By a Huge Margin, Berlin Votes to Expropriate Corporate Landlords

By a Huge Margin, Berlin Votes to Expropriate Corporate Landlords

By a Huge Margin, Berlin Votes to Expropriate Corporate Landlords

Though the referendum may not be legally binding, it has now made the lack of affordable housing politically impossible to ignore.

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Berlin—Sunday’s election results in Germany made one thing clear: Politics here is about to get a lot messier. After years of Merkel’s even-keeled, centrist reign atop a grand coalition of the center-right CDU and center-left SPD, the national election left the SPD scrambling to assemble a viable coalition on the left. But, while most international coverage either lamented Merkel’s departure or tried to make sense of the complex coalition negotiations confronting the SPD’s Olaf Scholz, another more stunning victory took place in Berlin. Following a years-long campaign by leftist activists, residents of the German capital voted to expropriate more than 240,000 privately owned apartments, in a referendum aimed at combating skyrocketing housing costs. The campaign, pointedly named “Deutsche Wohnen & Co Enteignen” (Expropriate Deutsche Wohnen and Co.), had defied negative polling, warnings from business leaders, and opposition from major political parties to win a decisive 56.4 percent to 39 percent victory in Berlin.

The mood at the campaign’s election night party at a former film studio complex in Tempelhof was exuberant. Growing from a core group of left-wing activists into a multigenerational and multiethnic coalition fed up with the City’s inability to rein in rising rents, the campaign had expected a nail-biter. Instead, as results trickled in from across the city it became clear that the measure not only passed, but won healthy majorities in 10 of Berlin’s 12 districts. How had this proposal, decried as radical, to expropriate mega-landlords succeeded in gaining such cross-cutting support?

The political math doesn’t add up. The measure, backed by the Left Party and only tepidly by the Greens, far outperformed either party’s level of support. While the DW Enteigen campaign may hope the victory indicates a deeper shift toward support for de-commodifying housing from speculative real estate markets, the timely campaign undoubtedly tapped brewing populist anger among Berliners whose average rents doubled in the past decade despite the city’s repeated policy attempts to keep costs down. The fact that roughly 85 percent of Berlin residents are renters–one of the highest rates in the world—attunes a broader swath of voters to an issue that in many cities is considered a more marginalized, working-class concern.

Yet, no matter whether voters’ choices were ideological statements or one-off protest votes, “there is a clear mandate” for action, as campaign spokesman Rouzbeh Taheri underscored at a press conference on Monday. “We can talk about the ‘how’ of socialization, but not about the whether.” Yet the actual implementation of the proposal will be left up to the incoming Berlin Senate and its newly elected Mayor Francisca Giffey, who vocally opposed the campaign in the run-up to Sunday’s vote along with her party, the center-left SPD.

DW Enteignen has already gone on the offensive. Following the upset victory for the expropriation proposal, Giffey acknowledged that “a draft law like this must now also be drawn up,” but qualified that “this draft must then also be examined under constitutional law.” In response, the campaign tweeted, “We’re not relying on #Giffey to respect the outcome of our referendum,” and called for continued grassroots pressure on the new mayor.

While the referendum is not legally binding, it is politically impossible to ignore. The results immediately pose problems for the SPD as it seeks to form a new government at the local level. The three constituent parties of the ruling Red-Red-Green coalition (SPD, The Left, and Greens) collectively earned more seats this week than last election, but the parties disagree sharply on the referendum proposal. Much like her counterpart Olaf Scholz at the national level, Giffey is noncommittal, opting to also talk with center-right opposition parties CDU and FDP in negotiations that could take months.

Beyond these political hurdles, any move by the City to expropriate apartments from Deutsche Wohnen & Co. or any other real estate company is sure to face extensive court challenges. The campaign unequivocally claims that the measure is legally sound based on Article 15 of the German Constitution stating: “Land…may be transferred to public ownership…for the purpose of socialization.” Yet this clause has never been invoked, and the Federal Constitutional Court’s repeal of Berlin’s most recent attempt to regulate the market through the “Mietendeckel” (rent cap) law still leaves a bad taste in the mouths of many local policy-makers.

In the meantime, as actual implementation of the mandate stalls in the courts and Senate chambers, rents will continue to rise and displacement will continue. Critics of the referendum often highlight one major problem: Expropriation would not create a single new apartment in Berlin. Instead, by segmenting off more apartments from the market, competition for the remaining privately held units increases, creating a two-tier system between public and private housing in terms of price and access. The campaign counters that such supply-oriented criticism is disingenuous since private real estate companies haven’t been delivering the new construction they promise, especially affordable units. “The business model of Deutsche Wohnen & Co consists in buying up existing apartments and raising the rent,” the campaign website argues. In contrast, “through socialization, a large, common-interest oriented housing company will come into being,” building new public housing while holding down rental prices in their existing stock.

At the jubilant election party on Sunday, the intricacies of such policy debates seemed far off. An unexpected victory for working-class interests had prevailed at the ballot box thanks in no small part to the efficient, purple-and-yellow organizing machine the activists here had built over the past three years. Attendees let off yellow smoke bombs while chanting “Deutsche und Wohnen Enteignen!” to the tune of “Seven Nation Army.” Colin Murphey, an American transplant and member of the popular DW Enteignen cheerleading team performing that night, considers the campaign “one of the most professional grassroots campaigns I’ve seen in my life by a long shot,” joking that “Bernie could never” hope to match such organizing success. While the history and political landscape of Berlin are unique, the referendum’s consequences are potentially far-reaching, inspiring housing activists globally with evidence that socializing housing is democratically possible and popular. Like successful ballot initiatives to expand Medicaid under Obamacare in deep-red states in America, there may well be more progressive opinions lurking under the surface of party politics here—if people are given the chance to express them.

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