Home news Expropriations are expensive mischief - economy

Expropriations are expensive mischief – economy

Those who expropriate housing companies pledge the future of the cities. The housing shortage can not be solved against, but only together with private investors.


Comment by Nicholas Piper

No, it would not be socialism if the large housing companies in Berlin were expropriated and adequately compensated. But it would be an economic, social and political disaster, would the initiators of the referendum "expropriate German housing prevail" and with them the tens of thousands of protesters who went on Saturday against the "rent madness" on the street.

The taxpayers of the not particularly financially strong federal capital would have to spend between 20 and 30 billion euros, with cautious estimates, for a dramatic act, without any single apartment being built or something being done for urban development. Probably the whole action would even harm the housing. Who will still invest in Berlin, if he expects to be expropriated sooner or later? The city would pledge its future to protect 100,000 households from rent increases. Many of these households are not even among the most needy.

Debate about housing shortage

"Expropriations are now really socialist ideas"

CSU boss Söder rejects expropriations of housing companies. Other Christsoziale attack especially Green boss Habeck. SPD Vice Stegner, however, sees a "self-defense" of the state.


All this does not mean that the rents are not a problem, on the contrary. The housing question is the central social issue of the present in Germany. Rising rents cause anxiety among tenants and the segregation of neighborhoods. For low-income tenants, big cities are becoming inhospitable. And in an overheated market like the current one, there is always abuse and bag-cutting. Only the profits of the housing companies are not the cause, but the result of the problem. The problem is a fundamental scarcity in the cities. The demand for housing is rising much faster than the supply. And the basis of everything, land, can not multiply at all. There are no simple solutions. This makes the topic vulnerable to populist temptations. Once you have an enemy – in this case Deutsche Wohnen – everything seems very simple.

The populists (this time from the left) also have an easy time because science, politics and the media have perceived the emergence of this shortage too late. If things were different, Berlin would not have privatized so many urban dwellings at the turn of the millennium. At that time, the wrong conclusions were drawn from demography: the Germans are becoming less so they also need less living space. That's what most people thought. The main problem of housing policy at the time seemed to be the revitalization of shrinking cities in East Germany.

Today you know better. The demand for housing is increasing as more and more people live in one or two-person households. It is also rising because of immigration to Germany, but above all because of a secular and global urbanization trend. Education, culture, medical care, social life, even wifi have dramatically increased the city's relative advantage over the country, especially for young people. And it is not yet clear how the trend would be reversed. In 2017 alone, Berlin's population increased by 38,000.

It would also be time to reform the taxation of the land

This scarcity does not disappear through expropriations. The slogan of Horst Seehofer ("Build, Build, Build") only partially helps. It does not just matter that, but also as built to keep cities alive and loveable in the face of rapid growth. Contradictions must be resolved, between the preservation of a neighborhood and the necessary consolidation. Or, as is currently the case in the north-east of Munich, between housing construction and the last urban greenery. There are also many instruments that the state can use in favor of low-cost housing: stimulation of social housing, reduction of superfluous regulations, deals with private investors who commit themselves to build part of the housing for the needy. It would also be time to reform the taxation of the land. The hostile land transfer tax is abolished and replaced by a land value increase tax. Finance Minister Olaf Scholz's draft of the property tax reform enforced by the Constitutional Court is not yet tackling the problem.

After all, it's time to stop demonizing private profits from the housing industry. The housing problem can only be solved with private investors. What is the point of deterring them? Not without irony it is, given the legacy of this party, that just the left on the subject of expropriation so outrageous. The old GDR fought for its existence with the housing question. It solved them in their own way: Low rents were bought with poor quality new buildings and the decline of the old building substance. Exactly that could be the consequence, had the referendum succeeded. Maybe one should talk about socialism in this context.

Reader's discussion Do you understand the Berlin referendum on expropriations?

Do you understand the Berlin referendum on expropriations?

The alliance "expropriating German housing and Co." collects signatures for a referendum this weekend. It is required to expropriate companies with more than 3000 apartments in Berlin.


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