It has now been two years since we as an initiative, together with the people of Berlin, won a tremendous victory: 59.1 percent voted “yes” on the referendum to “expropriate Deutsche Wohnen und Co.” (DWE).
Nevertheless, the Berlin Senate, governed by a coalition between the Christian Democrats (CDU) and Social Democrats (SPD), has refused to turn the successful referendum into a socialization law. Instead, it upholds a rent policy that drives up our cost of living and jeopardizes social cohesion.
Lara Eckstein, Justus Henze, and Lucas Mielke are active in communications work and the coordination of Deutsche Wohnen & Co enteignen.
In these two years, the German Federal Administrative Court has overturned the right of first refusal, thereby stripping local councils or district authorities of a key instrument in the fight against tenants being evicted or squeezed out of the rental market. Average quoted rents increased by 30 percent between the third quarter of 2021 and the second quarter of 2023, from 10.24 to 13.23 euro per square metre.
At the same time, Berliners’ real wages (adjusted for inflation) fell by 2 percent last year. Inflation is having a particularly severe impact on those who are already struggling to make ends meet. Even before the referendum, the situation for tenants was grim — today, many people are in dire straits.
The Government Has No Solution
Landlords are raising rents by adding surcharges for renovations, inflation is driving index-linked rental contracts through the roof, and those who have to move are increasingly finding that only furnished flats are available, which is one way landlords circumvent the rent cap.
The only solution that the CDU and SPD can come up with is the tired, empty mantra of “build, build, build”. The foundations of this housing construction policy, which was already nonsensical two years ago, have since been completely eroded: even major real estate developers have stated a refusal to build under current conditions.
Private housing companies, the “cooperation partners” of this policy, only drive up prices with their market speculation. For housing companies dependent on the financial markets, their business models have proven to be unsustainable due to a combination of increased capital costs (interest rate turnaround), energy price shocks, and increases in construction prices.
The Adler Group, Vonovia, and Heimstaden, among others, are all facing acute difficulties with financing, scrapping their already scant number of new construction projects one after the other. This has already led to the first reports of bankruptcies among developers.
That said, this should be no grounds for schadenfreude: the housing groups will not go under simply because their business model is in crisis. In fact, dealing with this crisis will require them to reduce their debt ratio through batch sales to hedge funds and private equity firms or even to local councils, as well as to bolster their non-speculative sources of income, i.e. to squeeze even more money out of tenants.
Launched in January 2022 as a signature project by then-Mayor Franziska Giffey (SPD), the Coalition for Affordable Housing collapsed before it could ever have an effect. The Adler Group, which is now under investigation for (among other things) accounting fraud and sham transactions, pulled out of the project. Vonovia and other companies that are members of the BBU industry association are blatantly breaking their promises to limit rent increases.
While the political situation in the Berlin Senate and the state parliament has worsened for us, the legal situation has shifted in our favour.
All the SPD–CDU coalition can come up with is expanding the Wohnberechtigungsschein (WBS, an entitlement to low-income housing) to higher-income groups. The WBS 220, which aims to extend social housing entitlement to groups with incomes 220 percent above the current federal limit, pits higher earners against lower-income groups. It is clear who will suffer the most under this arrangement: tenants with little money are going to face even more difficulties finding housing.
With more than 1 million Berliners already having voiced as much on 26 September 2021, over the last two years it has become abundantly clear that this crisis, which is dividing our city and instilling fear in us tenants, has no other appropriate response: socialization is the only way forward!
The Berlin SPD leadership has concocted a mixed bag of filibustering tactics to foil one of the resolutions passed at its own party congress calling for the results of the referendum to be put into action. Under the new CDU-led coalition, such obstruction of democracy has become even more brazen.
The latest flourish is the so-called “framework law”. Most recently, Stefan Evers, CDU Senator for Finance, openly insinuated that the law is only to give the appearance of compromise but not actually intended to carry out socialization. The coalition plans to draft this fake law so that it can then sue itself over it — ostensibly in order to verify its legality. The coalition does not seem to mind the fact that this plan and procedure make no sense from a legal point of view.
It is difficult to imagine that even immense pressure from civil society would be able to shift this anti-tenant front, helmed by the SPD and CDU, in the direction of socialization. The prevailing power relations in society, wherein the CDU and SPD align their policies with the interests of private corporations, do not give us hope that a parliamentary majority to implement the successful referendum we won will materialize.
Against this backdrop, alternative political measures such as mass demonstrations or a tenants’ strike are not a convincing strategy to break this blockade.
But we as an initiative are not going to give up. More than 1 million people who voted for socialization are counting on us. For us, one thing is clear: we must find another way to ensure that Article 15 of the German Basic Law is finally implemented and that housing is transferred to common ownership and the public economy.
For this reason, we have decided to take matters into our own hands. Just in time for the second anniversary of our successful referendum, we are proud to announce that we intend to draft the first socialization law in the history of the Federal Republic of Germany ourselves — and initiate a binding legislative referendum on this law.
