Coalition agrees: Federal government wants to ban expropriations of housing companies

Chancellor Friedrich Merz (CDU) said Thursday morning that the coalition would pass a law "das Enteignungen von Wohnungsbaugesellschaften verbietet". The plan would eliminate uncertainty for investors. The debate had attracted attention internationally "im negativen Sinne". Federal Minister of Construction Verena Hubertz (SPD) had already positioned herself against the Berlin plans about two weeks before the coalition decision and declared that the ongoing debate alone was creating uncertainty in housing construction.

Reactions from politics and associations

The Minister also justified her position on substantive grounds: "Vergesellschaftungen schaffen keinen neuen Wohnraum." From the federal government's perspective, a newly established housing construction company for affordable housing (WBG) should instead ease the bottleneck on the housing market. The WBG should "den sozialen Wohnungsbau sowie den industriellen Hochlauf seriellen Bauens unterstützen und insbesondere in Regionen mit nachgewiesenem Wohnungsmangel tätig werden". Its goal is, "vermehrt Wohnungen im bezahlbaren Preissegment zu bauen, wo der Wohnungsmarkt auf Dauer nicht ausreichend bezahlbaren Wohnraum bereitstellt."

Approval came from the CSU. CSU leader Markus Söder welcomed the move as "klare Absage an alles, was Sozialismus und Verstaatlichung betrifft". In Berlin itself, the black-red Senate of CDU and SPD had so far not implemented the 2021 successful referendum "Deutsche Wohnen & Co. enteignen". At the same time, the initiative Deutsche Wohnen & Co. enteignen (DWE) is preparing a new referendum through which a socialization law is to be decided directly by the voters.

The federal government is not alone in its plan: already on 11 June, the Conference of State Ministers of Construction had passed a resolution by majority calling on the federal minister to examine legislative measures to sustainably secure investments on the housing market. This gave the coalition's line backing from the federal states.

Outlook on the Berlin election

Politically, however, the issue remains contested in Berlin. The Left and the Greens have announced that they want to implement the 2021 referendum should they be involved in a government after the September election to the House of Representatives. The DWE initiative argues that socialization would relieve households because corporate profits would no longer have to be co-financed by tenants.

Housing construction company as an alternative

With the announced federal law, the federal government would, however, significantly restrict the legal basis for such state-level socialization. This points to a direct clash between the federal and state levels that is likely to have a signal effect for the entire German housing market beyond the Berlin debate.

At the same time, the coalition is pursuing an investment-oriented approach with the planned WBG. The federal housing construction company is to become active in regions with proven housing shortages and primarily build affordable housing there. Whether this instrument is sufficient to alleviate the lack of affordable housing in major cities is, however, disputed in expert debate.