What does the Berlin constitution say

But only the command of reason", emphasized Söder.

Meanwhile, Industry President Dieter Kempf called on the grand coalition to invest more. Kempf told the German Press Agency: "The economy is already stagnating, and the German government has long lagged behind our expectations in terms of the pace of reform. Black and Red would have a large majority to promote Germany as a business location."

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Left parliamentary group leader Dietmar Bartsch called for a reform of the inheritance tax with a view to the new leadership duo of the SPD in case of possible GroKo renegotiations. "Germany is a tax haven for great heirs", said Bartsch the dpa to justify. DGB board member Stefan Körzell also warned in the "New Osnabrück newspaper" (Tuesday) one "fairer" Taxation of large heirs. The employers’ argument that jobs would disappear without legal exemptions for company heirs, said Körzell "pure scare tactics".

Sources used: news agencies afp and dpa

The constitution of Berlin says that people have the right to adequate housing. A referendum should pave the way. The goal: the expropriation of housing groups. What it is about and what alternatives are there.

overview

Rent explosion in Berlin What does the referendum want? What does the Basic Law say? What does the Berlin Constitution say? How does the housing industry argue? What are the chances of the referendum? What costs are expected? What alternatives are there? Where is the Berlin housing market heading?

There is a fire in Berlin. Two cars in the night. A headline, but not an ordinary one, because the burning cars belong to the housing company Deutsche Wohnen. There is hardly any other group that is currently causing such a stir as the large private landlord who has 115,000 apartments in the capital and the surrounding area.

The listed group is repeatedly criticized because of strong rent increases or because of its dealings with tenants. With 1.9 billion euros, Deutsche Wohnen earned six percent more in the 2018 financial year than in the previous year. This year, too, rising rents should ensure higher profits.

Rent explosion in Berlin

But the capital’s housing market has been fermenting for a long time. In recent years rents have risen so sharply that even average earners can no longer afford an apartment in certain neighborhoods. Experts assume that Berlin could develop into one of the most expensive metropolises in Europe.

The initiative aims to put an end to the rising rent spiral "German living & Expropriate co" – at least for large renters of living space. She is aiming for a referendum in Berlin to vote on the compulsory repurchase of larger housing stocks. This primarily concerns rental apartments that were previously owned by state-owned companies.

What does the referendum want?

The collection of signatures for a corresponding referendum is to start on April 6, 2019. The aim is to get companies with more than 3,000 apartments in return for compensation from the owners "socialize". The initiators’ argument: the state has a duty to provide adequate housing. The accumulation of private economic power in the housing sector harms society.

The initiative is aimed primarily at the Deutsche Wohnen Group. Housing groups such as Vonovia or Grand City Property would also be affected by the outcome of the referendum.

What does the Basic Law say?

The initiators of the desire refer to the Basic Law, which under certain conditions allows expropriations or the transfer of land or means of production into common property.123helpme.me

Specifically, Articles 14 and 15 of the Basic Law allow the expropriation of private property "only for the common good". Under Article 14, for example, a piece of land can be expropriated when building new roads, railway lines or in coal mining. Because: property also obliges the owner to act for the common good. If it comes to an expropriation, however, this must be adequately compensated, it is said at the same time.

Basic Law Article 14: Property and the right of inheritance are basically guaranteed by the Basic Law. But it also says there: "Property obliges. Its use should also serve the public good." And further: "Expropriation is only permitted for the common good."

With the aim of socializing companies according to Article 15, however, the popular initiative is breaking new ground. Because: The housing companies should be transferred to common ownership and continue to operate.

Basic Law Article 15: "Land, natural resources and means of production can be transferred to common property or other forms of public economy for the purpose of socialization through a law that regulates the type and extent of compensation."

What does the Berlin constitution say?

The initiators of the citizens’ initiative also refer to the Berlin constitution in their demands. There it says in Article 28: "Everyone has the right to adequate housing. The state promotes the creation and maintenance of adequate housing, especially for people with low incomes, as well as the formation of residential property."

With regard to the size of the housing groups and their economic power, they refer to Article 24: "Any abuse of economic power is illegal."

How does the housing industry argue?

The Berlin housing industry also invokes the Basic Law and the state constitution. However, in their opinion, precisely those oppose the referendum. According to the Association of Berlin-Brandenburg Housing Companies, expropriation from housing groups constitutes an impermissible interference with the freedom of property, which is also guaranteed in Article 14 of the Basic Law. Recourse to the authorization in Article 15 of the Basic Law due to the constitutional limitation of state authority is also excluded.

In addition, so the argument goes, expropriations would not create new apartments, but would damage the investment climate in the capital.

What are the chances of the referendum?

It is not unlikely that desire will get a majority. As a government partner in the red-red-green Senate, the Left has pledged its support. There is also sympathy among the Greens.

What are the expected costs?

According to an estimate by the Senate Administration, the whole thing would cost between 28.8 and 36 billion euros – based on a good 240,000 apartments belonging to larger companies. The initiators of the referendum expect costs of between 7.3 and 13.7 billion euros – depending on which calculation model is used.

