Rent dispute in berlin: cover and expropriate

On Friday, the signatures of the petition for a referendum "Expropriate Deutsche Wohnen" will be handed over. The Berlin Senate counters with a rent cap.

For weaker sharks and stronger nemos Photo: dpa

End of March in a large law firm across the street from the Federal Ministry of Justice. Ulrich Battis, formerly a constitutional law professor at Humboldt University, now a lawyer, has issued an invitation to speak on the subject of the "Volksbegehren Deutsche Wohnen & Co expropriation" referendum. The real estate industry has come, architects, engineers, representatives of the Senate administrations. Battis explains why the expropriations are legally permissible, but will not happen: They are simply too expensive. Cost estimates assume up to more than 30 billion euros in compensation.

Since April, activists in Berlin have been collecting signatures for a petition for a referendum. The aim is to expropriate all companies that own more than 3,000 apartments in Berlin. In addition to Deutsche Wohnen, this would affect other listed landlords such as Vonovia and Akelius. In recent years, Berlin has become a target for large housing corporations that are counting on rising rents and using all legal means to do so.

After Battis, representatives of the Senate Chancellery and the real estate lobby will speak. "Does the Senate Chancellery have any insights into who is running this petition for a referendum?" someone in the audience asks, referring to previous initiatives. "Isn’t it always the same 100 to 200 people?" The representative of the Senate Chancellery replies: Of course, he says, one knows who is behind the petition for a referendum. But if, according to a survey, 54 percent of Berliners support the expropriation of Deutsche Wohnen, that should be taken seriously.

The event yields three insights: At least parts of the real estate lobby do not know their opponents – which means they have not taken them seriously so far. There is not a single word of self-criticism from the industry, no "We have understood." And finally, here too, as with many commentators from the CDU/CSU and FDP, the fear of socialism is going around. The expropriation of apartments is only the beginning, then other sectors of the economy will follow, they say from the audience.

Night shift for activists

On Friday, the initiators of the petition for a referendum will hand over their signatures. According to information from the taz, between 50,0,000 Berliners had signed on Thursday. However, the activists still had to work a night shift to take into account the signatures received from numerous collection points. One thing is certain: the hurdle of the first stage of 20,000 signatures has been easily cleared. The Senate is now considering whether to adopt the petition. If it rejects the petition, 170,000 signatures are needed in the second stage for a referendum to be held.

The Left Party joined the referendum early on, and the Green Party’s state committee declared its support in May. The SPD is still undecided. A state party conference will vote in October 2019. Party leftists, including Juso leader Kevin Kuhnert, are in favor, while governing mayor Michael Muller is against it.

For the latter, the referendum comes at a delicate time. Red-red-green Berlin is currently testing a new coalition model. For decades, the "Koch-Kellner" principle applied in Germany: The large coalition partner determined the main line, the smaller one got a few wishes fulfilled. After the last parliamentary elections, however, the SPD, the Greens and the Left Party were almost on an equal footing. The SPD now stands at 15 percent in the polls, behind the Greens and the Left. The national trend is as much to blame for this as a colorless Michael Muller. If the Greens or the Left Party let the coalition collapse over the housing issue, Muller will be finished.

The owners’ association "Haus und Grund" called on its members to raise rents until June 17

While Berlin’s Left and Green parties distanced themselves early on from their housing policies of the noughties when they advocated the sale of state-owned apartments, the SPD took longer. Only under the pressure of the impending referendum did it come up with an almost revolutionary idea in terms of housing policy at the end of 2018: since federal laws do not adequately protect tenants, the state of Berlin could adopt its own rent cap. A resourceful lawyer, an employee of a Senate administration, had dug up the regulatory loophole in his spare time – the Social Democrats gratefully made the cap their cause.

Last week, Katrin Lompscher, the Left Party Senator for Urban Development, presented key points for such a rent cap. According to it, existing rents are to be frozen for five years, new construction is exempt. The law is not to come into force until January 2020, but will apply retroactively to June 18, 2019. On this day, the Senate wants to decide on the key points for the rent cap. The owners’ association "Haus und Grund" therefore called on its members to still increase rents until June 17.

Even in the debate on capped rents, no sympathy was heard from the real estate industry for the tenants’ side. This has contributed significantly to the escalation of the political situation in Berlin. Although rents in Berlin have been rising much faster than incomes for years, little more can be heard from the real estate industry than the mantra: more must be built.

The catch of the rent cap: Courts will decide whether a state law regulation is permissible. It will probably be years before a decision is reached. That’s why tenant activists are pleading not to back the rent cap unilaterally. Even the duration is not enough for many: "The rent cap only provides security for five years," says Michael Prutz of the petition for a referendum "Deutsche Wohnen & Co. expropriate".

But the legal proceedings on expropriation are also likely to drag on for years. In the end, the Berlin tenants’ movement could be left empty-handed – or have become the model for a nationwide rent policy.

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