Berlin’s Housing Crisis Solution is to Buy Houses

Montreal
Not Berlin, but a good city nonetheless.

If you’re like me and was born in the 80s then you’ve lived through a time in which housing policies have been gutted and basically no new public housing has been built. That’s at least 30 years of neglect by politicians and society to literally build for the future; and the future is here. The people of Berlin got tired of a lack of action and have seized the moment to fight back against predatory landowners to ensure that the next generation won’t suffer through such rent-seeking behaviour. Berlin has decided to buy housing (which was organically public housing and privatized in the 90s/00s) to ensure that the people of Berlin aren’t getting ripped off by speculators and greed.

Remarkably, the city’s government has agreed. This month, Berlin’s senate said it would step in and buy three buildings, amounting to 316 apartments. Meanwhile, the local borough of Friedrichshain-Kreuzberg would buy a fourth building containing 80 apartments, meaning the majority of flats for sale will be converted to public ownership.

The authorities could do this through an existing law that allows them a right of first refusal over buildings for sale in areas that are undergoing steep rent rises. The law hasn’t yet been applied on this scale, and even though the city and borough will ultimately recoup the costs from rent, the buyout will require an investment of up to €100 million.

That’s already a major investment—but why stop there? The overwhelming majority of units that Deutsche Wohnen owns today in Berlin used to be public housing, and were sold off by the state over the past few decades. As galloping rents make daily life increasingly difficult, many Berliners are starting to regret such a shift. Sure enough, Berlin Mayor Michael Müller promised last month to buy back 50,000 of Deutsche Wohnen’s units for the city, along lines not yet fully clarified. Renters’ associations want to extend this proposal to all landlords with more than 3,000 apartments in the city, a wish that led to their referendum plan.

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