Berlin plans apartment expropriation under coalition agreement

Over 144,000 apartments hang in the balance in Berlin under a proposed municipal socialization plan that could trigger more than 11 billion euros in losses for these companies, according to calculations published by the Financial Times.

Elif Eralp Pursues Property Socialization After September 21 Election Victory

Elif Eralp, candidate with the Linke, won the September 21 election running on a platform heavily featuring the German term Enteignung, or expropriation, as a remedy for severe urban housing shortages. The local Senate estimates that housing demand in the German capital exceeds supply by 100,000 residential units. Following the election, Eralp’s party entered coalition talks with the Social Democrats and the Greens to address soaring rents and a shrinking pool of rent-controlled apartments.

Coalition Partners Agree to Target Landlords Holding Over 10,000 Units

On October 17, three left-leaning parties signed a coalition agreement to govern the city-state, committing to discuss the nationalization of roughly 140,000 apartments under a previously unused clause of the German Constitution. The proposed legislation targets real estate firms possessing more than 10,000 apartments in Berlin, requiring them to transfer excess units to the public sector. Major corporate landlords include Vonovia, Europe’s largest property owner, alongside Deutsche Wohnen, Ado Properties, Akelius, and Grand City Property.

Financial Stakes and Constitutional Hurdles Face 2028 Legislative Timeline

According to Financial Times calculations, compensating companies at rates well below market value could impose losses exceeding 11 billion euros compared to book values. The coalition parties project a maximum public outlay of 16 billion euros, translating to an average compensation of slightly over 100,000 euros per apartment against an average value of 170,000 euros. The legislative process is scheduled to conclude by 2028.

The expropriation proposal originates from an April 2019 citizen signature campaign that demanded the public sale of holdings from any firm owning more than 3,000 apartments. That effort culminated in a September 2021 popular referendum where 59.1% of Berlin voters supported the initiative. While that referendum did not become law, it shaped the platform of the Linke, which secured a victory in the autumn elections.

Friedrich Merz Opposes Intervention Over Investor Confidence Concerns

Friedrich Merz has publicly opposed the measure, arguing that government intervention threatens investor confidence. Legal experts and observers note that Article 15 of the German Constitution, which provides the theoretical basis for socialization, has never been applied in this manner. Critics also question the economic viability of the plan, pointing out that expropriations do not immediately generate new housing units and that compensation payments alongside prolonged legal defense costs represent substantial expenditures for the Berlin municipal government.