Small gifts keep friendship alive: the 13 members of the expert commission for the expropriation of large housing groups received a preprint of the book on the popular initiative “Deutsche Wohnen

At least that’s what the co-founder of the initiative said, Rouzbeh Taheri, who thus secured a victory on points, which he had prepared with a vivid presentation on the motives for the planned “socialization” of companies with more than 3000 apartments.

The core of the message: The business model of these companies with the best contacts to government members of the federal and state governments is not committed to their tenants, but to their shareholders. Higher rents served to secure rising returns. Likewise modernizations, the costs of which would be passed on to tenants and which at the same time increased the value of the property. On the other hand, repairs and maintenance on their own account are neglected because they would reduce profits. This explains why entire blocks without heat have to be supplied in an emergency every heating season.

There is nothing comparable in state companies. These would comply with the mandate laid down in the Berlin constitution to provide large sections of the population with housing. The municipal companies give up to 60 percent of the vacant apartments to applicants with low incomes with a residence entitlement certificate – because agreements with the Senate oblige them to do so.

“You can’t rely on voluntary commitments by private companies,” Taheri said. Every day that socialization is postponed results in more households being displaced from their traditional quarters. Almost 60 percent of Berliners would have voted for socialization because they knew it. The question is therefore “whether we can shape Berlin democratically or whether the city will be shaped by corporations that are committed to the profits of shareholders”.

The head of the research institute empirica Harald Simons had previously explained that this is not the case: he put the market share of “private companies” at 15 percent, and the trend is falling. Simons is a member of the industry-friendly “Central Real Estate Committee” ZIA, but is also known for its controversial theses. Years ago he announced the “end of the party” on the real estate market – and falling real estate prices. This did not happen and prices continued to rise.

But Simons sticks to it: Germany’s cities would no longer grow. New construction will remain at a high level of up to 17,000 apartments. Rent will go down.

The fact that the number of households in Berlin has recently stopped growing was confirmed by Simons from the presentation by the former State Secretary for Housing and Humboldt researcher Andrej Holm. But unlike Simons, who primarily pointed to the dynamic growth of income and the economy in Berlin, Holm showed that almost half of the households, around 760,000 Berliners, have to pay more than 30 percent of their income for housing. 30 percent is the upper limit for what is “affordable”, as the governing mayor Franziska Giffey (SPD) recently said in the Tagesspiegel.

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According to Holm, the city is also missing around 50,000 apartments. According to Berlin’s tenant boss Rainer Wild, there are even 70,000. And that means that more and more people in Berlin are “living in precarious tenancies without a proper tenancy agreement”. In the consultations of his association, people who rent a single room with the right to use the bathroom and kitchen complained – and these are not shared apartments.

Like Taheri and tax activist Christoph Trautvetter, Wild sees the problem in the “financialization of the housing market”, which is thus dependent on the capital markets. If a stock corporation goes bankrupt, “a powder keg is created for society”. That is not excluded in view of the billions in debt of the companies. In the case of Vonovia, these rose dramatically. Taheri sees this as a “ponzi scheme” to pay for rising shareholder returns.

These are not radical assumptions: The coalition agreement between the SPD, the Greens and the Left also states the goal of bringing half of Berlin’s rented apartments into public interest companies such as the municipal or cooperatives. Their rents are significantly lower than those of Deutsche Wohnen, for example.