Merz to ban housing expropriation after die Linke win Berlin

Friedrich Merz has announced he will fast-track a nationwide ban on housing expropriation following die Linke’s Berlin election win.

Merz to block Berlin housing nationalisation

Federal Chancellor Friedrich Merz (CDU) has vowed to fast-track a nationwide ban on expropriating residential property. Merz’s announcement comes after die Linke’s historic victory in the Berlin state election on September 20. 

Central to the left-wing party’s campaign was a promise to implement the result of the 2021 Deutsche Wohnen & Co Enteignen referendum. The referendum saw 59,1 percent of voters support a motion to nationalise over 240.000 housing units owned by private companies, but it was never implemented by the subsequent CDU-SPD state government. 

Having won 25,7 percent of the vote in Berlin on Sunday, die Linke now has a renewed mandate to move forward with expropriation plans. Now, Merz has questioned the financial feasibility and said that legal clarity was essential at the federal level to keep the German property market attractive to investors. 

“They’ll never be able to pay for it all,” Merz told a press conference in Berlin. The chancellor said the federal government would now move “relatively quickly” and that Germany’s Justice and Interior ministries were already working on a draft ban. 

Expert panel say nationalisation is realistic

Others say the plan is viable, constitutional and necessary. Appointed by Berlin’s former SPD-Greens-die Linke coalition in 2021, an expert panel assessed the financial and legal viability of the expropriation plan.

In 2023, the panel concluded the purchase would not mean financial ruin for the state government, since it would not have to pay the current market price to buy back the over 240.000 flats. 

More broadly, the panel concluded that if Berlin wants to avoid further housing inequality and prevent more low-wage tenants from being pushed out to the suburbs, no half-hearted solution will ensure permanently affordable rents for lower-income groups.

The panel also concluded that constructing new properties was not a long-term solution to Berlin's housing crisis and would not provide a permanent supply of affordable housing.

Speaking to IamExpat recently, Berlin Tenants’ Association spokesperson Franziska Schulte said recurring warnings against “the consequences of rent regulation and nationalisation - namely a lack of investment, a weakening of the economy and the exodus of private investors” were “striking”.

“After all, private developers are certainly building in Berlin. [...] [T]he crucial question should not be how attractive Berlin is to property investors, but rather: how much affordable housing is actually being created for the people who live in Berlin?”