As of: 27.09.2021 12:50 p.m.
A majority of Berliners voted in a referendum to socialize private housing groups – although SPD top candidate and election winner Franziska Giffey does not want that. How does it go from here?
It seems paradoxical: In a referendum yesterday, a majority of Berliners (56.3 percent) spoke out in favor of expropriating large housing companies. Nevertheless, investors at Vonovia, the largest German housing company, are relieved today. The share rose by over four percent and was by far the biggest winner in the DAX, the leading index of the Frankfurt Stock Exchange.
Apparently the investors assume that the expropriation plans are de facto off the table. Because Franziska Giffey, the top candidate of the Berlin SPD and with 21.4 percent of the votes winner of the election to the Berlin House of Representatives, is considered to be an opponent of the initiative. “We do not solve a problem through expropriation and we are sending out a very difficult signal,” she said the day before the election. “I don’t want to live in a city that sends the signal that people are expropriated here.”
The aim of the “Deutsche Wohnen & Co. expropriate” campaign is to bring together all housing companies with more than 3000 apartments in order to stop rent increases. The Deutsche Wohnen Group would be particularly affected. 113,000 of its 155,000 apartments are in Berlin. However, the competitor Vonovia is currently in the process of taking over Deutsche Wohnen – in the meantime it has secured the majority of the shares. In addition, the housing companies Akelius, Covivio, TAG Immobilien and Grand City Properties would also be affected by expropriation plans. According to experts, it is about a dozen companies with around 243,000 apartments.
Giffey approves bill
The referendum for the upcoming Berlin Senate is not legally binding. Nevertheless, the vote is seen as a strong signal that the new city government cannot ignore. The outcome of the referendum shows that many Berliners want a housing market oriented towards the common good instead of a profit-oriented one, said Wibke Werner, deputy managing director of the Berlin tenants’ association, the “Berliner Morgenpost”.
Franziska Giffey, probably the next governing mayor of Berlin, announced a draft law in the morning. However, she restricted the ARD morning magazine one that one must first legally examine whether the law can then also be implemented. And she added: “I still believe that expropriations do not help to create even a single apartment and also to solve the big question of affordable housing. We now have a referendum that has clearly come out. We must respect this result and handle it responsibly, “said Giffey.
Alternative proposal from the Greens
The Green top candidate Bettina Jarasch also called for the result to be taken seriously. However, there are “still many legal and practical questions to be clarified”. As an alternative, Jarasch promoted the concept of a “rental protection umbrella”, a voluntary pact between politicians, landlords and other parties involved. “The housing companies have that in their hands,” she said.
Vonovia boss Rolf Buch was ready to talk. “Vonovia is ready to tackle the challenges on the Berlin housing market with a new state government and the relevant social actors in the city,” said Buch am Morgen. Expropriations did not solve the problems on the Berlin housing market. More constructive solutions are needed.
Unconstitutional and too expensive?
According to the constitutional lawyer Ulrich Battis, a law on the expropriation of housing groups would be unconstitutional. He could “predict with certainty that it will be cashed by the Federal Constitutional Court,” said Battis when presenting an opinion last week. Above all, the principle of proportionality suggests that such an approach will fail in court.
In addition, the socialization of apartments contradicts the principle of equal treatment, because only companies with more than 3,000 apartments are to be expropriated. It is also questionable whether the state is entitled to regulate questions of tenancy law.
Battis does not see that it would be possible to take over the apartments in the hands of the state at particularly low prices, as the initiative claims. According to current jurisprudence, real compensation must be paid, even if the full value may not be claimed. The legal scholar assumes that the expropriation plans would cost up to 40 billion euros – money that the Berlin Senate does not have and that must be raised through new loans, which will further increase the already high mountain of debt, according to Battis.
Initiative does not want to give up
The initiators of the referendum are assuming lower costs because they want to compensate companies well below market value. According to their presentation, the costs are between 10 and 11 billion euros. The expropriation initiative announced that it would now intensively accompany the upcoming coalition negotiations in Berlin. “We accept neither strategies to hold back, nor attempts to intercept them. Disregarding the referendum would be a political scandal,” says Kalle Kunkel, spokesman for the initiative. “We will not give up until the socialization of housing groups has been implemented.”
After the election to the House of Representatives, a continuation of the previous red-green-red alliance, a coalition of the SPD, Greens and CDU or red-black-yellow would be theoretically possible. Giffey has announced talks with all possible coalition partners.