Expropriation as a radical housing alternative
The Week in Housing 07/06/24
This week I’m delighted to bring you a guest post by Cora Saxenberger, a research assistant at the School of Social Policy, Social Work and Social Justice (UCD). I’ve been working with Cora on some research into the PRS internationally over the past few months. Here she looks at one of the most fascinating contemporary housing movements, and one which surprisingly little has been written about in English: Deutsche Wohnen & Co. Enteignen.
Activists looking for radical alternatives to the current state of PRS housing could do worse than look to Berlin’s mass movement for the expropriation of corporate landlords. In 2021, German politics was rocked by the passing of a radical referendum in Berlin calling for the expropriation of hundreds of thousands of rental housing units owned by corporate landlords. This seismic event in housing politics raises the possibility of the radical redistribution of housing as one way to respond to the housing crises that are increasingly common across Europe.
In Berlin, housing and financial corporations, such as Deutsche Wohnen, Heimstaden, Vonovia, and Covivio, own many rental properties (over 250,000 apartments, around 15% of Berlin's private rental sector), especially ones that used to be publica and social rental housing. For these corporate landlords, housing is a storage for capital and a tool for speculation. They also exert significant influence over rents in the neighbourhoods in which their properties are located by driving up rents on their properties.
Deutsche Wohnen & Co Enteignen (‘Expropriate Deutsche Wohnen & others’, henceforth DWE) is a movement striving to transfer formerly public housing that is now in the hands of these corporate landlords back into public ownership. It aims to tackle the housing crisis (rising rents, limited supply) at its roots, reshape property relations within the city, and to give people an avenue through which to shape housing politics, instead of just reacting to them. DWE was born from existing activist movements in Berlin concerned with rising rents and utility prices, gentrification, and the privatisation and financialization of housing, as well as ecological movements.
Even though the expropriation of these rental properties may sound like a radical measure (certainly more radical than a rent cap, a measure that was deemed unconstitutional in 2021 after the Berlin senate tried to implement it), it has a strong legal basis in the German constitution. Article 15 of the German constitution states:
For the purpose of socialisation, land, natural resources, and means of production can be transferred to public ownership or other forms of public economy through a law that regulates the type and extent of compensation. (My translation)
Additionally, Article 14(3) of the constitution clarifies that:
Expropriation is only permitted for the public good. It may only be made by law or based on a law that regulates the type and extent of compensation. The compensation must be determined by fairly weighing up the interests of the general public and those involved. (My translation)
Therefore, the German constitution permits the socialisation of land, means of production, and natural resources for the common good if the previous owners are adequately compensated. Even though this article of the constitution has never been used before, and therefore has no legal precedent, it provides legal ground for the expropriation of properties from corporate landlords.
DWE has drawn up several models detailing how corporate landlords could be compensated in case of expropriation. These models consider factors such as the number of properties being expropriated and the balancing of interests between corporate landlords and the broader societal good. While they each differ slightly, the underlying logic is that compensation should be at below market prices. One model proposes the funding of compensation, management expenses, and upkeep exclusively through the (lower) rents paid by tenants in the collectively managed properties. This would naturally result in relatively low compensation payouts to corporate landlords. Other models focus solely on compensating for the land value of the properties, while some also factor in elements such as inflation. There is even a suggestion that a symbolic compensation as low as €1 could be feasible. While the debate continues on these different models, DWE emphasises that the final model must not permit rent increases in the commonly owned and managed properties.
Should the expropriation be successful, what happens with the properties is determined by two crucial principles of the DWE campaign: Vergesellschaftlichung and Gemeinswirtschaft, describing, respectively, the the form of ownership/management and the purpose of the properties.
Vergesellschaftlichung (socialisation/transferral into common ownership) refers to the public or common ownership and management of the properties. The expropriated properties are to be commonly owned and democratically managed. DWE explicitly refers to this as a political tool to give the citizens of Berlin more political influence and meaningful ways to actively manage and shape their own cities. DWE has drawn up several political structures to facilitate the management of the properties, but is still working on developing more detailed plans. Nevertheless, they aim to create a system that combines direct citizen participation with representation through district councils. Decisions are to be made as decentralised and as close as possible to the affected communities. DWE also plans on creating a new, independent institutional body tasked with monitoring the management of the properties. Additionally, to avoid exclusivity, not only the tenants' interests are to be represented but also those of other citizens of Berlin who do not live in expropriated properties.
