Berlin authorities exhibit sympathetic stance towards expropriation advocates' campaign
Berlin - The newly appointed Senator for Urban Development and Housing in Berlin, Sebastian Scheel (Left), has expressed understanding for the citizens' initiative aiming to expropriate large private housing companies in the capital. "I don't advocate for state-run housing," Scheel told "Die Welt" on Monday. "However, it's legitimate to question whether rental apartments should prioritize capital market interests, meaning whether shareholders are being served with rental income," he added, emphasizing his point as a Left politician.
The Berlin initiative, "Deutsche Wohnen & Co enteignen," unveiled a citizens' petition last week, which has been approved by the Berlin administration for the voting process. The public shall vote on an appeal urging the Senate to create an expropriation law for companies owning over 3,000 apartments in the summer of 2021. Scheel suggested that "the housing market in a city like Berlin should be partially managed publicly or cooperatively." He considered Vienna as an exemplary model, where 40% of the housing market is controlled communally, cooperatively, or non-profit. Scheel also recalled Germany's past: "Interestingly, in the old Federal Republic, during Helmut Kohl's era, the percentage of price-controlled, public, or community-oriented housing was far above 50%," he said.
Scheel also expressed support for the so-called rent cap, which comes into effect from November. "We found that access to the housing market for various income groups was heavily restricted, so we had to intervene," Scheel stated. The rent cap is intended to buy time until the housing supply increases again. "Currently, we have around 20,000 building permits for apartments per year. Last year, we built 19,000 apartments—as many as in over 20 years," outlined Scheel. "We are now reaching limits, not all areas can be developed quickly and easily."
The proposal to expropriate large private housing companies in Berlin has sparked intense public and political debate but faces legal, procedural, and political hurdles. The German constitution protects the fundamental right to property, permitting expropriation only for public interest, under pertinent law, with appropriate cause, and with compensation based on the market value at the time of expropriation[1]. Municipalities, including Berlin, can expropriate real estate only as a last resort for purposes under the Federal Building Code, particularly for designated development areas[1]. However, the large-scale expropriation of private housing companies for social housing has yet to materialize and is deemed politically and legally complex.
Vienna's housing market is recognized internationally for its robust system of social and cooperative housing, with around 60% of residents living in municipally-owned, cooperative, or subsidized rental housing. Like Vienna, Berlin's approach is geared towards addressing market failures, but the methods—expropriation versus sustained public investment and regulation—differ significantly. While Vienna invests in and manages a significant portion of the housing stock and extensively regulates private rentals to ensure affordability for large segments of the population[4], Berlin's legal framework allows for expropriation under strict conditions, but practical application for large-scale private housing companies remains untested.
The Senator for Urban Development and Housing in Berlin, Sebastian Scheel, suggested that the housing market in Berlin, particularly in light of the growing initiative to expropriate large private housing companies, should be partially managed publicly or cooperatively, following the example of Vienna, where 40% of the housing market is communally, cooperatively, or non-profit controlled. However, the proposal for large-scale expropriation of private housing companies in Berlin faces challenges, as it must meet legal, procedural, and political hurdles while adhering to the German constitution's protection of property rights.
