Germany’s government wants to establish formidable legal and financial barriers to housing socialisation. It would come with implications for tenants, taxpayers and investors, and the future of Berlin’s housing market.
Federal Interior Minister Alexander Dobrindt has unveiled plans that would make it much harder for German states to transfer privately owned housing into public ownership.
In comments first reported by Bild on Sunday, the conservative politician outlined an “Investment Protection Act” aimed squarely at Berlin.
The Left, Greens and Social Democrats (SPD) in the capital are considering bringing 160,000 flats owned by large property companies under public control as part of a potential state coalition.
Dobrindt – who is a member of the Christian Social Union, the Bavarian sister party to the CDU – is not proposing an outright ban on the socialisation of housing. But his rules could make it so difficult and expensive that Berlin’s incoming government might be unable to pursue its stated plan.
Three major hurdles
Under the proposal, a state would first have to demonstrate a compelling need for socialisation. It would also have to show that every alternative – including investment in, and subsidies for, new housing – had been exhausted.
Property owners would then have to receive compensation at full market value, calculated by an expert. That compensation would be payable immediately in cash.
Berlin’s prospective coalition envisages making up to €16 billion available as compensation for socialising housing owned by companies with more than 10,000 flats, with compensation below market value.
Requiring the city to pay the full value in cash could make the scheme prohibitively expensive.
On Monday, the Left Party’s lead candidate in Berlin, Elif Eralp, said the proposal sought to undermine the constitution. Luigi Pantisano, a co-chair of the party, predicted that it would not survive scrutiny by the Federal Constitutional Court.
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Expropriation is not socialisation
Current media reports sometimes use “expropriation” and “socialisation” as though the terms were interchangeable. Legally, however, they mean different things.
Expropriation – or Enteignung – is covered by Article 14 of Germany’s Basic Law. It allows particular property rights to be withdrawn for specific public-interest projects, such as building roads, for example.
Socialisation – or Vergesellschaftung – comes under Article 15. It permits land, natural resources and means of production to be transferred into public ownership through legislation. Berlin’s prospective coalition says it intends to follow this route, rather than Article 14.
The difficulty is that Article 15 has never been used before. That means there’s no settled case law explaining when socialisation is permissible or how compensation must be calculated.
In other words, Berlin can’t be certain that its plan would withstand a legal challenge. But nor can the federal government be sure that Dobrindt’s restrictions would withstand constitutional scrutiny either.
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Constitutional law professor Ulrich Battis told the Funke Media Group that Dobrindt’s plan to insist on compensation at full market-value is particularly risky because the constitution allows lawmakers some discretion over compensation.
But he also said that other parts of the proposal may be feasible.
Mixed signals
The CDU and CSU are firmly opposed to Berlin’s plans. But because Article 15 of Germany’s Basic Law explicitly provides for socialisation, the two parties have seemed less than certain about how best to stop them.
Chancellor Friedrich Merz has repeatedly promised to prevent Berlin’s plans.
Meanwhile, government spokesperson Stefan Kornelius recently said there was currently “no active reason to intervene” and that the government would first wait for Berlin’s parties to reach their decisions.
Dobrindt’s announcement on Sunday clarifies the government’s apparent strategy. Rather than prohibit socialisation outright or simply wait for Berlin’s decisions, the proposal seems designed to leave it legally possible on paper but prohibitively difficult in practice.
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The SPD’s dilemma
The coalition’s uncertainty is not only legal. It may also reflect political differences with – and within – the SPD.
At federal level, the SPD joined the CDU/CSU in approving plans for an Investment Protection Act earlier this year. In Berlin, however, the SPD has agreed with the Greens and the Left Party on a preliminary proposal to socialise 160,000 homes.
The election result in Berlin throws the dilemma into even starker relief. The SPD’s lead candidate campaigned against socialisation, while the Left Party made it a central pledge.
According to Die Zeit, the SPD lost 39,000 votes to the Left Party, which emerged as Berlin’s strongest party.
Following Dobrindt’s announcement, Left Party co-chair Luigi Pantisano challenged the federal SPD to decide whether it stands “on the side of the rent mafia or on the side of the tenants”.
Parliamentary arithmetic
Resistance within the SPD also helps explain why the federal government could struggle to turn Dobrindt’s proposal into law.
Together, the CDU, CSU and SPD have a Bundestag majority of just 12 seats, meaning relatively few coalition rebels could deprive any bill of the votes it would need to pass.
In short, Berlin can’t be sure its socialisation plan is constitutional, while the federal government can’t be sure if Dobrindt’s restrictions are either – or that enough of its own MPs would support them in the Bundestag.
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Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: thelocal.de
