of the referendum is not binding but it would significantly ratchet up pressure on the government to take action. In a city of 3.7 million residents where more than 80 percent rent their homes, the capital's attractiveness to investors and structural lack of housing sent prices soaring by nearly 85 percent between 2007 and 2019. Berlin's city-state government already moved to freeze rents for five years from 2020 to halt runaway gentrification, but the federal constitutional court ruled that policy to be illegal in April. "Expropriate Deutsche Wohnen & Co." bases its claims on Article 15 of the German constitution, which stipulates that "land, natural resources, and means of production may be transferred to public ownership" in the public interest in return for compensation. Adopted in 1949 with the founding of the West German state, the article was long forgotten during the Cold War with its tensions between capitalist West and communist East. Deutsche Wohnen owns around 111,000 of an estimated two million rental apartments in Berlin and in May announced plans to merge with fellow real estate giant Vonovia. It sharply criticised the initiative's aims as counterproductive because it doesn't create a single square metre of additional living space. We need to build more housing to ease the market pressure that is why we will be stepping up the building in the coming years in Berlin. The city's Social Democratic mayor Michael Mueller has also rejected the referendum, preferring "partnerships with the private sector" to develop more housing.