Thread

Far-left party wins Berlin election, pledging to nationalise housing

72 points · 152 comments · theanonymousone

soonnow · 1789971698 · focus · HN ↗
To add a b it of context. They do not want to confiscate housing. They do want to pay landlords, though below current (very high) rates. Also this would only apply to private real-estate companies not individual owners.
And they can't govern alone, so I think it's unlikely that this plan is actually implemented as originally planned. The likely coalition would contain 3 parties.
1. dirasieb · 1789972590 · focus · HN ↗
  >it's not confiscation, you're just forced to sell at a price i decide is fair
  sound logic
  1. paganel · 1789972686 · focus · HN ↗
    You need sound logic against the evils of neo-liberalism, there's nothing logic about housing being as expensive as it now is.
    giacomoforte · 1789972942 · focus · HN ↗
    It's a reflection of the demand from people who want to live in Berlin.
    698969 · 1789977125 · focus · HN ↗
    Correction: It's a reflection of demand from people who already live in Berlin. That's who were allowed to vote in the referendum.
    They don't care about the elasticity of the market, or the demand from people who would want to live in Berlin in the future.
    They already have an apartment, and at pretty low prices because nearly everything built before 2014 is subject to rent control,
    I'd guess most people just voted for it because in their eyes "government promised to take apartment from my landlord and lower my rent even more".
    tirant · 1789974445 · focus · HN ↗
    The logic is defined by demand. Currently Berlin is under high demand, and that’s why drives prices up. On top of that many rents, around 12% are paid by the job center, which also drives prices up. That’s around 250.000 housing units paid by someone else’s money. That’s the scandal.
    paganel · 1789976126 · focus · HN ↗
    > Currently Berlin is under high demand, and that’s why drives prices up
    Yeah, I know the written logic of all this, but as things stand right now we didn't have homelessness East of the Wall back in the day, while the West had. That should have been reason enough to throw all this capitalist and pervert logic under the bus, but I understand how come the highly paid programmers in here are happy with the current economic system, homelessness be damned. Which is to say, you're telling me nothing new.
    tirant · 1789976745 · focus · HN ↗
    Do you know why there was not homelessness in the DDR?
    Because it was forbidden by law. You were forced to be put in an institution or directly went to prison. Check Section 249 of the DDR Criminal Code.
    And by the way, the DDR suffered from chronic housing shortage. People were cramped in barracks with not bathroom and no heating. Technically housed but in actually povert level of housing. It was an absolute disaster.
    paganel · 1789977042 · focus · HN ↗
    > Because it was forbidden by law. You were forced to be put in an institution or directly went to prison
    Seems like a very good law, don't you think? And this reminded me of how come one of my favorite childhood books from when I was 3 or 4 here in Romania was about DDR constructors building apartment flats, loved that book and loved the spirit behind it.
    > People were cramped in barracks with not bathroom and no heating
    There were? Back in the '70s and '80s? You sure? I don't remember it that way here in Romania back in the '80s, and I know that the DDR had a much better economic condition than us, Socialist Republic of Romania.
    [deleted] · 1789979890 · focus · HN ↗
    [deleted]
  2. 4gotunameagain · 1789972887 · focus · HN ↗
    The "free market" (which has been demonstrated to not be free at all) has no place in basic needs such as housing.
    Rent extraction is utterly counterproductive for a society.
    Housing should not be a commodity.
    WithinReason · 1789973154 · focus · HN ↗
    Who builds the houses then?
    mschuster91 · 1789973417 · focus · HN ↗
    Governments directly, cooperatives or non-profit organizations. The Churches used to be pretty active in that space as well to invest tithes, with rents paying for common-welfare projects.
    IshKebab · 1789973685 · focus · HN ↗
    Yeay communism! They built such lovely tower blocks.
    vrganj · 1789974451 · focus · HN ↗
    Yeah like that ugly drab city of ... Vienna??
    <a href="https://www.theguardian.com/lifeandstyle/2024/jan/10/the-social-housing-secret-how-vienna-became-the-worlds-most-livable-city" rel="nofollow">https://www.theguardian.com/lifeandstyle/2024/jan/10/the-soc...
