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What Berlin’s radical vote for social housing says about the global battle for affordable cities

The city’s referendum encouraging the government to seize apartments from large landlords is the most visible effort to create more housing outside of traditional real estate markets. Could it inspire more action?

What Berlin’s radical vote for social housing says about the global battle for affordable cities
[Photo: Gerald Schömbs/Unsplash]

In Berlin, rents have more than doubled over the last decade. The city used to be known as an affordable place to live for, say, an artist. But someone earning an average salary would now have to spend more than 60% of their net income to live in Mitte, one popular neighborhood.

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On Sunday, more than a million voters in the city backed a radical referendum: The government should, they say, take apartment buildings from large landlords and turn them into public property, so rents can be kept affordable.

“Berlin is a renter’s city,” says Joanna Kusiak, an urban sociologist at King’s College, Cambridge, who lives in Berlin and studies housing markets, the transformation of property, and the way that social movements use legal strategies. Kusiak is also an activist involved with the campaign behind the referendum. “Eighty-five percent of residents are tenants. Because the housing problem is a universal problem, it has support across all political parties and parties with all kinds of income.”

Rents have been driven higher in part because the city sold off some publicly owned apartment buildings—containing more than 200,000 total units—when it was having financial trouble earlier in the 2000s. Huge landlords now own a growing chunk of the city, most notably a company called Deutsche Wohnen, which owns around 113,000 units. The referendum asks the city to take action only on large landlords that own more than 3,000 units, and could ultimately effect more than 200,000 units across the city.

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[Photo: KP Ivanov/Unsplash]
The concept still faces political and legal hurdles. The referendum was advisory, so the city government, which is now transitioning to a new set of leaders, will have to decide whether to take the next step to create a new “socialization” law to force the owners to sell the buildings.(“Legally speaking, this compensation needs to be below market prices. It’s not state property, it’s not nationalization,” says Kusiak. “It’s socialization that includes the democratic control over the resources.”). But the largest party in the city government has opposed the idea.

Then there are the courts: The basis for the process would be a never-before-used article in the German constitution that says that property may be transferred to public ownership for the public good, with some compensation for the owners. The interpretation the referendum writers used will certainly be challenged. The city’s previous attempt to make housing more affordable by implementing a temporarily cap on rent didn’t last, as the German court shot it down because it conflicted with national law. But activists worked closely with legal experts to craft the proposal and believe that it can stand up. “We’ve done our homework. We know it’s constitutional,” says Bronwyn Frey, another activist working on the campaign.

In the U.S., some cities are also working on their own innovative approaches to housing policy, though none are on this scale or this aggressive. In Los Angeles, the city council proposed using eminent domain to seize an affordable housing complex that was set to raise rents to market rates. In San Francisco, voters passed a proposition in 2020 that taxes real estate transactions over $10 million, so the city has the funds to buy (or build) apartment buildings for social housing. “You have housing where the revenues can be used for the upkeep of the property and not for the profit of investors,” says Dean Preston, the district supervisor in San Francisco who authored the proposition. “And so it completely changes the economics of an operating rental property.” He says that the program will need more federal and state support to scale up, but the tax will generate as much as $200 million a year in San Francisco.

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The Berlin model should be possible elsewhere, says Frey. “I hope that tenants and organizers can really capitalize on this energy,” she says. “I really hope [this campaign] could be an inspiration to other places, where people maybe feel like, ‘Oh, you can’t change things. It’s just how capitalism works.’ I don’t think people should let themselves be convinced that you can’t change anything.”

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About the author

Adele Peters is a staff writer at Fast Company who focuses on solutions to some of the world's largest problems, from climate change to homelessness. Previously, she worked with GOOD, BioLite, and the Sustainable Products and Solutions program at UC Berkeley, and contributed to the second edition of the bestselling book "Worldchanging: A User's Guide for the 21st Century."

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