DWE
Voters in the city of Berlin are to be faced with a second referendum on the issue of socialising its largest housing companies. The Berlin initiative "Deutsche Wohnen & Co. Enteignen" has announced that this time around, the vote will be binding and encapsulated in law, if it receives approval from at least a quarter of citizens entitled to vote.
Earlier this year an expert commission appointed by the Berlin Senate (government) presented ruling mayor Kai Wegner (CDU) with its final report concluding that the socialisation of large housing companies (those owning at least 3,000 apartment units) was both legally permissible and appropriate. The state does have legislative competence.
About a dozen companies with a total of more than 240,000 rental apartments would be affected by a socialisation or expropriation. Listed company Deutsche Wohnen alone, which is the target of the initiative, has a stock of about 116,000 flats in the Berlin area. Since the campaign against the company started some years ago, it has been taken over by larger rival Vonovia. In local elections in September 2021, a majority (59%) voted to pass the referendum in favour of expropriation. The expert commission subsequently appointed by the Berlin coalition government approved the legitimacy of the initiative in general, paving the way to this second referendum.
The issue of compensation for those companies possible expropriated has always been thorny, with wildly different estimates of the value of the housing stock to the city, and/or the compunction to pay anything close to a market price. Agreement on this matter alone will be difficult, if not impossible, to achieve. The Senate's own estimate suggests that expropriating property owners would require compensation of up to €36bn. The campaigners want to pay a lot less, claiming there would be no requirement to pay the current market value. Some of the campaign's leaders have claimed that even a symbolic sum of €1 would be enough.
Since the start of the campaign the political winds have changed, with the ruling CDU party traditionally averse to anything that reminds them too much of the collectivist zeal that characterised the old SED leadership in pre-unification East Berlin.
In essence, the campaigners for expropriation believe that the referendum’s radical demand is supported by Germany’s 1949 constitution, the Basic Law, which specifies that “land, natural resources and means of production” may be transferred to “public ownership,” in other words, nationalized. However, this is the first time the law has actually been applied in practice.
Still, even if this latest petition for a binding referendum is successful, there's no guarantee that landlords will subsequently be actually expropriated. Berlin governments have in the past simply ignored results of referendums, such as the majority vote to keep Tegel Airport open, and just refused to ratify them in a law.
This time around, the referendum to expropriate in Berlin enjoys broader support than merely among its natural hard-left constituency, given the ongoing housing shortage and a tradition of low, affordable rents in a city where renters make up 90% of the population.
