The Left aims to tackle the city’s steep housing costs by seizing around 225,000 apartments held by major real estate firms.
The far-left has regained influence in Berlin, and now there is talk of bringing private housing under public control as well.
On Sunday, the Left Party, steered by Elif Eralp, secured about 25.3 percent of the vote in the state elections and is presently negotiating with the Social Democrats and Greens to form a governing coalition with themselves at the helm.
The surge in Berlin’s housing prices dominated the campaign, and the Left proposes addressing it through a blend of public housing construction, rent controls, and, most controversially, the expropriation of roughly 220,000 homes owned by large real estate firms.
Expropriation “serves the purpose of enabling rent regulation, which we currently cannot achieve with private owners,” Eralp told the Russian-German publication Wir. “This moves these apartments out of speculative flows and out of the possibility of profiting from the housing shortage.”
Eralp has presented this plan as aligning with the will of Berlin voters, 59 percent of whom backed a 2021 advisory referendum calling for the seizure of a quarter of a million flats owned by big landlords.
The previous year, the city implemented a rent cap that produced actual rent reductions for around 300,000 apartments. In 2021, Germany’s Constitutional Court struck down the measure, ruling that the authority to cap rents lay with the federal government.
Berlin’s brief foray into rent control produced the anticipated effects. Rents fell for units under control, benefiting current tenants, but the pool of rent-controlled apartments diminished sharply.
Newcomers to the growing city found themselves forced to search the non-controlled market, where prices surged dramatically.
Eralp has condemned Berlin’s housing shortage as a principal driver of high prices. Yet, expropriation is not a guaranteed solution to that problem.
As German policy specialists noted during the 2021 referendum, government seizures of private property would discourage investment in new construction within the city. The state would also need to compensate landlords for their lost property, which would leave fewer resources available for building new social housing that the Left also seeks.
On the international stage, left-wing outlets have hailed Eralp’s victory as akin to Democratic Socialist Mayor Zohran Mamdani’s election in New York. “First we took Manhattan, then we took Berlin,” proclaimed the socialist magazine Jacobin in a headline.
That comparison is apt, given that Eralp’s housing agenda faces the same tensions as Mamdani’s: attracting private investment to end the housing shortage while simultaneously using ruinous rent controls that push more homes off the market.
Despite voicing concern about a housing shortage, the Left is also resisting a proposal to erect 21,000 apartments near Berlin’s shuttered Tempelhofer Feld airport, according to The Berliner.
Its coalition partners, the Greens and the Social Democrats, are likewise doubtful of the plan.
Germany’s national government, led by Christian Democrat Chancellor Friedrich Merz, announced in July a plan to prohibit state governments from expropriating private housing. Instead, it proposes creating a government-run housing construction firm.
Absent any shift in national policy, the Left will likely find it difficult to implement its aim of municipalizing the city’s housing stock.
Resolving the city’s housing shortage will still depend on private investment. A state administration led by the far left that is determined to wipe out private housing hardly provides an inviting signal for such investment.
