In Germany, some of Europe’s largest residential property companies have emerged, which have bought up homes on a massive scale to rent them out as expensive as possible. Tenants and neighborhood activists in Berlin have organized themselves in many neighborhoods to oppose rent increases and eviction. And now they are preparing to enforce a referendum to expropriate the companies.
The Berlin newspaper Tagesspiegel had a survey carried out among residents of the city, which showed that a majority of the residents are in favour of expropriation.
A quote from the newspaper:
“A referendum on the expropriation of Deutsche Wohnen (DW) and other real estate companies in Berlin, which will begin with a collection of signatures in the spring, is supported by the majority of Berliners. 54.8% of the population thinks it is correct “that there are efforts to expropriate landlords against compensation”.
The newspaper writes that “Two months ago the initiative ‘expropriation of Deutsche Wohnen & Co’ has submitted its proposal for a “socialization law” to the city administration (Senatsinnenverwaltung), which is responsible for referendums. The government is now obliged to submit a cost estimate for the required expropriation of all private housing companies that own more than 3,000 homes.”
After the cost estimate of the city council is received, the referendum committee can start collecting the minimum 20,000 signatures needed to allow the referendum to continue. The referendum will then have to be held within two years.
Earlier, the same newspaper had already researched whether the expropriation of real estate companies was legally viable (previously the Berlin residents voted to recall the privatized energy supply. A large majority voted in favour of the proposal, but the referendum narrowly missed the threshold of 25% of the votes to become legally valid (see wikipedia)
According to the experts that the newspaper consulted, the proposal of the referendum group is well organized. If they succeed, more than 200,000 homes would be rehabilitated, all owned by large residential property companies. But they will resist the expropriation with all means available and use the court to challenge the decision.
The group that prepares the referendum explains the background of their project on a website, and elaborate why the expropriation of DW is necessary. Reasons mentioned among other things, are that the housing company lets its property run down and has the sole purpose of making the rents as high as possible.
See also the website of the Tenants of DW.
The large housing companies are increasingly operating internationally. Recently, the German property fund LEG Immobilien was rumoured to be working on the acquisition of approximately 10,000 Dutch rental properties from Round Hill Capital. Other interested parties would be “according to the parties close to the sales process the German investor Vonovia from the German Bochum and the Dutch Orange Capital Partners from Amsterdam”.
Later this message was put into perspective in the real estate media: the deal would not be complete yet. It has been known for some time that Round Hill, which has bought up a lot of real estate in the Netherlands in recent years and is mainly interested in operating student housing, wants to get rid of its property again.
Another known – and in Germany notorious – German massive buyer of houses, is Vonovia, who has already become the largest private house owner in Austria.
In a speech to accompany the annual figures (pdf), last month, CEO of Vonovia Rolf Busch gave a glimpse into their other European adventures, “even if it is only 10% of our portfolio”. He reveals that they have chosen four countries to operate in, one of which is the Netherlands
(“We have identified four markets in addition to our German hom market where we believe it can, not must, make sense to grow because of the significant overlap with the German residential market dynamics. I would exclude all other markets for the time being. But even among these four, we are at very different stages.”)
In addition to Austria, they find France particularly interesting because there is so much “concentrated ownership” (meaning that the social rental sector is in semi-public ownership). However, legal obstacles (read protection from the public sector) prevent them from entering that market. “Any substantial investment would require legislative changes first”. Thirdly, Sweden is a envisioned: “we have good exposure through Victoria Park”. (*)
The Netherlands would be the fourth goal of Vonovia, although they are not really active there yet: “As for the Netherlands, we like the market but we are not actively engaged. If we’re contacted, we’ll take a serious look, but it’s not a focus at this point.”
globalinfo has started an information project on the financialisation of housing as a partner in the Citizens for Financial Justice coalition. A special website has been created for this purpose: globalhousingdebt.org
*) Sweden has completely sold its former well-functioning public housing in the 1990s, which has led to an enormous increase in the inequality (and decay of the welfare state and the adjacent social democracy). See for instance this article in Dutch newspaper Trouw.