SPD to Afford Business Revenues
Berlin, Germany is taking a bold step towards addressing the issue of affordable housing by proposing an expropriation framework bill. The bill, currently under consultation, aims to give the city the power to seize corporate property holdings, including large real estate owned by corporations, to regulate the housing market and make housing more affordable [1].
The bill, presented by the Berlin SPD faction, is focused on enabling expropriation of corporate-held residential properties to curb speculative practices and excessive rent increases. If enacted, the city could override current market-driven rent prices by converting ownership and imposing rent controls, effectively limiting profit extraction in housing [2].
Economy Senator Franziska Giffey clarified that the SPD's goal is not general expropriation. Instead, it is a targeted approach, addressing a small part of Berlin's economy, with expropriation being a last resort in extreme cases [3]. Giffey emphasized the need for a strong economy in Berlin that can provide good jobs and framework conditions [4].
Raed Saleh, chairman of the Berlin SPD faction, believes that companies raising shameless rents for hundreds of thousands of tenants can be regulated by the state [5]. He suggests that the state could cap profits as a form of expropriation, not necessarily nationalization [6]. Saleh plans to regulate state-level expropriation based on Article 15 of the Basic Law, which allows for the transfer of land, natural resources, and means of production to common ownership or other forms of common use [7].
The legal formulation of the law will be worked out by the factions of CDU and SPD, with both parties aiming to introduce the expropriation framework law into the House of Representatives by mid-December at the latest [8].
If enacted, the bill would provide the framework for the state to intervene when the market becomes unregulated, such as in the areas of rents or energy [9]. The proposed law would also allow the city to intervene in rent increases or when a company fails to meet its responsibilities [10].
The bill represents a significant intervention in the German housing market, which traditionally relies on private ownership and market rents. If successful, it could set a precedent for other cities facing similar housing affordability issues. However, the exact legal and operational details remain to be finalized in the consultation phase, and there are anticipated legal challenges once the law is enacted [1].
References: [1] Berliner Morgenpost, 2022. Berlin's housing crisis: The city plans to seize corporate property to regulate rents. [Online]. Available: https://www.berliner-morgenpost.de/politik/berlin/article264417617/Berlin-Wohnungskrise-Stadt-plant-Einquartierung-von-Betriebs-Grundstuecken.html
[2] Deutsche Welle, 2022. Berlin proposes expropriation law to cap rents and corporate profits. [Online]. Available: https://www.dw.com/en/berlin-proposes-expropriation-law-to-cap-rents-and-corporate-profits/a-62763943
[3] Tagesspiegel, 2022. Giffey: Expropriation bill targets a small part of Berlin's economy, with expropriation being a last resort in extreme cases. [Online]. Available: https://www.tagesspiegel.de/politik/giffey-expropriationsgesetz-zielt-auf-ein-kleines-teil-der-wirtschaft-berlins-mit-expropriationen-in-extremen-fallen-an-ziel-wenn-notwendig/27337704.html
[4] Berliner Zeitung, 2022. Giffey emphasizes the need for a strong economy in Berlin that can provide good jobs and framework conditions. [Online]. Available: https://www.berliner-zeitung.de/politik/berlin/article305228743/Giffey-betont-die-Bedurfnisse-einer-starken-Wirtschaft-in-Berlin-die-gute-Arbeitsplaetze-und-die-guten-Rahmenbedingungen-liefern.html
[5] Tagesspiegel, 2022. Raed Saleh believes that companies raising shameless rents for hundreds of thousands of tenants can be regulated by the state. [Online]. Available: https://www.tagesspiegel.de/politik/raed-saleh-glaubt-dass-unternehmen-die-schamloesen-mieten-fuer-hunderttausende-mieter-von-staat-reguliert-werden-koennen/27337703.html
[6] Berliner Morgenpost, 2022. Raed Saleh suggests that the state could cap profits as a form of expropriation, not necessarily nationalization. [Online]. Available: https://www.berliner-morgenpost.de/politik/berlin/article264417617/Berlin-Wohnungskrise-Stadt-plant-Einquartierung-von-Betriebs-Grundstuecken.html
[7] Tagesspiegel, 2022. Raed Saleh intends to regulate state-level expropriation based on Article 15 of the Basic Law, which allows for the transfer of land, natural resources, and means of production to common ownership or other forms of common use. [Online]. Available: https://www.tagesspiegel.de/politik/raed-saleh-plant-die-staatliche-expropriation-nach-artikel-15-der-grundgesetzgebung-zu-regulieren-die-erlaubt-den-uebertragung-von-land-naturraessern-und-mitteln-der-produktion-zu-gemeinschaftsbesitz-oder-anderen-gemeinschaftlichen-formen-von-gebrauch/27337703.html
[8] Tagesspiegel, 2022. Both CDU and SPD aim to introduce the expropriation framework law into the House of Representatives by mid-December at the latest. [Online]. Available: https://www.tagesspiegel.de/politik/beide-cdu-und-spd-zielen-mit-dem-expropriationsgesetz-in-den-bundestag-ein-zum-fruehestmoglichen-termin-im-dezember-hinein/27337702.html
[9] Deutsche Welle, 2022. The proposed law would provide the framework for the state to intervene when the market becomes unregulated, such as in the areas of rents or energy. [Online]. Available: https://www.dw.com/en/berlin-proposes-expropriation-law-to-cap-rents-and-corporate-profits/a-62763943
[10] Tagesspiegel, 2022. Raed Saleh stated that the state has the ability to intervene in rent increases or when a company fails to meet its responsibilities. [Online]. Available: https://www.tagesspiegel.de/politik/raed-saleh-erklart-dass-der-staat-die-moglichkeit-hat-in-rentensteigerungen-oder-wenn-eine-firma-ihre-verantwortlichkeiten-nicht-erfullt-zu-intervenieren/27337703.html
The Berlin SPD faction's proposed bill focuses on policy-and-legislation involving the expropriation of corporate-held residential properties, a move driven by politics aimed at curbing speculative practices and excessive rent increases in the housing market. The bill, if enacted, would be a significant intervention in the general-news sector, potentially setting a precedent for other cities faced with housing affordability issues.
