In Berlin, a debate is ongoing about the expropriation of apartments before the September elections

Berlin – In Berlin, there is a debate about the expropriation of apartments owned by large real estate corporations ahead of the September elections. The Left Party, which could win the vote on September 20 according to some polls, has made expropriation a condition for entering the governing coalition. Economists and business associations warn against this step, and the federal government wants to prohibit the expropriation of apartments as well.

The German capital is also a federal state, and in five weeks, it will hold state elections. The inaccessibility of housing is one of the major themes of the campaign that began in early August. According to polls, around twenty percent of preferences are held by four parties: the Christian Democratic Union (CDU) of current mayor Kai Wegner, the Greens, and two parties from the far right and left political spectrum – Alternative for Germany (AfD) and the Left. A survey by Infratest Dimap from early July attributed victory in the elections to the Left, while a survey by Insa from late July predicted a win for the AfD.

According to analysts, it seems likely that after the elections, the current coalition of CDU and the Social Democrats (SPD) will be replaced by a three-member coalition of leftist parties: the Left, the Greens, and the SPD. Which party will be the strongest and secure the mayoral post is currently unclear.

Ines Schwerdtner, the national chairwoman of the Left, stated some time ago that if her party governs in the capital, they will begin the expropriation of apartments owned by large corporations. Berlin's leading party figure Elif Eralp has also spoken about it, and election posters from the Left Party promise expropriation as well.

In the hands of large multinational corporations, such as Vonovia or Deutsche Wohnen, are hundreds of thousands of apartments in Germany. In Berlin, around 65,000 municipal apartments were acquired by private investors in 2004. At that time, the city was governed by the Social Democrats and the post-communist Party of Democratic Socialism (PDS), from which the Left later emerged.

Politicians from the Left party refer to the results of an advisory referendum from September 2021. In it, the residents of Berlin expressed support for the expropriation of apartments owned by large landlords. At that time, 59.1 percent voted in favor, with a turnout of 73.5 percent. This was to apply to companies owning more than 3,000 apartments. Only the Left openly supported the initiators of the referendum from the Deutsche Wohnen & Co enteignen (Expropriate Deutsche Wohnen & others) group. However, since the five-year-old referendum, the Berlin city council has taken no steps towards expropriation.

Leading German economists warn against expropriation, stating that it would deter private investors and worsen the situation in the housing market. "When fantasies about expropriation begin to spread, companies, entrepreneurs, and highly qualified workers will always move their activities abroad," said economist and member of the government's advisory board Veronika Grimm to the Kölner Stadt-Anzeiger. "Especially in Berlin, the experiences with socialism cannot be so faded yet," she added.

The leader of the Social Democrats, one of the potential coalition parties, also opposed the demands of the Left Party. Steffen Krach stated that instead of expropriating apartments, the Left should be interested in the expropriation of the so-called Russian House, a cultural center of the Russian Federation in the center of Berlin. Critics argue that during the war in Ukraine, Russia has no right to spread its culture in Germany, and some believe the Russian House serves not artists, but rather Russian spies.

In response to the debate, the Berlin Chamber of Commerce launched its own campaign. For 80,000 euros (1.9 million CZK), they put up posters warning against the expropriation of apartments owned by real estate corporations. "We are concerned that people will think: Money is not safe in Berlin, so we better invest somewhere else," said chamber head Jürgen Wittke.

At the beginning of July, the federal government led by Chancellor Friedrich Merz intervened in the ongoing debate. They included a proposal in their large reform package, which would ban the expropriation of rental apartments. The cabinet also plans to establish a state-owned company for housing construction, which should help improve the situation in the housing market.