The Far-Left Wins Berlin's Election on the Promise of Seizing Private Apartments
· Reason
The communists have retaken Berlin. Now they want to seize private housing as well.
On Sunday, the Left Party, led by Elif Eralp, captured 25.3 percent of the vote in state elections and is now in talks with the Social Democrats and Greens to form a governing coalition with them at the helm.
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The rising cost of housing in Berlin was a central issue in the campaign, which the Left proposes to fix with a mix of public housing construction, rent controls, and, most radically, expropriation of 220,000 housing units currently owned by large real estate companies.
Expropriation "serves the purpose of being able to regulate rents, which we can't currently do with private owners," Eralp told the Russian-German magazine Wir. "This takes these apartments out of speculation and out of the possibility of profiting from the housing shortage."
Eralp has framed this plan as implementing the will of Berlin voters, 59 percent of whom approved an advisory referendum in 2021 calling for the seizure of a quarter of a million apartments owned by large landlords.
The year before, the city implemented a rent cap that led to actual rent reductions for some 300,000 apartments in the city. In 2021, Germany's Constitutional Court struck down the policy, declaring that the power to cap rents rested with the federal government.
Berlin's brief experiment with rent control had all the consequences one would expect. Rents fell on controlled units, benefiting anyone who already lived in one. But the number of available rent-controlled apartments also plummeted.
Newcomers looking for housing in the growing city had to search on the non-controlled market, where prices skyrocketed.
Eralp has decried Berlin's housing shortage as a major cause of high prices. But one shouldn't expect expropriation to fix that issue.
As German policy wonks explained at the time of the 2021 referendum, state seizures of private property would be a major disincentive to invest in new construction in the city. The state government would also have to compensate landlords for their lost property, which would leave fewer funds available for the construction of new social housing that the Left also wants.
Internationally, left-wing media outlets are hailing Eralp's victory as an equivalent to democratic socialist Mayor Zohran Mamdani's election in New York. "First we took Manhattan, then we took Berlin," reads the headline in the socialist Jacobin magazine.
It's a fitting comparison as Eralp's housing policies suffer from the same contradictions as Mamdani's, who wants to attract private investment to end the city's housing shortage while also using ruinous rent controls to drive more homes off the market.
For all its criticism of a housing shortage, the Left is also opposing a proposal to build 21,000 apartments on the fringes of Berlin's shuttered Tempelhofer Feld airport, reports The Berliner.
Its coalition partners, the Greens and Social Democrats, are also skeptical of the plan.
Germany's national government, led by Christian Democrat Chancellor Friedrich Merz, announced a plan in July to ban state governments' expropriation of private housing. Instead, the government is promising to establish a government-run housing construction firm.
Barring some change in national policy, that will prevent the Left from making good on its plans to municipalize the city's housing stock.
Curing the city's housing shortage will still require private investment. A far-left-led state government dead set on eliminating private housing is hardly an encouragement to provide that investment.
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