Yahoo Finance Germans protest against 'rent insanity' demanding government seize apartments from property firms
Tens of thousands of angry renters gathered in the streets of German cities on Saturday to demand that the government take action against huge rent increases by big real estate companies.
The Expropriate Deutsche Wohnen & Co initiative started a petition insisting the government take action against publicly listed Deutsche Wohnen, which owns 111,500 apartments in the German capital; US investment group BlackRock has a 10% share in the company. Vonovia, the second-largest property-rental business, owns 44,000 apartments.
Organisers of the initiative are demanding that the city government purchase apartments from any real estate companies that own more than 3,000 units. Chancellor Angela Merkel’s spokesman Steffen Seibert said at the government’s press conference on Monday morning that the answer to the housing crisis was not expropriation, but to address the need for affordable apartments.
While leasing an apartment in Berlin is still relatively cheap compared to New York or London, the average rents have doubled in the past 10 years. A recent survey by German mortgage bank Berlin Hyp and real estate firm CBRE Berlin found that the average rent in the city now exceeds €10 per square meter.
German author Paul Alfred Kleinert, who has lived in Berlin’s Kreuzberg district for 33 years, said rental pressure on tenants keeps rising.
“There’s a massive sell-off happening in this city,” Kleinert said “Entire streets have been purchased by Japanese, Norwegian, or American consortiums.”
Deutsche Wohnen chief executive Michael Zahn told the Associated Press that expropriation “won’t create a single apartment” and “will bring no relief to the worryingly tight housing market in the capital.”
Politicians across the spectrum are staking out their positions on the issue. Most of them say that expropriation would not solve the housing shortage and that the situation can only be helped by building new apartments. Annegret Kramp-Karrenbauer, who took over from Merkel as head of the Christian Democrats (CDU), is against expropriation, as is her government coalition partner the Social Democrats (SPD). SPD leader Andrea Nahles told Bild newspaper over the weekend that there should be a freeze on rent prices for the next five years.
Greens Party head Robert Habeck told Welt am Sonntag newspaper that expropriation was a good idea as a last resort. Before that stage, Habeck said, the government should curb property speculation and tackle the rampant housing shortage.
The citizens’ petition needs to get 20,000 signatures to force the government to respond. Germans could also force a referendum on the housing problem if they amass 200,000 signatures by February next year.
