Berlin’s avant-garde and working-class reputation have been on the wane over the last decade, as an influx of private equity and federal funding have transformed Germany’s capital city into a premier tourist destination and commercial center. The ground zero of this seismic shift in urban character is the city’s real estate market, where prices have nearly doubled from 2007 to 2019. Now, in a potential countermove, local activists have collected more than 343,000 signatures for a public referendum that, if passed, could force the acquisition of properties from large landlords to the city government.
There are a number of factors that render Berlin particularly susceptible to outrage regarding rising housing costs. Chiefly, as Archinect reported, over 80 percent of the city’s nearly 4 million residents are tenants rather than homeowners, placing them directly in the crosshairs of rampant real estate speculation. And the referendum follows the federal judicial overturning of the city’s proposed rent freeze that would have lasted until 2025, making drastic action more important than ever.
The referendum, known as Deutsche Wohnen und Co. Enteignen, purportedly has no intent to strong-arm small or even moderately-sized landlords. Their attention is focused exclusively on corporations with more than 3,000 apartments within the city, such as Deutsche Wohnen und Co. (after whom the referendum is named) who own approximately 111,000 rental apartments across the capital. If passed, a newly created public housing agency will be in the management of more than 240,000 homes.
As expected, the real estate lobby is none too pleased with the potential (compensated) seizure of its assets. In a statement reported by Bloomberg, a spokeswoman for mega-landlord Vonovia criticized the referendum as failing to address the underlying housing shortage in the city which, in their view, requires the leadership of private interests. To that end, Vonovia has offered to buy out competitor Deutsche Wohnen in a $23 billion deal that would see approximately 20,000 units sold to Berlin’s government, the construction of nearly 15,000 new apartments, and the implementation of new rent controls. Opposition to the referendum is also found within the city government among politicians who are not particularly enthused with the challenges of such a herculean undertaking.
While it is slightly more difficult to envision such a referendum occurring stateside, the ever-rising proportion of renter-occupied households is sure to instigate further calls for tenant protection—all the more likely after a year that featured a temporary eviction ban and fundamental reevaluations of public housing.
The referendum is scheduled for September 26th, which is the same day as national and local elections.