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Demonstrators in Berlin (archive picture)
Photo: Stefan Boness / IMAGO / IPON
With a clear yes, the people of Berlin supported the initiative »expropriate Deutsche Wohnen & Co«.
56.4 percent of voters voted in favor, 39 percent against.
Specifically, the project, which is so far unique in Germany, involves companies with more than 3,000 apartments in Berlin, provided they have an "intention to make a profit".
These are to be socialized, i.e. expropriated against compensation and transferred to an institution under public law.
Around 240,000 apartments would be affected, around 15 percent of Berlin's rental housing stock.
When the result became apparent on Sunday evening, activists of the initiative celebrated exuberantly.
People lay in each other's arms.
Some lit flares, others waved purple and yellow flags.
Videos on the initiative's Instagram account show it.
But will there really be expropriations?
Or is the party mood of the activists premature?
Answers to the most important questions.
Does the Berlin Senate now have to initiate expropriations?
No.
Since the referendum does not contain any concrete law or a constitutional amendment, the result is not binding.
The then red-red-green state government also disregarded the referendum on the continued operation of Tegel Airport, which found a majority in 2017.
Franziska Giffey, the SPD's top candidate in Berlin, confirmed her negative stance this Monday.
"I am still of the opinion that expropriations do not help to create even a single new apartment and also to solve the big question of affordable housing," she says on ARD.
Are the Berliners really in favor of expropriation?
A survey by the opinion research institute Civey on behalf of the association “New Paths for Berlin” showed in the run-up to the referendum that only 23 percent of those surveyed consider expropriations to be a suitable instrument for improving the situation for tenants and those looking for accommodation in Berlin.
68 percent consider the construction of affordable apartments to be the best tool.
Such survey results could indicate that many people are more critical of expropriations than the current vote suggests.
Many people may have taken the opportunity to vent their anger at rising rents.
Would expropriations even be feasible?
There are serious doubts about this.
The “Deutsche Wohnen & Co. expropriate” initiative refers to Article 15 of the Basic Law, which provides that “land, natural resources and means of production” can be transferred to common property.
However, the article has never been used in the history of the Federal Republic.
And the implementation should only be possible if the desired common good cannot be achieved in another - less drastic - way.
For example, the living space problem could also be solved with more residential construction.
Another catch: In contrast to the Basic Law, the constitution of Berlin does not provide for any socialization at all.
Experts deduce from this that the legal protective barriers against an attack on property in Berlin are even higher.
Constitutional lawyer Ulrich Battis had also determined for the association "New Paths for Berlin", which is closely related to the real estate industry, that expropriations would violate the principle of equality, because only housing stocks above 3000 apartments should be socialized.
All of these legal pitfalls suggest that implementation could result in years of litigation.
SPD top candidate Giffey has already warned: Berlin should not get another negative judgment from the Federal Constitutional Court.
In the spring, the Berlin rent cap from the red-red-green government was spectacularly collected there.
What would the expropriations cost?
The assessments of this vary considerably.
The purchase agreement concluded in mid-September between the two large housing groups Vonovia and Deutsche Wohnen with the City of Berlin for 14,750 apartments provides an initial indication of the costs.
The purchase price for this was just under 2.5 billion euros with an average square meter price of 2400 euros.
Another indication could be the current market value of Deutsche Wohnen: The group, which owns more than 155,000 apartments throughout Germany, has a company valuation of 20 billion euros.
Since around 240,000 apartments would be affected by an expropriation, the total amount of compensation for all corporations might even exceed this.
In September 2020, the Berlin Senate calculated pure compensation costs between 28.8 and 36 billion euros.
That would be more than the entire annual budget of Berlin.
The initiative “expropriate Deutsche Wohnen & Co.”, on the other hand, expects costs of 7.3 to 13.7 billion euros, because the companies concerned can be compensated “well below market value”.
Their model is to use loans or bonds to pay the real estate companies.
According to the plans, an institution under public law should issue the securities - practically bypassing the budget.
The repayment installments and interest costs are to be paid from the rental income.
However, if the compensation is below market value, lawsuits from the corporations are to be expected.
What will politics do now?
It is already considered impossible that the rulers will simply ignore the referendum.
The resentment of the population would be immense.
On Monday, Giffey announced a bill.
But she restricted: "We have to look very carefully at what is possible."
Green top candidate Bettina Jarasch has already announced that she wants to include the issue in the coalition negotiations.
Politicians have to check whether an implementation of the citizens' vote is feasible.
"But there are still many legal and practical questions to be clarified for such a law."
The initiative “Expropriate Deutsche Wohnen & Co” intends to follow the upcoming coalition negotiations closely: “We do not accept delaying strategies or attempts to intercept them.
We all know tricks, ”warned Kalle Kunkel, a spokesman for the initiative.
"We won't give up until the socialization of housing corporations has been implemented."
The Berlin Left, which is the only party behind the initiative, is putting pressure: "You can't ignore it," said state chairwoman Katina Schubert of the dpa news agency about the vote.
“Now you have to get the very best lawyers to work to work out a law that works in a legally secure manner.
That is the mandate for the new Senate. "
What are the alternatives?
In the end, the rulers could also agree to solve the problem of rising rents in another way, so as not to get another gossip in front of the Federal Constitutional Court.
The Berlin Greens are calling for a tenant protection umbrella - a voluntary commitment for apartment owners to freeze rents for five years and commit themselves to the common good.
As part of the “Future and Social Pact Housing”, the two groups Vonovia and Deutsche Wohnen had already promised in spring that their regular rent increases over their Berlin portfolio would be increased to a maximum of one percent annually over the next three years and to compensate for inflation in the two following years to limit.
How are the companies reacting?
Investors reacted more than calmly this Monday.
Vonovia and Deutsche Wohnen share prices even rose slightly.
Probably on the one hand because it is unlikely that expropriations will actually occur.
On the other hand, the failure of a red-red-green federal government could speak in favor of a more moderate rent policy at the federal level.
Unimpressed by the result of the recent referendum on the expropriation of large housing groups, the real estate company Heimstaden from Sweden took over around 14,000 apartments in the capital from competitor Akelius.
The company is thus continuing its expansion course as planned.
Analysts expect the boom in Berlin to continue as the city develops into a global metropolis.
And compared to other major international cities, Berlin is still very cheap.
With material from dpa and Reuters