The state of Berlin would not have to put this sum on the table in its entirety, but could finance most of it with loans, according to the citizens’ initiative. Assuming an equity share of 20 percent, the share that the state would have to pay for compensation of 7.3 billion euros would be 1.5 billion euros. According to the calculation, the loan could be paid off within a period of around thirty years.

What are the alternatives?

The state of Berlin has a different plan. The governing mayor Michael Müller (SPD) offered Deutsche Wohnen to buy back former GSW apartments that were once owned by the state. Specifically, it’s about 60,000 GSW apartments. The housing company belonged to the State of Berlin until it was privatized due to empty public coffers. GSW has been part of Deutsche Wohnen SE since 2013.

Critics counter that buying the apartments at market prices not only puts a disproportionate burden on the Berlin budget, but also rewards Deutsche Wohnen’s hostile behavior.

But there are also other means: The red-red-green Senate recently advocated the communalization of apartments in the former GDR boulevard Karl-Marx-Allee, which Deutsche Wohnen actually wanted to take over. The Senate helped hundreds of tenants to exercise their right of first refusal and then to pass the apartments on to the municipal company Gewobag.

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Where is the Berlin housing market headed?

In hardly any other German city have rents recently risen as sharply as in Berlin. The rent explosion has various causes: the population is steadily increasing and estimates are that the 3.7 million metropolis is short of up to 300,000 apartments. According to calculations by the Senate, at least 194,000 apartments will be needed by 2030. The deficiency drives up rental prices.

The Berlin real estate market is also a playground for international investors. According to the real estate market report, the record sum of 18.1 billion euros was achieved in 2017 alone. In a current study, Deutsche Bank assumes that Berlin could become one of the most expensive European metropolises. Much speak for one "Super cycle" – So rising rents and purchase prices far beyond 2020.

Sources used: Citizens’ Initiative "German living & Expropriate co"Federal Ministry of Justice and Consumer Protection News Agency dpa, AFP, ReutersAdditional sourcesShow less sources

In the dispute over the planned property tax reform, the SPD wants to prevent higher burdens for tenants. To this end, the party also wants to change the Operating Costs Ordinance and prohibit the apportionment of property tax on rents.

The SPD finance politician Carsten Schneider has spoken out in favor of a new regulation with which the property tax may no longer be added to the ancillary rental costs in the future. In conversation with the "Rheinische Post" The parliamentary manager of the SPD parliamentary group recommends changing the operating costs ordinance in addition to the property tax reform and prohibiting the apportionment of property tax on rents. In future, Schneider demands that the levy should be borne solely by the owner. He is reacting to a warning from the Bavarian Prime Minister Markus Söder (CSU) about rising rents due to a higher property tax.

Avoid tax and rent increases

In the search for a compromise, the CSU boss had spoken out in favor of avoiding major administrative expenses: "We don’t need 2,000 new tax officials just for property taxes, I’d rather spend the money on police officers and teachers. And of course we have to avoid tax increases – and thus rent increases. Because the property tax is immediately passed on to the tenants."

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According to a decision by the Federal Constitutional Court, the property tax must be reformed. At the beginning of February, the federal and state governments agreed on key points. Even then, Söder was critical of this. According to the key issues paper, a model should be aimed for in which the property values, the age of buildings and the average rental costs are used. Bavaria, on the other hand, had advocated the unbureaucratic tax calculation possible based on area only.

Sources used: dpa news agency, rtr

Because a Berlin initiative wants to socialize apartments, critics warn against socialism. But that is not imminent – for several reasons.

Some things usually appear together in Germany: lightning and thunder, for example, or dumpling and sauce. But also expropriations and socialism. Someone says "expropriation"Experience has shown that someone will say soon afterwards "Socialism!". Many people are currently talking about expropriations again. The reason is an initiative in Berlin with the bold name: "German living & Co expropriating". 

The "German living" is a housing company that owns more than 100,000 apartments in Berlin alone. A large part of the apartments, so the initiators of the action demand, should be communalized. This is to break the power of the big housing companies. The activists hope for an end to constantly rising rents.

You started a referendum and are now collecting signatures. There is resistance to this. When Greens boss Robert Habeck said at the weekend that he thought expropriations were conceivable if necessary, that heated up the discussion again.

A few weeks ago, for example, the candidate for the chairmanship of the Junge Union, Stefan Gruhner, warned that Berlin should not be allowed again "Capital of socialism" will. The Bavarian Prime Minister Markus Söder said expropriations from housing companies were one "socialist idea". The AfD member of the Bundestag Kay Gottschalk tweeted: "Those who demand expropriations are against the Basic Law."

A look at the legal situation, constitutional reality, the Berlin budget and political majorities shows, however, that socialism is not just around the corner. Because expropriations do not violate the basic democratic order of the Federal Republic. Because there is no political majority for the push in Berlin. And because Berlin probably couldn’t pay him.

The legal situation: expropriations are in the Basic Law

Expropriations are not only allowed in Germany, they are even explicitly mentioned in the Basic Law.