The federal government has announced that it will pass a law as quickly as possible to ban the socialization of apartments. This is a direct reaction to the electoral success of the Left in Berlin.

“It’s not just about banning something here in Berlin,” assertedFederal Chancellor Friedrich Merz(CDU) on Monday, instead he wanted to send a clear signal to international investors: “There are no expropriations of private property in Germany.” With these words, the Chancellor now announces that he wants to introduce a federal law as quickly as possible that prohibits expropriation.

Despite his assurances that it is not primarily about Berlin, this move can be understood as a direct reaction to the Berlin House of Representatives election on Sunday, in which the Left Party emerged as the winner. The black-red coalition had actually decided to pass such a law in July.

The fact that the Chancellor is now pushing for this plan to be implemented quickly is evidence of a threat that the CDU perceives from the Berlin election. Merz announced that the coalition would now come to a decision “relatively quickly” and that the drafts were already being drawn up in the responsible ministries.

Attack on socialization

The left insists on socialization

On the evening of the election, Left Party top candidate and mayor-elect Elif Eralp emphasized that she was still planning to implement the referendum “Expropriate Deutsche Wohnen & Co”. However, it is still unclear what exactly this implementation should look like. For example, while theDeutschlandfunkEralp himself is correct when he writes about “no willingness to compromise”.more conciliatory tonesto: "Berliners have decided to socialize large real estate groups. Of course we will also have to make compromises, that's clear."

The debate about socialization becomes an open conflict between the Left Party and the CDU, both at the state and federal level. For example, rantsStefan Evers– CDU top candidate in Berlin – against the plans: “In the end, they will lead to job losses, they will reduce new housing construction, they will drive up rents and exacerbate the problem.” Similar arguments can also be heard from other parts of the CDU and CSU, for example from the CSU General SecretaryMartin Huber.

Left leaderLuigi Pantisanoagain accuses the Union of wanting to “decide on an exception for Berlin out of fear of the left”. He also explains that the CDU sets an arbitrary policy for socialization when it comes to affordable housing. However, the Union itself is responsible for the expropriation of land for highways. Above all, he also relies on the 2021 referendum: "The democratic vote of Berliners must not be ignored in order to protect Vonovia's share prices. They will not get away with this."

Rent demonstration in Berlin: “For a city that we shape ourselves”

SPD tipping the scales

The SPD has so far been less present in this debate. This is despite the fact that to a certain extent it is likely to become the decisive player in this issue. The party finds itself in a certain dilemma between the federal and state factions:

On the one hand, the SPD is of course part of the federal government and already approved the plans to ban socialization in July. On the other hand, the Berlin SPD is likely to be interested in becoming part of a red-red-green state government. However, if the SPD parliamentary group were to put a stop to the socialization plans, this would likely make coalition negotiations massively more difficult.

On the other hand, the Left Party also has a certain dependence on the Berlin SPD. Based on the distribution of seats, a red-red-green coalition appears to be the only realistic majority government in the Berlin Senate. Otherwise, only an unstable minority government made up of the Left and the Greens would be conceivable.

So it remains to be seen how far the left is prepared to move away from the socialization of the Berlin housing companies. The fact that this is not ruled out, despite the repeated assurances of Eralp, Pantisano and Co., is also shown by the Left Party's participation in the Senate led by Franziska Giffey from 2021 to 2023. This had delayed the referendum with the participation of the Left.

How radical is the Berlin Left really?

Socialization instead of expropriation

It also remains to be seen what exactly a law banning the socialization of housing groups should look like. While the CDU keeps talking about “expropriation”, such a step is not at all up for debate. Instead, the Left Party wants to socialize the apartments of Deutsche Wohnen, Vonovia and other large corporations and pay these companies compensation in return. These apartments will then be managed by a state-owned housing company.

Contrary to various statements from CDU politicians, this undertaking is both constitutional and financially feasible. To finance this, the draft law of the “Expropriate German Housing and Co” referendum suggests using the income from the rents of the socialized apartments.

So two things remain to be noted: On the one hand, the CDU is scandalizing the Left's plans and portraying them as more radical than they actually are. On the other hand, the Left Party's actual plans will not ensure that housing companies cannot make a profit from their housing business. Real estate prices, which have risen enormously in recent years, will still have to be paid by tenants in the form of compensation.

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