    WithinReason · 1789982131 · focus · HN ↗
    That's more like social housing:
    > an income maximum for applicants of €57,600
    and can't be bought, only rented
    mschuster91 · 1789985001 · focus · HN ↗
    first of all, Europeans don't need American wages. 57k is comfortable middle class in Austria, especially if you have government subsidised housing.
    as for the "only rented" part, again, at this level of low rent it does not matter. you're better off renting. And Europeans have actual pension systems, we are nowhere near as reliant on real estate always appreciating in value.
    ImPleadThe5th · 1789973677 · focus · HN ↗
    Who builds all those bridges, roads, power plants, and other public works projects? Maybe them?
    Also government formed co-ops. Find people who want a flat and agree on rent before you build it. As the loan is paid off rent becomes substantially cheaper. The second best time to plant a tree is today.
    It also doesn't need to be the entire housing stock, just enough to help keep rent low (see Vienna).
    spankalee · 1789973591 · focus · HN ↗
    Housing should be a commodity. Commodities are fungible, plentiful, and easily tradable.
    Housing right now is the opposite of a commodity: it's a boutique investment for individuals whose price is propped up by regulations that artificially limit supply.
    repsilat · 1789974469 · focus · HN ↗
    Yes, the grandparent scored an own goal with their aside
    >> The "free market" (which has been demonstrated to not be free at all)
    The Berlin rental market suffers under strong government intervention, and would benefit from being much freer.
    4gotunameagain · 1789976232 · focus · HN ↗
    This is not true. Two more strong government interventions that would benefit the housing market:
    - Tax empty flats to death
    - Disallow corporate ownership of residential property
    4gotunameagain · 1789976358 · focus · HN ↗
    I do not think that housing should be broadly available for trade in global markets, in the typical definition of a commodity.
    That enables mass buyouts of housing from corporation which leads to rent extraction and a myriad of woes.
    spankalee · 1790040219 · focus · HN ↗
    The mass buyout of housing is by the masses: individuals own the _vast_ majority of housing, benefit from its scarcity and rising prices, and lobby for more restrictive zoning. Most rental property is owned by individuals too, so they're also the main rent extractors.
    It's not corporate lawyers who show up to protest new housing, it's retiree homeowners.
    tirant · 1789976434 · focus · HN ↗
    The only reason you enjoy cheap food is because of the free market.
    Housing in many countries is not part of a free market but part of a monopoly where the government decides how much, how many, the what and the when the houses can be built. If it was a real free market, the issue would have been long solved.
    4gotunameagain · 1789977421 · focus · HN ↗
    The only reason I enjoy cheap food is the industrialisation of agriculture and the subsequent increase in yields.
    P.s. the EU already decides how much, how many, what and when will be planted, through subsidising. And it's going quite well.
    derektank · 1789976791 · focus · HN ↗
    Surely, if we are decommodifying basic needs, our first priority should be food, not housing, right? How has nationalization of agriculture worked in the past?
  3. mschuster91 · 1789973134 · focus · HN ↗
    Most of the affected housing used to be government owned, sold at firesale prices after the CDU Diepgen government thoroughly wrecked the state finances with a banking scandal at the end of the 90s.
    The large investor landlords purchased the homes and often didn't even do the bare minimum in upkeep. The real estate nevertheless appreciated massively because of Berlin getting more and more popular.
    It therefore makes sense to nationalize this housing stock, and I'd see a value comprised of "original purchase price, upkeep and inflation-plus-3%-tied appreciation" as fair value. Maybe even less because they extracted 20 years worth of rent payments from the properties already.
    IshKebab · 1789973638 · focus · HN ↗
    I don't know if that's really fair though because it's unlikely that the people that benefited from the fire sale are still the owners.
    It would make more sense just enforce maintenance standards and improve renters rights. You can't really legislate supply & demand.
    698969 · 1789975208 · focus · HN ↗
    Still the same companies Deutsche Wohnen and Vonovia but I agree with the second part.
