Berlin: majority want expropriation of real estate companies

In a referendum on 26 September, a million people in Berlin voted for the expropriation of the major landlords. In the so-called “Deutsche Wohnen & co enteigen” (DWE) referendum (which in English translates as “Expropriate Deutsche Wohnen and co.”), 56 percent of voters voted to expropriate 240,000 apartments owned by the biggest profiteering landlords, including Deutsche Wohnen, with 39 percent voting against. This is the biggest breakthrough in the class struggle in Germany for decades. It gives a flavour of the militant mood building among workers and youth.

A crisis decades in the making

In Germany, half of all residents live in rented accommodation. In large cities, the number is even higher: on average, 75 percent of urban dwellers rent their homes. Since the financial crisis of 2008, rents have skyrocketed as investors around the world, unable to find profitable avenues of investment, threw their money into the “safe haven” of property speculation. This has led to a familiar trend in many so-called “global cities” like London, New York, Toronto, Tel Aviv and Berlin – skyrocketing house prices and rents that are actually pricing out the working-class residents who keep these cities going.

After the fall of the wall and reunification under the West German capitalist economy, almost 500,000 municipally-owned flats existed in Berlin – accounting for about 30 percent of all flats in the city. Since the early 1990s, more than 200,000 of them have been privatised by the Berlin senate under the administration of the German Social Democratic Party (SPD) and DIE LINKE, a left reformist party. Under their joint rule, the stock of council housing has been eroded from over 370,000 to just 95,000 apartments as of 2019. It is these mass privatisations – led by the supposedly “left” parties – that have created the real estate giants such as Vonovia and, above all, Deutsche Wohnen, which lord it over working-class residents today.

The justification for these privatisations was the debt level of the federal state of Berlin. The senate never posed the question in terms of making the rich pay for the debt through tax increases or any other means. Instead, the working class have been made to pay. The result has been drastic rent increases in Berlin. Residents of the former GDR – where rents had averaged around 1 East German mark per square metre – were especially hard hit by these changes. But even in West Berlin, people had been paying just 4 marks per square metre. Today, rents for new leases average around 11 euros per square metre.

In Berlin, 28 percent of employees are exploited in low-wage jobs. Many are precariously employed. 10,000 students in the city will be without housing at the start of the upcoming semester. Yet landlords receive various subsidies at the state level, including through social benefits, which are essentially a state subsidy on exorbitant rents. As of the end of 2020, more than 580,000 residents relied on Hartz IV, i.e. a German form of unemployment benefit, or other benefits such as accommodation allowance. This accounts for 15.5 percent of the entire Berlin population, much of which goes straight to the giant housing corporations.

Were the housing market in Berlin to be nationalised and the municipality to take ownership of the housing stock, all of this money would be saved by the state and could therefore be spent satisfying real social needs, rather than being given to the capitalists.

Resistance

Resistance against housing conditions in general, and private housing corporations in particular, have been brewing for some time in Berlin. A tradition has developed of tenants organising themselves in their houses and blocks in order to fight back against their landlords. The experience of these clashes taught thousands of residents that it is not enough to fight against one’s own landlord alone – particularly considering the immense stocks that these giant housing corporations like Deutsche Wohnen own. Hence, the DWE expropriation initiative was formed in 2018, calling for a referendum on the expropriation of the large real estate corporations, including the likes of Deutsche Wohnen.

DWE activists conducted a marvellous campaign. Starting as a small initiative, it grew to a movement with as many as 2,000 activists in two years / Image: Uwe Hiksch, Flickr

The DWE activists conducted a marvellous campaign. In just two years, they convinced a clear majority of Berliners that the housing question can only be solved by the expropriation of the private real estate corporations. Starting as a small initiative, it grew into a movement with as many as 2,000 activists. They achieved their historic success through grassroots methods, including flyer and poster campaigns, countless door-to-door conversations, demonstrations, discussions with work colleagues, and so on. With this initiative, a glimmer of class struggle once more began to take hold in Berlin.

