The left has long been involved in the fights for the rights of tenants.
Photo: imago/ipon
The timing couldn’t have been better. The “Tagesspiegel” published the first results of the final report of the expert commission on the expropriation of real estate groups in Berlin on Friday. The report considers the expropriation of large real estate companies to be fundamentally possible. In a referendum in September 2021, a good 59 percent of voters voted for the expropriation of corporations with more than 3,000 apartments in the capital. After that, the then red-green-red Senate set up the commission, which has been advising since April 2022 on how the matter can be implemented.
One or the other may have welcomed the results of the commission on Friday afternoon in the Bundestag. At the invitation of the parliamentary group Die Linke, around 50 representatives from science, politics and civil society discussed measures to overcome the current rent and housing crisis. The focus of the event entitled »What to do against Vonovia & Co. at federal level?« was listed housing companies. Even if they only own around 5.2 percent of all rental apartments in Germany, as Knut Unger from the Witten Tenants’ Association calculated, they are a major problem for the entire market.
»Listed companies like Vonovia are price drivers. Their rent increases are around four percent a year, in contrast to around one percent in the national average,« Unger continues. Caren Lay, the spokeswoman for rent policy for the parliamentary group Die Linke, also called Vonovia a “speculator”. An overall strategy is needed to overcome the crisis. Everyone involved agreed on this, but the specific ideas differed.
Vonovia in particular, the largest real estate company in Europe, has been criticized for years. The Dax group, which claims to have around 550,000 apartments across Europe, has been criticized for its business model. The company constantly buys new apartments and objects. In 2021, the group took over the majority of its competitor Deutsche Wohnen. Tenant initiatives accuse Vonovia of rents being too high. The processes involved in operating cost accounting and modernizations are also repeatedly criticized. There was often a dispute because of the high costs that tenants could not understand.
At the same time, Vonovia currently seems to be in crisis. On the one hand, the company drew criticism for its announcement that it would not start any new construction projects for the whole of 2023. Berlin and Dresden are particularly affected. In addition, investments are being held back and the company’s dividends and share value are falling – the latter to just under 18 euros. A few weeks ago, the price was still over 30 euros.
However, the crisis offered the opportunity to intervene, one was certain in Berlin. Tenant activist Unger made concrete suggestions and called for a nationwide rent cap and a nationwide association law. The initiative »Deutsche Wohnen & Co. expropriate« could be a role model here. A special fund is also needed for the housing market in order to make urgently needed investments, to buy or build apartments or to renovate them in a climate-neutral manner. “A turning point is needed on the housing market,” says Unger. The tenants’ association is therefore demanding 50 billion euros from the federal government, the left even 100 billion euros. “What is there for the military should not be missing for apartments,” says left-wing politician Lay. The Bauen-Agrar-Umwelt trade union argued somewhat more cautiously. According to IG BAU, due to Vonovia’s poor prices, the state should become the company’s main shareholder in order to be able to influence corporate policy. The industrial union cited the participation of the state of Lower Saxony in the Volkswagen company as a positive example of this.
But can all these demands be implemented at federal level? The experts in Berlin saw no fundamental objections. For Stefan Klinski from the Berlin School of Economics and Law, it is “quite possible on a legal level to break the power of corporations.” The liberalization of the housing market – such as the abolition of non-profit housing in 1999, the tax reform under Chancellor Gerhard Schröder and the mass privatization of apartments – did not fall from the sky and could therefore be changed again. Business lawyer Klinski proposed a “market access restriction” that would prohibit listed companies and real estate funds from owning rental apartments. According to the scientist, this is legally possible. He received approval from Caren Lay: “Stock exchange companies have no place on the housing market.”
Christoph Trautvetter from the Tax Justice Network also drew attention to tax law aspects that would benefit listed housing companies and that would have to be changed. “Tax law is full of injustices,” says Tautvetter, citing the fact that owners of more than 300 apartments are exempt from inheritance tax, while small owners have to pay tax.
All of these proposals are legally possible, but there is a lack of the political majorities, especially at federal level, to implement these measures. Therefore, at the conference, numerous tenant initiatives exchanged views on how the housing crisis could be resolved, above all through pressure from civil society. The success of »Deutsche Wohnen & Co. expropriate« is a first step that can be used as a guide.