LPE Europe – Student Housing Series – Berlin

With Elmer van der Wel – Deutsche Wohnen & Co. Enteignen

Conducted and edited by J.K. Langeveld

Rome, Rotterdam, Amsterdam, Glasgow, London, Berlin. Affordable housing is a major problem in many European cities. Berlin provides a unique story on civil efforts to resocialise the housing in the city. In this blog post we speak with Elmer van der Wel who is active for the Deutsche Wohnen & Co. Enteignen movement.

What is the Deutsche Wohnen & Co. Enteignen movement and what are its primary goals and objectives?

“In 2021, we won a referendum about the socialisation of housing in Berlin. We collected close to 360.000 signatures (around 10% of Berlin residents) and got more than a million yes-votes, which constituted 59,1% of valid votes. Our demand is that the housing owned by large real estate companies (owning 3000+ units) is turned over to a new organisation, which would work similarly to housing cooperatives (more information can be found about the functioning of this organisation on our website: www.dwenteignen.de).

By expropriating and socialising the stock of large housing companies, around 250.000 housing units could be taken off the market permanently and be turned into social housing. Social housing is disappearing quickly in Berlin as a result of time frame policy (social housing is social housing only for a specific amount of time; 10, 20 or 30 years) . The rise of rents in Berlin has been absolutely wild over the last decade. In some particularly popular neighbourhoods, the rent offered on the usual big portals has tripled in 10 years. Gentrification is changing the city very rapidly and the large, often financialised housing companies (listed on stock exchanges) have played a key role in this process. They employ a multitude of business models: doing the absolute bare minimum or no maintenance at all, and superficial, unecological retrofitting of apartments between contracts to thereafter double the rent.

Not only is this a pressing social issue, it also constitutes a dire situation in climate terms: many apartments in Berlin are wasteful in terms of their energy consumption (around 80% being powered by gas). If landlords renovate apartments, they can raise the rent permanently (also after the costs have been paid back in 12.5 years) – this leads to what is called “green gentrification”.

And lastly, this is also an economical issue: Berlin has historically been a state with higher-than-average unemployment numbers. Money from benefits to pay for rent goes directly into the pockets of shareholders – 30% of rent goes towards paying dividends. This is a scandal in terms of public finance considering that Berlin is indebted to 60 billion euros – a large part of which (21,6 billion) was caused by the Christian Democratic Party during the 2001 banking scandal – you get it, related to real estate”

How did the movement start? Could you elaborate on the social/political forces that have played a role during the whole process.  

We started in 2015, where initially a group of dissatisfied renters of Deutsche Wohnen (started as a subsidiary of Deutsche Bank, backed by Blackstone) decided to organise themselves. The movement got larger very quickly, inviting people in two gentrifying neighbourhoods to information meetings. Thereafter, other neighbourhoods followed.

In 2017, there was the idea to use the federal constitutional Article 15 (on socialisation) to expropriate large real estate companies in Berlin. The article states that 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. It had never been applied since the new formation of the constitution in 1949. Obviously, this led a lot of real-estate-politicians and the real estate industry to speculate on its applicability to housing, its compatibility with Berlin’s state constitution. The organisation started and quickly grew, again. The decision was made to move forward with a ‘parliamentary decision referendum’ (directions are proposed, not a law), The first phase of signature collection started in 2019 and close to 80.000 signatures were collected. The next political obstacle that appeared was the need for a constitutional check by the Berlin state court. The constitutional check was delayed, delayed, delayed again, and took 1.5 years. The movement had to threaten with a court case for the results (which were positive for us) to be published. The next round of signature collection, where 170.000 valid (German) signatures had to be collected, started and we managed to get a total of 360.000.

The referendum was held in September 2021, the new Senate wanted to (again) delay us with an ‘expert committee’, which we decided we needed to accept (alternative: do the whole signature collection process again, starting immediately), and this expert committee has just released its final report about ‘how to do the socialisation of housing using this article’. Its conclusions are (unsurprisingly) that socialisation of housing is constitutional, necessary, efficient and reasonable. Furthermore: the housing can be socialised not according to market rates, but below those, and our proposed threshold of 3000 for expropriation of a company can be lower.