Referenda in Germany have to pass many hurdles. First, a certain number of signatures has to be collected. This occurred in two phases: Between April and June 2019, DWE activists collected the signatures of 77,001 Berliners in favour of a referendum, far surpassing the 20,000 signature threshold. This was then followed by a lengthy review by the Berlin senate administration, which effectively blocked the initiative by being constantly delayed. It was not until 17 September 2020 that the admissibility check for the referendum was completed.

In the second phase, which lasted up until 26 June 2021, DWE activists managed to collect a staggering 359,063 signatures in favour of a referendum. The district authorities reviewed 272,941 signatures, of which 183,711 were declared invalid – 41,557 because the signatories were not German citizens, which says a great deal about the democratic rights afforded to migrants and refugees. In total, 789,000 Berlin residents were ineligible to vote in the referendum, as they do not have German passports. Nevertheless, the petition for the referendum was a success, as only 170,000 signatures were necessary.

Courts overturn rent cap

A decisive turning point in the campaign for the referendum came on 25 March 2021, when the Federal Constitutional Court declared the Berlin rent cap unconstitutional following a lawsuit by the CDU/CSU party and the liberal FDP party. The rent cap had been introduced on 20 February 2020 by the governing SPD-DIE LINKE-Green coalition government in Berlin. The law capped the existing rents of 1.5 million apartments in the German capital at 2019 levels. This decision affected nine out of ten rental apartments and was initially time-limited to 2025. The intention of the cap was precisely to take the wind out of the sails of the campaign for the referendum on expropriation.

56 percent voted for the expropriation of the large real estate companies in Berlin / Image: Shushugah, Wikimedia Commons

Though the rent cap was welcomed by the workers and youth, it left many possibilities open for landlords to raise rents anyway. A survey by the German bank, Sparkasse, showed that just 22 percent of Berlin residents were able to reduce their rent costs. Landlords avoided the rent cap in various ways and went on the offensive to bring it down completely. Their political representatives, the 284 members of the German federal parliament from the FDP and CDU/CSU, initiated a review of the rent cap through the Federal Constitutional Court, which they submitted in a joint application, to ascertain whether the state of Berlin is entitled to legally intervene in determining rent prices.

The German Constitutional Court thus ruled the rent cap null and void, claiming it was incompatible with the German constitution, because, according to the German civil code, such legislative power lies exclusively with the federal government. Landlords’ associations, real estate companies and their political representatives, already engaged in a vicious campaign against the DWE referendum, felt emboldened by the court ruling.

But on 26 September they found that there was a price for their victory against the rent cap: 56 percent voted for the expropriation of the large real estate companies in Berlin. The overturning of the rent cap had radicalised many Berliners, convincing them that if the big landlords cannot be convinced to accept modest restrictions on their profiteering, they must be expropriated entirely.

The government will not act

The successful DWE referendum calls on the senate to initiate all measures necessary to bring the portfolios of the giant real estate companies into common ownership. To this end, a law would have to be passed enabling the socialisation of the stocks of all privately-owned housing companies with over 3,000 apartments in the state of Berlin.

Current mayor of Berlin, Franziska Giffey (SPD), said she wants to “respect” the DWE decision, but wants to check the “constitutionality” of socialising housing / Image: Jugendpresse Deutschland, Flickr

The referendum shows that class issues, when they are taken into society with persistence by tenacious activists with the correct ideas and arguments, can win broad popular support. “Expropriation” is no longer a spectre – at least when it comes to real estate corporations – but a demand of over a million Berliners, enjoying sympathy from working-class people all over Germany. This turn in popular consciousness must be used to broaden the class struggle and draw even more people into political activity.

The result of the referendum is a clear call by the people for the senate in Berlin to take serious action. However, with the exception of DIE LINKE, all the parties are in opposition to this democratic decision. It should be noted that none of these parties have received anything even remotely approaching the levels of support that the referendum enjoys in elections to the House of Representatives (i.e. the parliament of the federal state of Berlin).

The Greens want to use the result as leverage to push through a new rent cap after the last one was overturned by the courts, but see expropriation as a last resort. The SPD, the CDU (the largest German conservative party), the FDP (a classical liberal party), and the AfD (a far-right party) are fundamentally opposed to such action. So, it is clear that no coalition will lead to the resolution being implemented. Postponement and sabotage are pre-programmed into Berlin’s politics.