    Their yearly profits are capped because of the Mietpreisbremse (rent control) law since all the old buildings that they bought would fall under it, so it would've been better to put the money towards either building new state-owned housing or helping the tenants enforce their rights.
    The laws are there to protect tenants against neglect from the landlord but enforcement takes multiple months which is not a reasonable timeline if you have a problem in your apartment and the consequences for landlord are mostly just reducing the rent for that time by a certain percentage which doesn't make a difference if the rents are already cheap because of the Mietpreisbremse, so it would also be good to introduce fines but not sure if Germany's legal framework allows for that.
    tirant · 1789974259 · focus · HN ↗
    The reality is that the actual large-scale sell-off of public housing was carried out under the SPD–PDS (now The Left) red-red coalition led by Klaus Wowereit in 2004. for prices of around 30.000€ per unit.
    mschuster91 · 1789977048 · focus · HN ↗
    Which is precisely what I said:
    > sold at firesale prices after the CDU Diepgen government thoroughly wrecked the state finances with a banking scandal at the end of the 90s.
    Wowereit didn't have much of an alternative, the cash coffers were drained.
  4. bmacho · 1789974162 · focus · HN ↗
    [edit - deleted]
    backhold · 1789974756 · focus · HN ↗
    With the disclaimer that I am neither German nor familiar with the policy under discussion,
    Confiscation with (some) remuneration is still confiscation. Is your comment satirical?
    [deleted] · 1789977993 · focus · HN ↗
    [deleted]
  5. monegator · 1789977192 · focus · HN ↗
    Given it affects PE funds that have gouged up all the supply, yes that is sound logic.
    My province's capital has 43% of unhinabitated houses. They are not even on the market, as we are in a housing crisis. Vast majority of them are property of large housing groups that are backed by black rock and company.
    The same firms are manouvering the politicians to get approvals to build modern monstruosities, because there is a housing crisis, but they build only luxury homes thst cost too much and remain unhinabitated.
    Yes it is sound logic to force big conglomerates to dissolve by law. Law should aim for the public good.
    m4xp · 1789990206 · focus · HN ↗
    There should be huge taxes on empty houses. This breaks the supply demand price negotiation, if they can gauge price by 2x they dont care if they rent half the houses.
    Helmut10001 · 1789996413 · focus · HN ↗
    Such a law existed in San Francisco since 2022 and it was just cancelled by court order. The problem is: there are so many edge cases for empty apartments that it is impossible to account for. In Berlin, e.g., just imagine all the empty apartments in 10 years because no one wants to rent unrenovated, uninsulated apartments because of energy prices. The landlord cannot pay renovation. Forcing landlords to pay an empty apartment penalty doesn't help here.
    scarecrowbob · 1790007478 · focus · HN ↗
    I am not a capitalist, but isn't that the kind of problem that capitalism would solve?
    Wouldn't the landlords would just take a loss and sell the property to avoid penalties?
    Helmut10001 · 1790008172 · focus · HN ↗
    If there is no business model and no one wants to pay, what then? We'd have a lot of vacant properties that would need to be renovated by the city. We see this in lots of places in Germany already, where there simply aren't buyers (because of demographics, primarily). Further, if you devalue properties with such a law, then you'd have a credit/dept property - landlords couldn't pay their dept, if property prices devalue by state law. Lastly, no one would build properties anymore under such a law.
    .. Cities also rely quite a bit on property and real estate transfer taxes. By reducing property values, cities destroy their own tax base while needing lots of additional money to renovate state-acquired, vacant properties.
2. aurareturn · 1789974034 · focus · HN ↗
  They do want to pay landlords, though below current (very high) rates.
  In San Francisco, NIMBYs secretly support laws like this. This basically guarantees that many builders will do the math and conclude that it doesn't make sense to build housing in San Francisco.
  New large condo buildings have to sell 30% of the units at below market rate. This causes many viable projects to never get built.
  So laws like this are sold to renter voters as a way to lower housing costs, but NIMBYs secretly love it. Over time, renters pay more in rent because there is less supply due to builders not building. However, a lucky few renters who were here early will get below market rents.
