Berlin’s Pledge to Socialize a Quarter Million Apartments Faces Obstruction

Just over a year ago, Berliners won one of the biggest victories in decades for tenants in large cities. On September 26, 2021, in a landslide victory, locals voted overwhelmingly in favor of a referendum that called for the drafting of a new law to socialize almost a quarter of a million apartments in the city. Such a law would clear the way for the largest expropriation of housing in post-unification Germany — a significant step forward in the global fight against vampire real estate and the large private companies and wealthy investors that have gobbled up housing stock and maintained a death grip on rent prices throughout the world. The passage of the referendum was a rare victory and a lesson to many tenant activists that, through organization and education, they can fight back — and win.

The fight, however, is far from over. In fact, the protracted battle to enact the housing socialization policy Berlin residents voted on in 2021 has also been an object lesson to the world on how fiercely these large landlords, property companies, and real estate investors will fight to keep their power. The Berlin Senate has not yet passed a law to enact the referendum’s stated goals, instead appointing an expert commission to study expropriation’s legality and feasibility. But this February, thanks to an impending election that can only be described as bizarre, Berliners will have a chance to recall many of the very officials who have prevented the passage of an expropriation law, giving hope to many tenants that they will be able to speed up the process of socialization.

“Best case is that everyone who is being supported by the real estate lobby is replaced by people who hopefully have more distance to that and aren’t in contact with the real estate lobby,” said Conny Hoss, an activist with Deutsche Wohnen Enteignen [Expropriate Deutsche Wohnen] (DWE), the campaign that got the referendum passed in 2021. Throughout their campaign, DWE organizers have consistently stressed that this is by no means a niche or insignificant issue: the future of all residents in Germany’s capital (and largest) city is at stake.

Berlin has long been considered a Mecca of sorts for young people throughout Europe (and beyond) to converge, with its colorful, graffiti-lined streets often filled with artists, techno enthusiasts, and radicals. While the city’s image may be tied to this bustling youth culture, though, it’s Berlin’s relatively low cost of living that has drawn people from all walks of life. The city has also, partly for the same reason, maintained a large immigrant population — on any given day riding the U Bahn from Alexanderplatz to Kotbusser Tor, one might hear people speaking German, English, Polish, Vietnamese, Arabic, Russian, or Turkish. In fact, the city hosts the largest Turkish community outside of Turkey, with generations of families settled there after taking advantage of generous guest-worker policies in what used to be East Germany. Refugees and asylees have settled in Berlin for decades, with the recent Ukrainian arrivals joining many other refugee communities, including Syrians and the largest Palestinian community outside of the Middle East.

But Berlin’s reputation for being a vibrant, diverse, and working-class city has deteriorated as ever-increasing rent prices and lack of housing stock make it increasingly more difficult for lower-income Berliners to afford to live in the city. Gentrification of entire neighborhoods within the city’s “ring” (the informal name for the neighborhoods contained within the route network of SBahn trains that encircle the city) has accelerated the process by which new, richer residents are moving into traditionally working-class neighborhoods — oftentimes Turkish and Arabic neighborhoods, like Neukölln, Moabit, and Kreuzberg — pushing out long-standing residents.

Even Berlin’s famous squats — unsanctioned living spaces that were typically occupied by anarchists or other non-conformists who wanted to live independently of the capitalist society around them — are being squeezed out. Many of these squats were able to subsist by securing some kind of legal status, often through long-term leases offered in the 1990s. But that status, and the squats themselves, has been disappearing. In recent years, occupants at several squats have been violently evicted from the places they’ve lived for decades as real estate speculators have closed in, salivating over their prime locations.

It gets worse: the crushing of the city’s spirit has been enhanced by rising gas and electric bills due to the energy crisis in Germany. Germany previously relied on Russia for approximately 50% of its energy needs, a supply that has been essentially cut off due to the war in Ukraine. It’s likely that this year’s mild winter throughout Europe has been the primary reason gas shortages and rolling electrical blackouts haven’t occurred so far. The inflation rate in Germany has also put a crunch on residents, with prices of consumer goods rising almost 8% last year.

In the midst of these cascading crises, Berlin will host on February 12 one of the strangest elections in recent memory. The polls will be open for a “redo” of the September 26, 2021, election for the Berlin Senate. The 2021 election, which saw the moderate Social Democratic Party (SPD) garner the most votes and marked the inauguration of Fransiska Giffey as mayor, was declared invalid by the Berlin Constitutional Court on November 16, 2022, and will now be held again.

The 2021 election was plagued with many irregularities, including missing ballots, voters being turned away, and long lines. This was all compounded by the fact that the Berlin Marathon, one of the largest events to take place in the city, when many streets and public transportation routes close down, was held on the same day. The federal election, which took place concurrently, may also be redone for the same reasons, but there has been no ruling yet on that from the Federal Constitutional Court.

The one measure on that fateful 2021 ballot that has not been subject to challenge, however, is the referendum to expropriate and socialize units owned by Berlin’s largest landlords, which, again, passed by an overwhelming margin. The referendum called for the Berlin Senate to draft a law that would socialize properties owned by real estate companies with over 3,000 flats in the city (around 240,000 apartments). The referendum garnered 59.1% of the votes in the city, making a clear statement that Berliners not only want the rent to come down, but they believe that taking properties out of the hands of private, profit-seeking entities is the way to do it.

