Berliners vote to socialize 200,000 rental properties in non-binding referendum

Expropriate Or Bust

Berliners vote to socialize 200,000 rental properties in non-binding referendum

A colorful apartment block in Berlin. (Loozrboy/Flickr/CC BY-SA 2.0)

In Berlin, a city where roughly 85 percent of the 3.6-million-some residents reside in rented housing, voters have approved a non-binding referendum that, if ever enacted, would move an estimated 226,000 rental properties from corporate ownership and into the hands of the city. Currently, a majority of apartments in the affordable housing-strapped German capital are owned by two major real estate rivals, Vonovia SE and Deutsche Wohnen SE.

As reported by Reuters, the votes were cast at the same time that Vonovia, the largest residential rental company in Germany, successfully secured an estimated 50.49 percent of Deutsche Wohnen shares, a threshold that would enable Vonovia to buy its main competitor, which owns upwards of 100,000 apartment units in Berlin. Earlier this month, the city’s two largest landlords announced plans to sell a small sliver of their combined Berlin rental empire, nearly 15,000 apartments per Reuters, to the city for 2.46 billion euros, a strategic maneuver meant to garner political and public support for the merger.

However, Berliners who showed up at the polls yesterday were not swayed by the move. Roughly 56 percent of Berlin voters cast their ballots in favor of the social housing measure, which would expropriate a lion’s share of the city’s rental apartments from Vonovia and Deutsche Wohnen—or just Vonovia if the corporate takeover is carried out as planned—along with any other privately-held company that owns 3,000 or more rental units in the city. As reported by Deutsche Welle, Pears Group and Sweden’s Heimstaden are two other major landlords that could potentially be impacted.

Thirty-nine percent of voters said “no” to the referendum, known as DW und Co. Enteignen (Expropriate Deutsche Wohnen and Co.).

The vote for the much-talked-about measure comes at a time when skyrocketing rents have led to an affordable housing crisis in bursting-at-the-seams Berlin, and coincided with Germany’s historic parliamentary election for the 20th Bundestag. The center-left Social Democratic Party (SDP), led by Olaf Scholz, narrowly beat out the party of outgoing Chancellor Angela Merkel, the centrist-right Christian Democratic Union, for control—but not full control—of the federal government. Scholz has pledged to form a three-way alliance, a so-called “social-ecological-liberal coalition,” between his party, the Green Party (the Greens), and the Free Democratic Party (FDP). Local elections were also held with the SDP maintaining power over the Berlin city government. The SDP’s Franziska Giffey is now poised to become the first female mayor of Germany’s most populous city.

“Ignoring the referendum would be a political scandal. We will not give up until the socialization of housing groups is implemented,” said Kalle Kunkel, a spokesman for the anti-gentrification, tenants’ rights-championing coalition behind the initiative, said in a statement shared by Reuters.

As mentioned, the referendum is not legally binding and faces substantial roadblocks in its path to realization despite being supported by a majority of Berlin voters. Most crucially, it has to be made law by the ruling parties of the Berlin Senate and, as noted by Deutsche Welle, the city’s coalition government is divided on the issue of expropriation: the Left Party (Die Linke) has come out in support of it and the prevailing SDP is staunchly opposed. The Greens has not made its position on the matter clear.

Giffey has previously spoken out against the seizing rental properties from landlords, saying that: “For me, the subject of expropriation is already a red line. I don’t want to live in a city that sends the signal: This is where expropriation is taking place.”

Per Reuters, Giffey reaffirmed her stance following the results of the election: “I am still of the opinion that expropriations do not help to create even a single new apartment or solve the big question of affordable housing,” she explained to German public broadcaster ARD, pledging to take on the city’s increasingly dire housing woes through other means. Once in office, Giffey, despite her own party’s opposition but per the wishes of Berlin voters, will draft a formal bill for the referendum, which must be found legal under German constitutional law. Opponents of the grassroots DW und Co. Enteignen movement have argued that it’s unlikely that the draft bill will be declared legal.

Still, fresh off a resounding victory at the polls, supporters of the referendum have vowed to fight on. “This result has given the issues of rents and housing a new importance in Berlin,” Bloomberg reported spokesperson Rouzbeh Taheri as saying. “No political party will be able to ignore that.”