  Perfect examples of voters voting for a short term fix but pay more in long term. And voting for themselves while screwing future renters.
  1. vrganj · 1789974268 · focus · HN ↗
    The fix is for the city to be the builder, like it is in Vienna.
    The City of Vienna is the largest landlord in Europe. It is also the only major European capital without a rent cost crisis.
    specproc · 1789974488 · focus · HN ↗
    Similarly UK cities built their own housing, up until Thatcher and Right to Buy. Costs spiralled out of control after that.
    Most urgent intervention required in the UK, IMO. We're choking to death on the cost of housing.
    mschuster91 · 1790069697 · focus · HN ↗
    > Most urgent intervention required in the UK, IMO. We're choking to death on the cost of housing.
    Every country in the Western world is. And it seriously hits our economies as well - when companies have to pay wages to match what landlords are asking of their employees, places like China with a massive oversupply of housing are far, far more competitive.
    fileeditview · 1789978093 · focus · HN ↗
    You would think that people could learn from examples. Sadly it rarely happens.
    spwa4 · 1789999520 · focus · HN ↗
    The example here being that they would pay a lot more city tax, never own a home, and over a period of decades this would make rent prices go down.
    If this is what people want, then it seems like the right solution. Short term the only change will be increased taxes and maybe a few lucky renters getting apartments with the number slowly increasing over years and years.
    Which is pretty much the situation in Vienna (rents are low in Vienna, but for the 20% that get city-owned apartments the rents are very low. Quality is ... let's call it "very old", and there's no choice (can't move up if you have a kid, say). Then housing associations pay like 30% more but less than private. Private rents are about double city-owned apartments as they're called. Only way to become a city renter is to earn less than 58000 in a given year, then wait 5+ years).
    MrMember · 1789986346 · focus · HN ↗
    The fix is to let the companies who want to build, build. For some reason a lot of cities won't support new construction if a private company might make a profit on it.
    blahblaher · 1789986648 · focus · HN ↗
    Most private construction is dedicated to luxury condos because that's where the big money is. If you let the "market" decide on its own it will always decide on the most profitable items, even if that's not what is needed.
    vrganj · 1789987018 · focus · HN ↗
    Yes. The market is a great optimizer, sure, but the question is always what do you actually want to optimize for? And that might not always be the same optimization function as a market.
    aurareturn · 1789992192 · focus · HN ↗
    Define "needed". Those luxury condos will still have people living in them whether it's a renter or owner.
    vrganj · 1789993777 · focus · HN ↗
    Well, that's what a democracy should be used to decide, since people might have different things they want to optimize for.
    Personally, I believe Berlin has more issues with a lack of affordable housing than with a lack of luxury condos.
    bluecalm · 1789994600 · focus · HN ↗
    Adding luxury housing helps with supply of affordable housing. Just a few citations I quickly googled: <a href="https://www.sciencedirect.com/science/article/abs/pii/S0094119021000656" rel="nofollow">https://www.sciencedirect.com/science/article/abs/pii/S00941...
    <a href="https://www.sciencedirect.com/science/article/pii/S0094119022001048" rel="nofollow">https://www.sciencedirect.com/science/article/pii/S009411902...
    <a href="https://archive.is/2026.02.23-212725/https://www.theatlantic.com/ideas/2026/02/housing-crisis-rich-poor-building/686086/" rel="nofollow">https://archive.is/2026.02.23-212725/https://www.theatlantic...
    vrganj · 1789998776 · focus · HN ↗
    I'm sure it does, to some extent that is <100%. But the real limit in a city is land. If we want to use it efficiently, we should check what we want to optimize use of that resource for.
    IMO, in Berlin the most lacking thing is the supply in affordable housing, so it makes sense to optimize for that directly instead of a side effect of some other optimization.
    Why not build something like Alt-Erlaa? [0] [1]
    Cities can just build stuff. And if private developers are not as incentivized to invest, that makes it cheaper for the city to do so itself. As somebody from Vienna, it's crazy to me this is even up for debate.
