Ads Top

Berlin: Expropriation plans threaten to fail

Parallel to the elections to the Bundestag and the state parliament, the Berliners also voted on the initiative "Expropriate Deutsche Wohnen & Co." on September 26th. But although the referendum received a high approval rate of 56.3 percent, implementation of the project is by no means certain. The SPD top candidate and election winner Franziska Giffey had already made it clear during the election campaign that she was opposed to the expropriation plans against large housing companies. Through socialization, compensation amounts in the billions would be due, "which will not result in even a single new apartment being built," says Giffey.

As the likely next governing mayor of Berlin, Giffey announced that she wanted to respect the result of the vote. However, it restricted that a legal check first had to be carried out to determine whether a corresponding law could also be implemented. A few days before the referendum, the constitutional lawyer Ullrich Battis had already submitted a legal opinion that he had written for the association “New Paths for Berlin”. The business-related association is committed to building 100,000 new apartments in the medium price segment in order to defuse the situation on the Berlin housing market.

Giffey is against it anyway
In their report, the Berlin professor emeritus and his co-authors from the GSK law firm point to massive legal problems in connection with the Berlin communalization plan. In itself, Article 15 of the Basic Law provides for the possibility of transferring “land, natural resources and means of production” into common ownership. When presenting his report, however, the constitutional lawyer stated that he could “predict with certainty that it will be cashed by the Federal Constitutional Court”. As with the rent cap, the state of Berlin lacks the legislative competence to even enact a socialization law for apartments. Battis and his co-authors see this competence in the federal government. However, the latter has already issued comprehensive regulations in the area of ​​social tenancy law, which concern the same material matter. And the federal states are not allowed to enact laws to regulate matters that the federal government has already regulated by law, according to Battis.

Battis and his co-authors see the principle of proportionality as the very decisive point why the required procedure will fail in court. Accordingly, intervention in private property is not necessary, "since the legislature has a number of other measures available to control the housing market".

For the Federal Constitutional Court, the question of equal treatment could also play a role in connection with the expropriation of large housing companies. The initiators of the referendum “Expropriate Deutsche Wohnen & Co” are aimed at companies with more than 3000 existing apartments in Berlin. The companies concerned can quite rightly argue that this is a completely arbitrary threshold. When presenting the report, Battis also discussed the costs of the project. According to estimates by real estate experts, the mutualisation plan will affect a dozen companies with a total of around 243,000 apartments.

Costs up to 40 billion euros
According to the ideas of the "Expropriate Deutsche Wohnen & Co." initiative, companies should be compensated "well below market value". Against this background, the initiative named compensation costs that range from 7.3 to 13.7 billion euros. Battis argues on the other hand that when determining the amount of compensation, the market value of the real estate should not be "undercut by any amount". The legal scholar referred to seventy years of case law to justify “real compensation”. Accordingly, Battis assumes compensation costs that can amount to up to 40 billion euros.

A concept of the expropriation activists also provides that an institution under public law issues bonds with which the housing companies would be compensated. The bonds are then to be repaid from rental income over a period of 40 years. From the point of view of the experts, however, this way represents a constitutionally inadmissible circumvention of the debt brake. Battis even spoke in connection with the ideas of some actors of an "immense naivety" if contributions from the state financial equalization scheme should be used to "introduce socialism in Berlin".

Powered by Blogger.