“Because the referendum was won in such a landslide, it is the only democratic decision that is not under suspicion of being wrongfully done,” said Thomas*, an activist with DWE, who spoke at a January demonstration about the redo election in Berlin’s Gesundbrunnen neighborhood. But Thomas believes that the election is still very important, especially when it comes to dealing with the Berlin Senate’s obstruction of efforts to implement the policies needed to turn the referendum into a reality. “The election doesn’t directly impact us but it obviously does indirectly,” Thomas told TRNN. “So our campaign is now under the motto ‘Die Immobilien-Lobby abwählen,’ which would translate to ‘The lobbyists of the housing market should be recalled.’”

One of the main talking points deployed by opponents of the housing expropriation measure is that such a measure would not actually help with the goal of creating new affordable housing stock in the city. However, a new report from Rosa Luxemburg Stiftung questions the merit of this claim. Matthias Bernt, a researcher at the Leibniz Institute for Spatial Social Research who co-authored the report, explained the report’s findings to TRNN: “What we did is nothing else but to calculate the difference between the rents that are demanded by the financialized housing companies and the rents that are demanded by the municipal housing companies,” said Bernt. “[We found] an average difference of €1.24 per square meter, and since we also have figures about the average size of flats for these landlords, we can also say how much it would be average per month and per flat, which then leads us to a sum between €44.67 [lower a month] for Deutsche Wohnen [owned flats] and €189.24 [lower a month] for Heimstaden [owned flats].” In sum, rent rates for comparably sized apartments in Berlin are significantly lower for tenants living in socialized housing than for tenants living in units owned by private landlords.

Moreover, contra the objections from critics of the referendum, Bernt argues that socialization would also be the best device for increasing housing stock for those eligible for social housing: following the regulations around municipally owned housing, these newly socialized flats would increase the amount of available rental units by almost 7,000 a year, which is more than current plans to construct new rental units in the city would provide. “It wouldn’t completely solve the problem but it would be a major step ahead,” said Bernt. “That step would be way bigger than with new constructions the Senate voted for. Because, at the moment, the plan is to have 4,000 affordable new housing units a year, but we never actually met this figure in the past couple of years. Last year I think zero new social housing units were built.”

Around 50% of Berlin residents currently qualify for social housing, but the number of available units has dropped from 315,000 in 1991 to about 110,000 units now. Bernt doesn’t believe that it is possible to solve this problem through building new properties alone. “The inner city neighborhoods — they are all densely built,” Bernt told TRNN. “So there is no chance to achieve adequate numbers of new social housing and new construction simply because there is no space to build new social housing. It would [also] cost very inflated prices to buy up stock.”

Between this study’s findings detailing the clear benefits of socialization, the referendum showing that a sizable majority of residents support such a measure, and the Berlin Senate’s own expert commission issuing an interim report finding it legally possible to translate the referendum into concrete policy, many residents are confused by Mayor Giffey’s decision to firmly oppose expropriation, going so far as to say on January 16 that supporting expropriation would be against her conscience. German Chancellor Olaf Scholz recently backed Giffey, his fellow party member, calling the implementation of the referendum “irresponsible.”

“I find [this] bizarre… The government has mandated an expert’s commission to find out about the opportunities and ways to implement this,” said Bernt. “I find it bizarre [for politicians] to say, ‘Well, I mean, no matter what the referendum was, no matter what the expert’s commission says, I’m not going to do it because I don’t like it.’ That’s really anti-democratic for me.”

With the impending election, many supporters of the referendum are concerned about the possibility of the SPD and Giffey holding onto their spots, or possibly even making a coalition government with the conservative Christian Democratic Union (CDU) or the libertarian Free Democratic Party (FDP), both of which are on the record as not supporting housing socialization. Fears of a more conservative government defying the will of voters are compounded by the fact that a third of Berlin residents are ineligible to vote in the election. Unsurprisingly, these ineligible voters are mainly immigrants and young people. All of this, sadly, is causing a sense of resignation and hopelessness to set in for some. “I think with Fransiska Giffey in the office of mayor the referendum is probably never going to be fulfilled,” Hoss told TRNN.

Recent polling has shown the CDU making electoral gains (perhaps due in part to the racist press coverage of some minor fireworks-related arrests over the New Years holiday in Berlin, which led to a prominent CDU politician suggesting we look at the “phenotypes” of those arrested). The Greens, led by mayoral candidate Bettina Jarasch, who supports expropriation (but has expressed contradictory perspectives on how it should be implemented), are currently polling ahead of the SPD as well.

Even if the CDU garners a plurality of votes, it is still likely that the coalition of Die Linke (the Left Party), the Greens, and the SPD will stay intact. But many members of the SPD, and some Greens, have shown hesitancy in supporting expropriation. To apply political pressure, DWE is targeting individual candidates and has launched a site that lists every candidate’s stance on the referendum. They are also mobilizing their over 3,000 volunteers throughout the city to explain the importance of voting in the redo election.

Even if they are not successful in removing Giffey and having more people in the Senate who support expropriation, DWE considers the campaign far from over. If no movement is taken by the Senate on socialization, they plan on launching another referendum, this time with a specific law attached. “We will still keep the leading parties on their toes and we will still confront them with the will of the people; we will still remind them that the housing prices are too high, especially now,” said Thomas. Whatever happens, there is no doubt that both tenant activists and real estate investors around the world will be watching Berlin closely.