The Struggle Continues
Back in 2018, when DWE emerged out of networks of tenants organizing against real estate companies, we opted for a different kind of referendum: the Beschlussvolksentscheid, a non-binding referendum whose implementation falls to the state government. There were good reasons for this: Article 15 of the Basic Law had never been applied before, thus there were not enough reference points to draft a concrete law.
Despite the tireless efforts of our socialization working group, we were not able to present our own initial draft law until the spring of 2021. In doing so, we as a citizens’ initiative accomplished something that normally takes entire senate administrations to achieve. At that time, we could not risk having this draft law fail in court due to a formal error. It would have been too much of a risk to put such a bill to a vote in a referendum if we could not be certain that such a law would stand up in court.
We have tried our hand at the parliamentary route — now it is time to develop effective networks that can tackle the problems tenants in Berlin face.
Things are different now. After two years of work, not only do we have more legal expertise within the initiative, but also close relationships with experts in fields who have a surfeit of knowledge and experience with the matter, and who worked to ensure that our draft was legally watertight. Together, we will write and implement the very first socialization law in German history.
As soon as the law is ready, we will initiate a new petition for a referendum: we will collect signatures to launch a new referendum in which Berliners can vote directly on our law. If the majority vote “yes” again, the law will directly come into effect. This referendum will have the same status and validity as any law passed by the Berlin state parliament.
We are optimistic that this new, binding referendum can succeed. While the political situation in the Berlin Senate and the state parliament has worsened for us, the legal situation has shifted in our favour — thanks to a key legal document: the final report of the expert commission.
On New Terrain
Franziska Giffey and others had planned the expert commission on the referendum as a filibuster. For more than a year, 13 renowned legal, financial, and urban development experts thoroughly examined all the fundamental and legal questions regarding socialization and the Berlin housing market. We said it back then, and we still stand by it: this commission was not necessary to recognize the Basic Law, including Article 15, as valid.
But thanks to the meticulous work of the experts who had ample professional experience with such matters, in June 2023 the commission finally reached the majority conclusion that socialization is legally possible and financially feasible — it is appropriate, proportionate, and it is the best means to stop the madness of rental prices in Berlin and keep our city affordable in the long term.
From a legal perspective, the commission’s final report is a success and serves as an important foundation for the socialization law. The report is the most substantial and up-to-date contribution to the legal discussion surrounding the issue of socialization. When the German Federal Constitutional Court reviews our socialization law, the judges will also refer to this final report in order to inform their decision.
We are convinced that a legally sound socialization law “from below” — i.e. from civil society — is feasible!
Ready for a New Phase
Our initiative is taking the next logical step: we will no longer prioritize appealing to the parties. If parliamentary politics fails us as tenants, we are ready to implement our own form of political action.
In the past five years, DWE has grown, diversified, and established itself throughout the city. We have expanded our political practice, sending our neighbourhood teams into the housing developments owned by companies that are to be expropriated under the referendum, with the aim of supporting the tenants there to organize against the manipulative tactics of the housing companies.
We have organized several public events throughout the districts of Berlin, intended to keep the referendum’s 59.1 percent approval for socialization fresh in the memory. We have organized a large conference on the topic of expropriation and developed demands around energy and climate policy that are relevant to the question of socialization as well.
Contrary to the widespread impression that individuals have no power to fight social injustices, we want to create opportunities to develop a defiant and collective political practice and organization.
Our “Right to the City” working group organizes tenants who are non-native German speakers, thereby fighting against racist discrimination in the rental market. DWE has evolved from an effective campaign into a robust, long-term player in housing policy that is firmly rooted in the city.
We have tried our hand at the parliamentary route — now it is time to develop effective networks that can tackle the problems tenants in Berlin face, while simultaneously we draft the new law. Together with our coalition partners, we are organizing for an affordable, liveable city for all.
With 14 neighbourhood teams, nine working groups, new coalition partners, an immense base of supporters ready to stand in solidarity with us, and link-ups with tenant initiatives and other civil society groups in this city, we are ready to kick off a new phase in the struggle.
Light Up the City
The success of our legislative referendum will depend on how well we can leverage the concrete interests of the people to motivate them to join the fight against real estate companies. On the basis of this objective, for over a year now we have been lending increasing support to tenants organizing in buildings owned by the companies eligible for expropriation under the referendum — even on issues such as renovations to improve energy efficiency, broken elevators, or the expiration of real estate companies’ obligations to provide social or rent-controlled housing, all things that are not directly related to expropriation.
A major strength of our initiative is our ability to learn. Accordingly, although our organizing efforts have met with success, we refrain from imposing “from above” any particular ideas of what should be “the right way” to do political work. History cannot be repeated. We must apply what we have learned to the new political situation, as well as continuously reflect on our structure and politics, and make changes where necessary.
That said, we continue to invite everyone to contribute to our initiative, neighbourhood teams, and working groups to tackle the upcoming challenges together. Contrary to the widespread impression that individuals have no power to fight social injustices, we want to create opportunities to develop a defiant and collective political practice and organization.
Doing so will once again light up our city in the colours of yellow and purple — because it is our city, our home, and it will be our expropriation law.
Translated by Hunter Bolin and Rowan Coupland for Gegensatz Translation Collective.