Why you should vote against expropriation (Enteignung)
There is a referendum on the ballot in Berlin this year that would legalize the expropriation of certain classes of apartment owners. I would vote against it. But I am not allowed to vote, so all I can do is write a blog post about why I think you should vote against it.
I had a look at the referendum’s website. The quotes in italics are from the website unless otherwise indicated. I left them in German so I do not get accused of bad translations. I wrote my responses in English because it’s easier.
The Background
“Vor allem innerhalb des S-Bahn-Rings kann sich kaum noch jemand die Mieten leisten.”
This is not true. Millions of people live inside the ring. I live inside the ring. Most people I know live inside the ring. I understand that rents are rising. Obviously they are. And it is a problem. But for such an important debate, I find this claim to be exaggerated and lazy.
“Deutsche Wohnen & Co sind hauptverantwortlich für den Mietenwahnsinn.”
Ok, that’s a big claim. Where are the numbers/studies/reports to back this up? I searched the website but could not find anything.
“Mit der Vergesellschaftung wollen wir zwölf Prozent der Berliner Mietwohnungen der Spekulation entziehen und dauerhaft bezahlbare Mieten ermöglichen.”
Ok, 12% is substantial. But is that enough to have a meaningful impact on the other 88%? The mechanism of how this would happen is unclear. No statistics, no studies, only promises with no supporting evidence.
But then there is a shift from numbers into “sending a signal.”
“Mit unserem Volksbegehren wollen wir ein Zeichen gegen diesen Mietenwahnsinn setzen.”
“Ihre Enteignung wäre ein wichtiges Signal – denn die kleinen Miethaie nehmen sich die großen Miethaie als Vorbild.”
Ok, so now it’s about sending a signal. But what kind of signal? To whom? What will the effects be? None of this is mentioned. For a referendum with such enormous consequences, I find it strange that there is very little supporting evidence to back up their claims.
What are profits for?
“Denn von unserer Miete müsste dann nicht mehr der Profit von Deutsche Wohnen & Co bezahlt werden, sondern nur noch die tatsächlich entstehenden Kosten.”
I hate to state the obvious, but: no profit, then no upgrades or maintenance. We have a really good example of this in East Berlin during the DDR. The government did not charge market rates and basically stopped maintaining the buildings. East Berlin was a garbage dump in 1989. The same thing could happen again.
Because let’s remind ourselves: Berlin’s city government sucks at nearly everything. The schools suck, the infrastructure is terrible, construction is a mess. Why would they be any better at managing hundreds of thousands of apartments?
Let’s get to the Grundgesetz articles themselves:
Article 15
Grund und Boden, Naturschätze und Produktionsmittel können zum Zwecke der Vergesellschaftung durch ein Gesetz, das Art und Ausmaß der Entschädigung regelt, in Gemeineigentum oder in andere Formen der Gemeinwirtschaft überführt werden. Für die Entschädigung gilt Artikel 14 Abs. 3 Satz 3 und 4 entsprechend.
In my opinion, it is not at all clear that this applies to housing. And it has never, in the history of modern Germany, been used to take away property. How can the referendum be so confident that they would win the legal argument? Isn’t there a risk that we would have several years of legal arguments before the referendum is declared unconstitutional - just like the government’s attempt to freeze rents for 5 years?
Article 14:
(1) Das Eigentum und das Erbrecht werden gewährleistet. Inhalt und Schranken werden durch die Gesetze bestimmt.
(2) Eigentum verpflichtet. Sein Gebrauch soll zugleich dem Wohle der Allgemeinheit dienen.
(3) Eine Enteignung ist nur zum Wohle der Allgemeinheit zulässig. Sie darf nur durch Gesetz oder auf Grund eines Gesetzes erfolgen, das Art und Ausmaß der Entschädigung regelt. Die Entschädigung ist unter gerechter Abwägung der Interessen der Allgemeinheit und der Beteiligten zu bestimmen. Wegen der Höhe der Entschädigung steht im Streitfalle der Rechtsweg vor den ordentlichen Gerichten offen.
Nowhere does it talk specifically about housing as a right. I read this rather as emphasizing the right to property, as long as the “general good” is maintained. This prevents people from turning their garden into a nuclear waste storage facility.
How much will it cost?
“Artikel 15 Grundgesetz erlaubt es, die Immobilienunternehmen deutlich unter Marktwert zu entschädigen.”
But we just read article 15. Where does it say this? I do not see where. I rather see that it must be negotiated and can be taken to court.
“Diese Entschädigung kann vollständig aus den Mieten der vergesellschafteten Wohnungen finanziert werden.”
But I thought profit was no longer the goal. I thought prices could be decreased? Where will the money come from?
“So kostet die Enteignung die Berliner:innen gar nichts.”
This is ridiculous. Do you know what else will not cost Berliners anything? NOT buying the apartments.
Summary:
I am convinced that there is not a rational argument to take away the apartments. I think it is rather based on a far-left ideology that capitalism is bad and we should punish the rich. Arguments about how it is affordable/can solve problems are kind of just added on to make it more appealing to the masses.
I think the consequences of this would be huge and nearly all bad: the city will be forced to pay an insane amount that could better be spent on other things rather subsidizing the 12% of people who happen to live in those buildings; the apartment buildings themselves would likely degrade over time; no sane developer would invest in Berlin real estate ever again. All of that is really bad.
It’s not that I think rental prices should not be addressed. Rising housing costs are a big issue. It’s just that I think the better mechanism by far to achieve fair housing prices is a combination of building new houses, and rent control (the Mietpreisbremse is awesome).
Communal ownership sounds wonderful. Everyone coming together and managing things for the common good. But we have tried communism over and over again during the past 100 years, in many different contexts and with nearly always the same result.
Capitalism is a really unfair and bad way to solve problems, but I am convinced that it is less bad than the alternative.