Faced with a growing affordability crisis, Berlin will this month ask voters to consider a radical housing decision: whether to evict the city’s biggest landlords and move 240,000 rental units into public ownership.
After collecting around 350,000 signatures, Berlin housing activists held a referendum on 26 September to coincide with Germany’s national and state elections. Voters will be asked whether the city should implement a rarely used article of the German constitution for 3,000-owned corporate landowners. More units, including the country’s largest, Deutsche Wohenen, and Stockholm-based Acelius, which also owns properties in Montreal and Toronto.
Even if the referendum passes, the forfeiture will still face many political and legal challenges. But the campaign is shedding light on the global rental-affordability crisis, which is sweeping Canada, where party platforms have focused largely on home ownership ahead of Monday’s federal election.
“Every city is experiencing this rapid rise in housing costs – especially for renters,” said Leilani Farah, the former Ottawa-based United Nations Special Rapporteur on the Right to Housing, now a housing company called The Shift. Runs research and advocacy groups. The Berlin referendum, she said, “provided a vehicle for it to become a public conversation.”
It’s been a little over three decades since the German city was divided by a wall symbolizing the Cold War, with state-owned apartment blocks depicting Communist East Berlin. Although the first years after the city’s reunification were once described as “cheap but sexy”, Berlin’s appeal as a global capital has provided it with a swath of new citizens, fueling demand. that the rent has increased.
The city’s average rent has doubled since 2008, according to a housing-search provider Immovelt.de. “This is a problem for renters, because their rent pays not only for buildings, but for dividends to shareholders,” said Jonas Becker, a spokesman for the group behind the referendum, Deutsche Wohen & Co.
The campaign’s red and yellow signs, along with advertisements for candidates seeking seats in Germany’s next government, are scattered across Berlin. Mr Baker spoke with this month as thousands marched through central Berlin to protest rising rents, many of them wearing vests and carrying flags of the same colour.
Berlin sold 200,000 units of public housing in the first 25 years after the fall of the Wall, and after the financial crisis of the late 2000s corporate landlords began to take an increasing interest in the city, as many investors diversified into new asset classes. were bringing.
Mr. Baker said he pays the equivalent of $30 per square meter for his apartment in the northwest of the city. The campaign, which has more than a thousand volunteers, is calling for Berlin to set a rent price of $6.05 per square meter for new public housing if the referendum is successful.
Joanna Kusiak, a referendum campaigner and researcher at the University of Cambridge who studies progressive housing movements, said the campaign is unprecedented globally. “You have a grassroots initiative that is trying to leverage a national legal framework to tackle the global financialization of the housing market,” she said.
Success will not come easily. The campaign believes the government should buy the units for about $15 billion, but the city has said it could cost as much as $54 billion – closer to the market value of the units. As proposed, the purchase will be covered by a loan, which can be paid for through rental income.
And although the city government last year put a five-year rent moratorium on hold, it was struck down by Germany’s top court in April, finding the decision violated federal law. If passed, the forfeiture referendum could face similar challenges.
Jakob Hans Hien, a Berlin lawyer representing some commercial landowners, pointed out that the constitution of Berlin lacks forfeiture measures similar to those of Germany, which could throw a successful referendum into judicial disarray. And forfeiture, he said, is usually a last resort; It may be easier for the city to buy stake in companies that own units instead.
The political and legal wrangling to comply with confiscation, Mr. Hien said, “will create chaos, deepen our problems and will not help at all.”
But even if the referendum’s biggest ambitions don’t come to fruition, Ms Farah said, the results could force governments to react more strongly to the rental crisis: “When movements are more radical, it is the politicians. pushes it.”
Asked to comment, Deutsche Wohenen made a statement arguing that Berlin’s biggest housing issue is short supply, not concentrated ownership of existing units.
Most cities in Canada are designed very differently than Berlin, with a greater emphasis on single-family homes than mid-rise apartment buildings. Still, as of 2018, one in four Canadians was a renter, Statistics Canada said, and according to a recent Canada Mortgage and Housing Corporation report on income inequality, the price of a two-bedroom apartment doubled between 1992 and 2016. .
Declining housing affordability has left many Canadians without homes, leading to the encampment of public spaces in cities such as Toronto and Halifax, which has led to tense, sometimes violent clashes with police and few long-term solutions from local politicians. has prompted.
Yet Canadians will have few choices as Berliners go to the polls on Monday.
The Liberals have promised affordable housing investments, a rent-to-own program and “policies to prevent excessive profits” for corporate landlords. Reviewing the tax treatment of corporate landlords, he has also promised incentives to convert office space into rental accommodation. The Conservatives, meanwhile, are pledging to offload at least 15 percent of federally-owned real estate to housing, while making it easier for landlords to donate their assets to land trusts for affordable housing.
All three major federal parties have pledged to build or repair a million or more new units—of which the New Democrats say at least 500,000 will be affordable homes. The NDP also promised to introduce incentives to encourage the construction of affordable housing while making mortgages more flexible for first-time buyers.
Still, Ms Farah, whose research focuses on housing market financialization, called the platforms “heavy” with “a lot of emphasis on home ownership”.
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