The city is seriously considering proposals to seize apartments from landlords to resolve its housing crisis. Is it an extreme throwback to its communist days, or a bold move that could offer a solution to other European cities?
Sunset on a summer’s day in Tempelhofer Feld, the former central Berlin airport that’s been turned into a sprawling park. Amid lounging hipsters, dog walkers and skateboarders, an earnest, bespectacled young man, carrying a clipboard, approaches a group sitting on the dry grass.
He animatedly explains why he’d like them to sign his petition. The beer drinkers demur. But there’s no disappointment on the young man’s face as he departs. “It’s often like that around here,” he says happily, as he heads toward the next group of Berliners. “They’ve already signed.”
The signature hunter is part of Expropriate Deutsche Wohnen & Co, a group campaigning to take apartments away from Berlin’s biggest landlords and give them to local councils. They want city authorities to buy hundreds of thousands of apartments from some of Germany’s largest businesses and flip them from a profit-making commodity into a “communal good”.
To force Berlin’s city-state government to consider this, the group want to hold a public referendum on September 26, alongside city and federal elections. To hold such a vote, they needed 175,000 signatures in favour by June 25. By the time they handed in their list, the campaigners had 343,591. Those need to checked and verified, but the referendum now seems on.
The company the campaigners are targeting, Deutsche Wohnen, is one of the city’s biggest landlords. Having purchased about 66,000 publicly owned flats from the authorities in 2004, the business now has close to 160,000 properties worth around 26 billion euros.
Three-quarters of these are in Berlin.
This means that if the expropriation campaign achieves its penultimate aim, Deutsche Wohnen, currently a blue-chip stock-exchange listed company, may cease to exist.
But Deutsche Wohnen is not the only target. Any landlords with more than 3,000 apartments are also in the campaign’s sights.
All this sounds like a neo-liberal’s worst socialist nightmare. Local realtors have already criticised the campaign as a throwback to the bad old East German days, when the communist government owned all the property and all the taps leaked. Local politicians from centrist parties have described the idea as leading to the “financial ruin of the city”.
“It’s really breaking a taboo, and will only scare investors and businesses,” Michael Voigtländer, a real estate analyst at the German Economic Institute in Cologne, told local financial newspaper, Handelsblatt. “International onlookers are incredulous, observing this debate.”
So how realistic is this allegedly extremist experiment in housing activism? There are certain factors that might make it possible in Berlin, says Thomas McGath, a spokesperson for the Expropriate Deutsche Wohnen & Co campaign.
“The city is unique in Germany because of its composition and its political history,” he suggests. “And there’s a lot of dissatisfaction around rental politics here, a lot of anger, which gives this campaign impetus.
“We believe the referendum will have an effect on local politicians and that they will eventually have to act upon some version of what we are proposing.”
More than 85% of the city’s homes are rented – that is compared with about 50% in London and 60% in Paris – so a lot of local voters have a strong motivation to rein in rising housing costs.
Berlin is also the only capital city in all Europe where the GDP-per-capita is lower inside the city, than outside. In other words, most capital cities are home to the wealthiest individuals and companies.
Rents are still more affordable in Berlin than in other European capitals.
At the end of 2019, you could rent a furnished one-bedroom apartment for around 1,700 euros a month in Paris or London. In Berlin, it only cost 1,140 euros.
However since 2009 rents have risen much faster here: as much as 99% in some of the city’s trendiest neighbourhoods.
Additionally the city’s left wing government supports the idea. “In our [German] Constitution, we have the right to property,” Katina Schubert, a member of the Berlin state parliament and co-leader of the Left party, told Die Zeit, recently. “But the Constitution also says that with property, comes responsibility.
In Berlin, we’ve reached a point where the latter aspect is no longer properly respected.”
Nobody yet knows if the expropriation campaign’s referendum will ultimately be successful. The most recent surveys suggest 47% of the city’s population supports it. But 44% don’t and around 10% remained undecided. Certainly people are thinking about it. A June poll found the topic of most concern to Berliners was housing and rent (47%), followed by transport and traffic (35%), then climate change (11%).
Worries about housing are shared by many other Europeans in the continent’s cities, as well as further afield. According to United Nations’ forecasts, 68% of the world’s population will live in urban areas by 2050.
In Europe, it’s already 74% and likely to rise to around 84% by 2050. At the same time, there are also housing shortages in major centres as well as rents and house prices often rising faster than incomes.
All this makes the debate about “who owns the city?” an international one. The pandemic and its attendants – unemployment, homelessness, different working conditions in inner cities and more focus on local community life – are only firing this discussion further.
So no matter what happens next in Berlin, many of those involved in the Berlin expropriation campaign are happy this has become a talking point, both here and abroad. “A lot of cities are under the same pressure in the same areas,” says Andrej Holm, an urban sociologist studying housing and gentrification at Berlin’s Humboldt University.
“They see how international capital is wrecking the renting landscape. So other cities see this kind of thing, they are interested in any new mechanism, and they wonder, ‘maybe we can do this here too?’ I have colleagues in London, New York and Barcelona, among other cities, who are discussing what is happening here.”
“Of course, legal systems and circumstances are obviously different everywhere,” Holm added. “But when a new instrument turns up, the possibilities are worth exploring.”
For example, he says, the German capital’s previous attempt at a rent cap – seen as another bold or wacky experiment, depending on your point of view – had a direct impact on Barcelona, where the city authorities enacted their own version. The Berlin rent cap was overturned by the German supreme court in April this year and the same may yet happen in Spain, Holm noted.
The trend went the opposite way with Barcelona’s crackdown on Airbnb landlords. After the Spanish city all but outlawed such holiday rentals, other cities followed suit.
Christine Whitehead, a professor of housing economics at the London School of Economics, isn’t so sure expropriating property is the solution to urban housing problems and she certainly doesn’t think the idea will catch on in Britain.
“People care a lot about property rights. A lot,” she argues. “And anyway,
I’m not sure that the state would be able to do a better job of managing housing than commercial landlords. It would also probably mean the end of international investment in Berlin. And I’m not sure Berlin can afford to stay outside of the real world like that.”
There is one thing she does agree with Holm and the expropriation campaigners on though. “It is useful to have a debate,” she concurs.
According to everyone involved, from sociologists, urban planners and economists to tenancy rights activists, at the heart of that debate is how you see housing: Is it home? A human right? Or is it a commodity? Real estate investment? “Five years ago in Berlin, if somebody had said we are going to take private property away, that would have been a taboo subject,” Holm said. “But now, even the conservative media are discussing it.
They say it’s too complicated, it’s too expensive, it’s not a good solution and what about the investors? But they’re discussing it. And there’s a change in the discourse about how we understand housing,” he concludes. “What was once unimaginable has become imaginable.”