Berlin's election winner wants 240,000 flats in public hands
Berlin's Left party won the city election on Sunday 20 September with 25.7 percent, ahead of the CDU on 18.8 percent. Its lead candidate says bringing large housing companies into public ownership will be at the centre of coalition talks.
Elif Eralp, 45, wants to become Berlin's governing mayor. She says she will not compromise on the policy. It rests on a referendum in 2021, in which a majority voted to transfer into public ownership, against compensation, every property company owning more than 3,000 flats in the city. That referendum was not legally binding.
The scale is large. Around eight companies would be affected, among them Vonovia, Adler Group, Covivio and Heimstaden. Estimates of how many flats would change hands run from more than 200,000 to about 243,000. The Berlin court of audit works with roughly 240,000 flats at a market value of 40 to 42 billion euros. Housing in public hands would rise from about 20 percent of the city's stock to more than 30 percent. Tenants of city-owned landlords already pay noticeably less on average than tenants of private ones.
What is not settled is the compensation. Eralp has spoken of 8 to 18 billion euros, far below market value. The court of audit is critical of that, saying compensation far below market value would depart sharply from existing case law. The city government of 2021 costed compensation at 29 to 36 billion euros. Courts will almost certainly decide the final figure.
Three things have to happen before any of this is real. The Left needs the SPD and the Greens in a coalition: the Greens are open to the policy, while the SPD lead candidate has said he does not expect it to work. Then a law has to pass the city parliament. Then the affected companies will go to court.
There is a federal obstacle as well. The chancellor said on Monday 21 September that the government will quickly pass a federal law banning the expropriation of housing. Constitutional lawyers question whether the federal level has the competence to do that, and point out that socialisation is permitted in principle under article 15 of the Basic Law. That dispute would end at the federal constitutional court.
For anyone renting in Berlin, nothing changes in the short term. Rents, contracts and landlords stay exactly as they are while coalition talks run, and a concrete implementation plan is not expected before spring 2027.