Berlin set to hold referendum on banning big landlords and nationalising private rented housing

Berlin looks set to hold a referendum on banning big landlords and expropriating their homes into social housing, as part of a response to growing complaints in the German capital about the cost of living.

The proposed law would bar landlords with more than 3,000 homes in their portfolio from operating in the city – including the city’s biggest property company, Deutsche Wohnen AG.

That real estate behemoth has become a favoured target of activists, who claim its business is an example of the kind of speculation which they blame for driving up rents and property values.

The expropriated homes – an estimated 200,000 would be covered – would effectively become the German equivalent of council housing, let out at social rents – in a bid to reduce the cost of living.

The city, which is its own state under Germany’s federal system, has a local constitution that provides for a system of binding ballot initiatives or Volksentscheid, which allow framework for holding referenda.

Though the initiative must first collect 20,000 signatures to make it into the ballot paper, it is likely to find them quickly, as opinion polls show a majority of voters back the plan.

The activists’ proposal has sparked extensive coverage in the German press, including legal debates about whether expropriation would be constitutional or not.

One of the activists behind the initiative told German newspaper Der Tagesspiegel that they had consulted with lawyers and constitutional experts and that the compensation for expropriations could be paid “well below the market value”.

They cite a legal precedent set by the expropriation of land in Hamburg after a 1962 flood – after which the Federal Constitutional Court ruled that the common good sometimes required property rights to be interfered with.

The left-wing Die Linke party supports the plan, as do some Greens and centre-left SPD representatives. The so-called red-red-green coalition in Berlin – made up of those three left-of-centre parties, has made building affordable housing a priority, and is also engaged in a more modest plan to buy up private housing of its own.

“In addition to the new building, we also want to see how we can make a good offer in the portfolio, and this is where municipalisation plays a role,” said Berlin's SPD mayor Michael Müller in his New Year press conference last month.

In 2017 property prices in Berlin grew faster than in any other major city around the globe at 20.5 per cent, according to a ranking published last year by estate agent Knight Frank. Rents are also increasing fast, despite the imposition of new laws to control them in 2015 – in a city used to affordable and plentiful housing.

The concerns about rising housing costs have spilled over into other areas. In October 2018 Google backed down from building a major office in the city’s Kreuzberg district in the face of widespread protests – whose participants worried that an influx of highly paid tech workers would make the city even more unaffordable.