    [0] <a href="https://en.wikipedia.org/wiki/Alterlaa" rel="nofollow">https://en.wikipedia.org/wiki/Alterlaa [1] <a href="https://www.youtube.com/watch?v=MxuACFQBwxs" rel="nofollow">https://www.youtube.com/watch?v=MxuACFQBwxs
    bluecalm · 1790017261 · focus · HN ↗
    >> But the real limit in a city is land.
    I am not sure how it is in Berlin. I haven't visited in a while. I think it's too general an assessment though. In many cities the limit is not land but permits - both being permitted to build at all and then build high enough.
    >>Cities can just build stuff. And if private developers are not as incentivized to invest, that makes it cheaper for the city to do so itself. As somebody from Vienna, it's crazy to me this is even up for debate.
    I hear a lot of good things about housing in Vienna. Are those city build apartments readily available for anyone? The problem with public housing when I am from is that it turns the city population into lucky few who get access and the rest who not only have to subsidize it but then need to buy on private market themselves.
    bluecalm · 1789994439 · focus · HN ↗
    Building luxury condos help with housing market as well. I don't think this is controversial (there are tons of studies that support the conclusion).
    >>If you let the "market" decide on its own it will always decide on the most profitable items, even if that's not what is needed.
    How do you define "not needed"? Businesses will build what they can sell - the very definition of needed. The problem is that it's difficult to build. A lot of cheaper housing projects don't get build because some restrictions (like height, number of apartments, parking places) that are not necessary.
    bryanlarsen · 1790010416 · focus · HN ↗
    Most of the affordable rentals in my city and many others is luxury housing that was built ~100 years ago. They built lots of cheap housing back then too, but it was junk that was torn down a long time ago. The luxury stuff was built better and lasted.
    The affordable housing from ~50 years ago was single family housing and is crazy expensive today.
    We should be building lots of high density luxury condos today. Those are the affordable apartments of the future.
    bruckie · 1790056419 · focus · HN ↗
    It's pretty well established that building luxury condos freeze up lots of other housing at different price points. The person who moves into the luxury condo had to come from somewhere. This video is a pretty good overview of how this works: <a href="https://youtu.be/rQW4W1_SJmc" rel="nofollow">https://youtu.be/rQW4W1_SJmc
  2. nextaccountic · 1789992711 · focus · HN ↗
    There's a way to get yourself out of that gridlock: just subsidize housing. The builder gets money from both the buyer and the government, so he will be happy. The buyer will have low income and wouldn't be able to buy a house otherwise, so he will be happy too. And the government will actually have fulfilled its role for a change.
    aurareturn · 1789996036 · focus · HN ↗
    Subsidizing housing... money will have to come from somewhere - usually the middle class.
    I shouldn't have to subsidize my neighbor's rental just because they chose to live in my city.
    InsideOutSanta · 1790020370 · focus · HN ↗
    I mean, that's how taxes work. I don't have children, and yet I pay for schools. I barely ever drive anywhere, and yet I pay for roads.
    As a society, we decide what we value, and then we pay for it. If you don't like what the group decides, it's your choice to move elsewhere.
    em-bee · 1790032423 · focus · HN ↗
    you are not going to find a city where no such people want to live. or, if you do then forget anyone there wanting to do any minimum wage jobs. because they can't afford to live there. that includes waiters and teachers among many others.
    you could of course pay them more, and everything would become more expensive. might work. but i bet you don't want that either.
    aurareturn · 1790042750 · focus · HN ↗
    If they can't afford to live there, then the rich people living there won't be happy and they'll pay a higher wage to those people.
    snapplebobapple · 1789996064 · focus · HN ↗
    The other, better way is to lower government cost of building by having loose zoning and approving everything that fits the zon*ng fast with minimal expense. The non government cost side you should not be broadly subsidizing (you should be fixing market abuses that drive prices up lile making it disadvantageous to sit on unproductive land but thats a complex side topic)
    iamnothere · 1790001579 · focus · HN ↗
    Georgist-style LVT would also solve the problem, fairly quickly. Many owners would rush to sell to developers or build additional units where space allows.
    em-bee · 1790032113 · focus · HN ↗
    that's what vienna has been doing for a century, and it works. current status is that 2/3rd of any new built housing must be subsidized.
