Locals complain of high rents, and block plans to build more homes
Sarah-lena knust, a mild-mannered young pr consultant, is an unlikely radical. But finding a place to live in Germany’s booming capital tests the hardiest soul. Since moving to Berlin last year Ms Knust has twice struggled to find affordable housing. The last flat-viewing she attended attracted 30 rivals. The place she eventually found will suck up nearly half her income. “I knew it would be hard,” she sighs. “But I didn’t think it would be like this.”
Such tales are familiar in a city where the days of paying next to nothing for cavernous apartments are long gone. That is why tens of thousands of Berliners, including Ms Knust, have lent their names to a radical proposal: to expropriate private housing. The campaign, launched at a “rent insanity” protest in Berlin on April 6th, is gathering signatures to force a citywide vote on whether to oblige companies that own over 3,000 properties to sell them to the city. It relies on a novel interpretation of a constitutional provision that allows private assets to be “transferred to public ownership”. Views vary on whether that will pass muster in the courts, but over half of Berliners back the plan, in a city where 85% rent. Firms owning almost 250,000 properties, around 15% of Berlin’s housing stock, would be affected. Deutsche Wohnen (dw), the biggest, has become the symbolic target of the measure.
Germany’s big cities remain cheap by European standards, but several have experienced dramatic rent increases in the past decade (see map). Tight regulation, including a “rent brake” law in 2015, has failed to satisfy tenants. Almost half of big-city voters say they struggle to find affordable housing. Harald Simons at Leipzig University says the problem is rooted in city planners’ failure in the 2000s to predict population growth. Fifteen years ago Berlin had 150,000 empty flats and the city was demolishing public housing. Municipalities planned for demographic decline. But then came waves of immigrants and young Germans attracted by thriving job markets. Cities exploded—280,000 moved to Berlin in the past six years—and construction fell behind. Last year the Hans Böckler Foundation found that 77 German cities lack 1.9m affordable apartments. “We must build, build and build,” says Mr Simons.
Construction has speeded up, but it can still take between eight and ten years from zoning decisions to completion. Nimbyism is one problem; in 2014 Berliners voted against a proposed housing scheme on the Tempelhof Feld, a former airport now used for sunbathing and skating. In some cities land sits idle as investors wait for its value to appreciate. Labour shortages in the construction sector add to the problem, and rent brakes also discourage new building.
Helge Peters, a spokesman for the expropriation campaign, says that supply and demand mismatches do not capture the story. In 2004, after a banking crash, Berlin sold off much of its public housing at fire-sale prices. These properties were acquired by listed companies like dw, which channelled funds from institutional investors fleeing lacklustre bond markets. Such firms squeeze poor tenants so they can pay higher dividends, claims Mr Peters, resulting in “targeted social displacement”. Tenants say large landlords delay maintenance while circumventing rent caps by charging for unwanted “modernisation”.
For all that, sceptics wonder if the cost of expropriation—which the city’s Senate (government) puts at between €26bn and €36bn ($29bn-41bn), and campaigners say could be as low as €7bn—is justified in debt-laden Berlin. The plan would not lower rents or increase housing supply, says Philip Grosse, cfo of Deutsche Wohnen. He wants politicians to show some backbone. But Berlin’s Senate, a coalition of Social Democrats (spd), Greens and the hard left, is split. Many hope to forestall the proposal by buying up private housing and tightening regulation. Some in the spd urge a five-year rent freeze. Many national politicians share Mr Grosse’s assessment that expropriation would turn Berlin into a “no-man’s-land” for private capital. For many Berliners, that is precisely the point.