The SPD is already leading the way in selling out the popular mandate. Its outgoing mayor, Müller, has struck a deal with the real estate companies, Vonovia and Deutsche Wohnen, to buy up more than 14,750 flats – many of which are in need of renovation – as well as 450 commercial units for €2.5 billion euros – 24 times the price the corporations paid when these properties were privatised. Müller’s successor, Franziska Giffey (SPD), meanwhile, has said she wants to “respect” the DWE decision, but wants to check the “constitutionality” of socialising housing. This is a red herring intended to trap the movement in a process of legal wrangling until demoralisation and exhaustion set in. Several legal opinions have already confirmed the fact that socialisation is perfectly legal.

The need for a socialist programme

The SPD-DIE LINKE-Green coalition that is likely to be formed on the back of the latest elections will not change anything. It will be yet another austerity coalition. By preparing to join such a coalition, the leaders of DIE LINKE are yet again submitting in the most cowardly manner to the constraints of capitalism, which will inevitably demand further attacks on the living standard of the working class. To cite but one example, DIE LINKE agreed in the last legislative period to the privatisation of the suburban railway in Berlin.

It is no wonder there is widespread distrust of and demoralisation with DIE LINKE among the most radical layers of society. Instead, the DIE LINKE leaders ought to have refused to participate in such a governing coalition. They should have formed a socialist opposition to give an unbending voice to the movement in parliament – but even more importantly in the streets, trade unions and workplaces.

What the housing referendum shows is that underneath the surface there is a very radical mood of anger and a willingness to struggle. But DIE LINKE has been completely unable to connect with this mood. The leadership of DIE LINKE supported the referendum in words. However, despite possessing significant resources, a large apparatus and a vast network of activists and trade unionists, it did absolutely nothing to actually mobilise these in support of the campaign. It is a damning condemnation of the DIE LINKE leaders that this campaign was in fact run by largely unorganised grassroot activists.

The consequence of the timid approach of these ladies and gentlemen has been clear: while the referendum showed a very radical mood in society, the Berlin local elections, which took place at the same time, saw DIE LINKE decline by 1.6 percent in comparison with its 2017 result.

Nothing better can be said about the leadership and apparatus of the German federation of trade unions (DGB). The DGB leaderships are playing a cowardly role, and the federation lacks a clear stance on the referendum. Only a few trade unions took a position in favour – and even they only supported the referendum in words. The unions did not mobilise in the streets and workplaces. Like DIE LINKE, they did not throw their apparatus and weight behind the campaign. This illustrates the impasse that reformism has reached. While the working class, and especially the youth, are radicalising and starting to fight back against austerity, falling living standards, closures and lay-offs, the reformists have nothing to offer but to manage the crisis of capitalism in the interest of the ruling class, and they therefore seek to curb the movement.

Now the housing movement in Berlin is confronted with the problem of perspective and programme. The housing question is only one of many problems that the capitalist system creates. For decades, the capitalists, their states and governments have made the working class pay for every problem that has arisen as a result of this system of production for profit.

This has served to radicalise millions of workers and youth. With workers having borne the brunt of the Corona crisis and with inflation looming, the class struggle will be on the order of the day in Germany as workers are forced to fight back to defend their conditions. The perspective is rising class struggle across the board, and the DWE movement must link up with these struggles and this mood.

It is above all necessary to connect the current struggle with all the other struggles of the German working class on the basis of a socialist programme. In this way, the struggle could be generalised onto a national scale against the capitalist system as a whole. This would reach ever broader sections of the working class – not only for passive support over a single issue referendum, but as active participants in the streets and workplaces. This would deepen the struggle in scale and methods.

Private ownership of the means of production is the reason for the general crisis racking every country on this planet. The Berlin housing movement points the way out. We need to expropriate the landlords – but not only the landlords. The whole capitalist class has to be expropriated so that the working class can take control over production and put an end to production for profit. Rather, all the machines and knowledge that society possesses could be directed to the satisfaction of real needs. Only a socialist planned economy can solve not only the housing crisis, but the crises of climate change, the Covid epidemic, the economy, and the rest.