What legal and political challenges has the movement faced (and is currently facing) in achieving its goals? And what are the future steps that need to be taken to complete the project successfully?

The expert committee’s report remains unclear regarding the specific amount of compensation. We have proposed a concept which departs from the principle of the rent index: the compensation for the housing stock (of +-250.000 units) of the largest companies will then lie at around 8 billion euros vs. 40 million euros according to market rates. The political parties in place, in particular the social democrats, had a consistently focused line of arguing that socialisation would surely cost 40 billion, and that it would impact the state budget. These were willing lies because they, too, knew that market prices did not have to be paid, and that the collected rent would pay off the bonds, which a new organisation carries. The social democrats did not waste a chance in stirring moral panic about  unaffordability, unconstitutionality, associating our initiative with uncompensated expropriations by the Nazis as well as by the East German state during socialism, and declaring that socialisation of housing would basically mean the end of justice.

Politically, we face a ton of obstacles. The 2023 re-elections put the Christian Democratic Party in power, who came to power with a racist and pro-car campaign. They are strictly against socialisation of housing, however try to obscure this by arguing for a ‘socialisation framework law’, which would cause an unnecessary delay. The Social Democrat party’s leadership is against our plans too. They try all possible means to stop us in our progress, divert attention from us in public debate, and spread outright lies about us, our goals and the feasibility of our goals, as I specified in the last question too.

How does the movement relate to student housing, does it have a specific focus on students/younger persons?

Not directly, but indirectly of course any of those who come to Berlin without a large network suffer from a very low supply and of that supply, very high rent. If we could create a large housing stock which is not-for-profit, then students will benefit. One of our organising pillars were universities. However, when we needed to collect signatures in 2021, Covid-19 inhibited this possibility, as universities were closed for long periods of time.

Berlin has around 10.000 dedicated student dwellings and close to 200.000 students – so obviously the affordability crisis hits students hard. Prospective students without the social or economic capital needed to find an affordable room in Berlin will choose to study elsewhere, the elite can come and stay.

How does the movement fit into the broader European/global discussions on affordable housing? Do you think a similar method could be applied to other German cities or even other countries (maybe there are already similar initiatives)?

Hamburg has already initiated a similar movement and went through an initial round of signature collection, where they collected close to 20.000 instead of the needed 10.000. It is likely that after their current phase, where the proposed plan is under evaluation (is it in accordance with the German as well as the Hamburg constitution?), they will continue to the second round of collecting signatures. There and then, they have to collect 60.000 signatures in just 3 weeks. I’m confident that they will make that happen, and us from Berlin will support them.

In Germany, the federal level has a comparatively powerful status. The 16 federal states each have their own constitution, apart from the federal constitution. Only 2 federal states (Berlin and Thuringia) have not explicitly taken a clause on socialisation in their state constitutions, although Berlin has the right to adequate housing in its constitution. The fact that Berlin and Thuringia do not have a socialisation article in their constitution makes opponents really wild. They like to iterate this again and again as a reason for socialisation of housing to be unconstitutional. A bunch of reports from leading lawyers have commented that the federal level provides the clause anyway.

Berlin is a city-state, like Hamburg and Bremen. These are the only three city-states in Germany, so to do this in other German cities (I believe) would not work, unless – and I of course invite this – any of the other 13 states in Germany decides to socialise housing.

I do not know the European situation exactly, but I believe national governments usually have an article about expropriation in their constitution – what countries have such an article about socialisation, I do not know. Expropriation is often exercised, in Germany 300 expropriations happen per year, for infrastructure projects such as highways or coal mines. I would say it probably comes down to the local level and the specific legal institutional arrangement – I would be very happy to see such a research project happen!

What is next?

On the 26th of September 2023, on the 2 year anniversary of the referendum, we announced starting a second referendum. This time, we will take the legally binding route and propose a law that will go into effect immediately, in case the referendum goes through with a positive outcome. For this reason, we started a fundraising project, since we are contracting a legal firm with the goal of writing a thorough law.
If you want to support click here and here!

 

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