  3. illiac786 · 1790002954 · focus · HN ↗
    Is there data that market rate has zero margin left when it comes to renting?
    Genuinely interested. Where I live, I have received direct reports that there is almost zero margin between building cost and market price (buying). But buying and then renting still has a good ROI, although a longer term one.
    I don’t get it, it goes against the market self regulation, but real estate is very twisted in this respect.
3. fabian2k · 1789974179 · focus · HN ↗
  They are saying that this is what the want to do. They can't do that because it would be illegal.
  This is not just any law, it's in the German constitution (<a href="https://www.gesetze-im-internet.de/gg/art_14.html" rel="nofollow">https://www.gesetze-im-internet.de/gg/art_14.html).
  1. 4gotunameagain · 1789975987 · focus · HN ↗
    The article you linked can be clearly interpreted in a way that would make it possible.
    fabian2k · 1789978584 · focus · HN ↗
    There is no way that paying below market value here would amount to a fair evaluation of the owner's interests.
    698969 · 1789982255 · focus · HN ↗
    If it definitely had to be market value, then the law probably would've been worded differently?
    It says the compensation is determined as a balance of public good and the interests of those affected, so to me it does read like the compensation can be lower than market value so it'd all come down the courts to determine how much below the market value the state can get away with.
4. jttnr · 1789978400 · focus · HN ↗
  To add further context: in 2021, Berlin residents voted in a Volksentscheid on whether the government should compulsorily purchase back housing stock from large private real-estate companies. The proposal received 58% support, but the CDU/SPD coalition in office at the time just ignored it. This now at least partially reflects in the votes. <a href="https://de.wikipedia.org/wiki/Volksentscheid_%E2%80%9EDeutsche_Wohnen_%26_Co_enteignen%E2%80%9C_in_Berlin_2021" rel="nofollow">https://de.wikipedia.org/wiki/Volksentscheid_%E2%80%9EDeutsc...
  1. snehk · 1790000085 · focus · HN ↗
    That's no surprise. Berlin loves free things that others have paid for. They're pretty much the only capital city in the developed world that's a burden and not a benefit to the country as a whole. It's pretty embarrassing. Then they do things like free daycare paid for by other states in the country while those states can't offer it.
    illiac786 · 1790002642 · focus · HN ↗
    So many shocking statements, so little sources…
    I’d almost believe the burden one, but you just piled and made the whole thing sound very emotional and not very objective.
    If you have any kind of stats supporting this, I genuinely would be interested.
    snehk · 1790006869 · focus · HN ↗
    Two claims in my post:
    1) > They're pretty much the only capital city in the developed world that's a burden and not a benefit to the country as a whole.
    <a href="https://www.iwkoeln.de/presse/iw-nachrichten/matthias-diermeier-henry-goecke-usually-an-economic-driving-force.html" rel="nofollow">https://www.iwkoeln.de/presse/iw-nachrichten/matthias-dierme...
    2) > Then they do things like free daycare paid for by other states in the country while those states can't offer it.
    Look up "Länderfinanzausgleich" and then look up daycare programs and compare them. None of the net payers get even remotely the same even though they're the ones actually paying for it.
    Both statements are objectively true.
    illiac786 · 1790013264 · focus · HN ↗
    Ah, thanks for the first one, that’s funny.
    It is more of demonstration how strong other cities in Germany are and how Berlin almost stopped existing (economically speaking) for 70 years than of being a burden in my view, but this is a detail you can throw in any conversation with berlin people to drive them nuts =)
    2/ true example, yes. Then check what Germany pays to get power from the north down to Bavaria. And who pays for this? Unfair all around. I’m of course holding every single Bavarian personally responsible for this.
    I dislike how you generalise from economical examples to the character of berlin inhabitants. It’s obviously wrong but also just not nice.

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