Gemeinswirtschaft (common administration) refers to the purpose according to which these properties will be managed. DWE strives to manage the expropriated properties for the common or social good of the residents and the city of Berlin. Within the properties, they aim to create affordable living spaces for current and future generations, encourage housing construction, give space to small businesses, and create child and youth centres, art spaces, and spaces for political groups. They also plan to offer decentralised accommodation for refugees, create (domestic) violence shelters, foster accessible living, and prevent evictions and homelessness. They emphasise ecological and environmentally sustainable politics, the use of renewable energy, a focus on social politics, the elimination of discrimination, and the blockage of future privatisation. Therefore, DWE’s approach balances local, social, and tenant interests in their realisation.
The rationale behind these management and ownership values is described as an economy of solidarity, an opportunity to envision more equitable and sustainable ways of distributing housing and political power in the city of Berlin. Therefore, efforts are both pro-systemic (since they actively engage with the legal possibilities within the existing system and attempt to create new public institutions) and anti-systemic (since they aim to radically reform larger capitalist structures).
So far, the initiative has received widespread support from various stakeholders, such as trade unions and tenant unions, ecological movements, and local businesses, as well as from the majority of Berlin citizens, according to DWE’s surveys. DWE brought their idea before the Berlin senate in the form of a referendum which, after several rounds of collecting signatures, and repeatedly surpassing the required numbers, was held in September 2021. 59,1% of votes supported the expropriation campaign. Therefore, the Berlin senate was required to take measures to facilitate expropriation and socialisation, a task which was assigned to an expert commission.
The DWE campaign has been very critical of the new centre-right Berlin government, which they accuse of failing to fulfill its democratic duty (since the senate did not make any efforts to facilitate expropriation and socialisation of corporately owned rental properties). Therefore, in September 2023, DWE decided to re-start the process for a referendum, this time with an already formulated legislative proposal which the citizens will decide on directly. However, as of May 2024, they are still working on the formulation of said proposal and no specific date for a new referendum has been presented yet.
DWE’s efforts are made possible and realisable due to a law specific to the German context – a law that may not exist in this form in other countries. Nevertheless, the efforts and success of DWE are an important example for local grassroots movements breaking the power of global capital through local possibilities and local laws. This presents a significant change in the global imagination about what is possible and the tools local activists can use to challenge global issues. As an example of a practical realisation of ‘Think Globally, Act Locally’, DWE offers both inspiration and motivation to other (local) movements to seek solutions in places that are not immediately obvious - whether they are concerned with property relations, housing crises, or other social issues.
Events & News
On June 26th (10:00am at the College of Anaesthesiologists, Merrion Square) Threshold will launch their latest annual Tenant Sentiment Survey. Focus Ireland are launching a report on June 14th presenting a decade of data on homelessness. Two reminders: Clúid Housing have opened applications for this year’s Simon Brooke award, and the video of my #SimonTalks webinar is now available to watch.
What I’m reading
As today’s post relates to the financialization of formerly public/social rental housing, here is a short bibliography of the English language literature relating to this topic, covering the two relevant countries: Germany and Sweden:
Grander, M., & Westerdahl, S. (2024). Financialization the Swedish way: How Vonovia became the largest owner of former public housing estates through transaction pathways and calculative practices. Journal of Urban Affairs, 1-19.
Gustafsson, J. (2024). Renovations as an investment strategy: Circumscribing the right to housing in Sweden. Housing Studies, 39(6), 1555-1576.
Wijburg, G., & Aalbers, M. B. (2017). The alternative financialization of the German housing market. Housing Studies, 32(7), 968-989.
Fields, D., & Uffer, S. (2016). The financialisation of rental housing: A comparative analysis of New York City and Berlin. Urban studies, 53(7), 1486-1502.