Rental activists want their homes nationalised

A referendum in Berlin next month is being watched closely by rental activists in the UK, in case it offers them inspiration to fight back against what they claim to be high rents.

The referendum, prompted by a petition created by rental activists but with over 350,000 signatories, would harness a little-used part of the German constitution to effectively nationalise apartments in the German capital which are currently privately-owned.

If it passes, the largest private landlords - which in Berlin own thousands of units - would be forced to sell to the city council at a “fair” price.

Unlike in Britain, and most of the western world, Germany has imposed sharp rent controls in major cities, prompting many Berlin landlords to sell up; the Financial Times has reported that even with the controls, rents have risen an average 43 per cent since 2015.

Also unlike Britain, the heavy majority of households in Berlin - over 80 per cent - live in rental accommodation; across Germany as a whole, the rental proportion is 50 per cent.

And while Build To Rent remains a small niche in the UK, the Business Insider publication reports that in Berlin some 200,000 rental units have in the past three decades been snapped up by private equity firms, making them the largest landlords in the city.

In a possible foretaste of what may happen in parts of Britain which impose rent controls, the FT reports that in 2020 over 19,000 private landlord units have been sold, mostly by small scale landlords to owner occupiers, making the situation worse still for renters.

Over the course of the previous decade, no fewer than 125,000 private rental apartments have been sold into the owner occupation sector.

The FT concludes its analysis of the situation by saying this: “Berliners might find striking a blow against private landlords a source of catharsis. It will not, however, solve the underlying problem: a lack of housebuilding and relatively low wage growth over the past few decades. Tackling these problems, not only in Germany but elsewhere, is the key to fixing housing markets.”

The referendum is to be held on September 26; its result is not legally binding on elected politicians.

You can see two FT articles on the subject here and here.

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