Voters in Berlin not only re-elected a Social Democratic-Green-Left coalition government but also voted for a non-binding referendum that calls for the Berlin government to purchase at a fair market value some 243,000 apartments owned mainly by two German companies, Vonovia and Deutsche Wohnen SE. The cost of purchasing the rental units is estimated to be some $45 billion. Housing costs have skyrocketed in the German capital as German real estate companies continue to charge tenants usurious rents.
By a 56.4 percent majority, Berliners voted for the “Disappropriate Deutsche Wohnen & Co.” measure that the corporate media in Europe and the United States is referring to as “expropriation,” “seizure,” and “nationalization.” Neither term is correct as the referendum calls for government compensation to the global corporate landlords (GCLs). The government takeover proposal would affect only 15 percent of the apartment units in Berlin.
In Berlin, 85 percent of the residents are renters and many are being forced out of the city as rents have been increased by the corporate duopoly. In some parts of Berlin rents increased by 146 percent over a ten-year period. One of the reasons for the high rents in Berlin is that much of the city’s public housing, including that which was state-owned in the former East German capital of East Berlin, were sold to private equity and hedge vulture funds after German reunification in 1990.
Federal and Berlin government regulations aimed at capping rents (Mietendeckel) have failed in Berlin. The two main real estate firms are vowing to fight any plans by the city to take over their properties by claiming that any such action would violate the German constitution. However, Article 14 of the German Constitution (Basic Law) specifically permits the government to acquire private property for the public welfare as it states “property entails obligations. Its use shall also serve the public good.” Additionally, Article 15 states “Land, natural resources and means of production may, for the purpose of nationalization, be transferred to public ownership or other forms of public enterprise by a law that determines the nature and extent of compensation.”
Other smaller real estate companies that could be affected by government acquisition of their rental properties include the Adler Group, Covivio, TAG Immobilien, and Grand City Properties. The Swedish firm Heimstaden, a subsidiary of Norway’s Fredenborg, was not fazed at all by the referendum. On the evening of the Berlin election and as it became clear that the referendum was successful, Heimstaden announced its acquisition of 14,000 Berlin homes from its Swedish competitor, Akelius, becoming the largest landlord in Berlin in one fell swoop. Heimstaden’s recent property acquisitions in Hamburg, Copenhagen, Stockholm, Malmo, Oslo, and Amsterdam have driven up rental costs in those cities.
Akelius, Goldman Sachs, Cerberus, Lone Star Funds of Dallas, Oaktree Capital Group, Apollo Global Management, BlackRock, Yianis Group of Monaco, Dolphin Capital, Bain Capital, and Blackstone — often operating through wholly-owned subsidiaries or affiliates — have opportunistically cornered the rental housing markets in other major cities like Lisbon, London, Paris, Vienna, Bratislava, Helsinki, Zurich, Brussels, Prague, Ostrava, Budapest, Warsaw, Athens, and Madrid while also fighting against government attempts to impose rent controls. Blackstone, headed by Donald Trump supporter Stephen A. Schwarzman, is considered one of the worst of the vulture capitalist GCLs). These billionaire rent userers have found worthy and determined political opponents in London’s Labor Party Mayor Sadiq Khan, Spanish Socialist Prime Minister Pedro Sánchez, the Norwegian Socialist Left Party, and, now, the successful referendum leaders of Berlin.
Deutsche Wohnen, Europe’s largest real estate company, and Vonovia have announced a plan for Vonovia to buy Deutsche Wohnen, a move that would create a virtual housing rental monopoly in Berlin.
The referendum was opposed by the Social Democrats, far-right Alternative for Germany (AfD), the free market Free Democratic Party, and the Christian Democrats. In favor were the Youth Wing of the Social Democrats, which poses a warning to the pro-business elements of the Social Democratic Party; the Left Party; the Greens; IG Metall, Education and Science Workers’, Vereinte Dienstleistungsgewerkschaft, and German Trade Union Confederation unions, and the Berlin Tenant Association.
The Berlin referendum may have a ripple effect in other parts of Germany, where six out of every ten Germans are renters. Residents of Frankfurt, Munich, and Hamburg, where rents are even higher than in Berlin, are now looking closely at the “renters revolution” in Berlin as something to emulate. The idea of government acquisition of private housing has become attractive in other large cities where rents are unaffordable for working class residents. These include London, Dublin, Zurich, Los Angeles, Atlanta, Tampa, Phoenix, Boston, Chicago, Las Vegas, Vancouver, Charlotte, Milan, New York, Seattle, and Sydney.
The top ten countries where global corporate landlords are based are from 1 to 10: United States, Germany, Sweden, France, United Kingdom, Canada, Qatar, Netherlands, Russia, and Italy.
The referendum in Berlin should send a sharp warning to notorious usurious landlords like Trump and Kushner, who have had no problem in ignoring the federal government’s eviction moratorium during the COVID pandemic.
Previously published in the Wayne Madsen Report.
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Wayne Madsen is a Washington, DC-based investigative journalist, author and nationally-distributed columnist. A member of the Society of Professional Journalists (SPJ) and the National Press Club. He is the editor and publisher of the Wayne Madsen Report (subscription required).