Market (mass) intervention

In a stunning political defeat for rentier capitalism, Berlin voted in a referendum last month for “the socialisation” of 250,000 apartments. Ben Wray spoke to Bronwyn Frey, activist in the ‘expropriate Deutsche Wohnen & Co campaign’, to find out how it happened and what happens next.

Something special happened in Berlin last month. A campaign calling for the expropriation of landlords, who own around 3,000 properties which equates to about 250,000 apartments in the city, took their message to Berliners and convinced them that this radical housing demand was a good idea.

In a referendum held on the same day as the country’s federal elections, 26 September, 1,034,709 Berliners voted Yes to expropriation, 56.4% of all of those who voted. German Chancellor Angela Merkel had described the idea as “not the appropriate remedy for the housing crisis”, while the prospective mayor of Berlin, Franziska Giffey of the centre-left SPD, had said “I don’t want to live in a city that sends the signal that expropriation is going on here.” But the voters of Berlin ignored Germany’s political establishment, and voted for expropriation anyway.

The result is almost certainly the most sensational political defeat for rentier capitalism in Europe for decades. Not only does it show that radical housing demands can win majorities, but it also reveals that the sacred cow of property – that you can demand just about anything except encroaching on liberalism’s most sanctified belief that property rights come before everything else – can be slain.

The campaign began in 2019 with a demonstration of 40,000 through the streets of Berlin, the largest renters march in the city’s history, and involved a huge grassroots organising effort to defeat the big money behind real estate capital’s ‘No’ campaign.

But it’s not over. The vote is not legally binding on the incumbent Berlin coalition government, which is likely to be led by the SPD and include Die Linke (‘The Left’) and the Greens. Campaign efforts are now turning to ensuring the politicians respect the mandate they have been given by over a million Berliners.

To talk about all this, Bella Caledonia spoke to Bronwyn Frey, who is in the Right to the City working group in the expropriate Deutsche Wohnen & Co campaign. We discuss:

02:23: The housing crisis in Berlin

06:01: The evolution of the housing movement in Berlin

09:24: The ‘expropriate Deutsche Wohnen & Co campaign’ on the ground

15:43: Getting the Berlin Government to deliver on the ‘Yes’ vote

20:23: The cost of expropriation

23:27: The international repercussions of the referendum vote

26:53: Effective grassroots politics

Bella Caledonia · Berlin’s vote to expropriate the landlords: interview with campaign activist Bronwyn Fery

Bella Caledonia: Let’s start with the context for the referendum: After the fall of the Berlin Wall, Berlin was seen as a cheap place to live, but much of the public housing was privatised and especially since the financial crash the situation has changed dramatically; Berlin has become very expensive for renters. Can you paint us a picture of how th becoe housing crisis has evolved in Berlin?

Bronwyn Frey: Since the fall of the Wall, neoliberal housing politics is on the rise, not just in Berlin but all over the world. Many big cities are becoming unaffordable. But what’s specific to the Berlin case is that in the 2000’s Berlin sold off almost 200,000 public housing units to real estate investors, consulting groups – a large part of it was sold to McKinsey [the world’s largest consultancy firm] for example. These units were put into the market, and is one of the main drivers of rapidly increasing rents in Berlin.

I think 10 years ago Berlin would have still counted as a renters paradise, but the cost has in some places have quadrupled in 10 years. So for example apartments in Schillerkiez, which is this very cute area by this big park, 10 years ago were like €200 euros a month and now are €900.

BC: How have those changes altered the experience of people living in the city. Gentrification for example often leads to segregation, where communities live almost entirely separately from one another. Have you got a sense of how the culture of the city has been affected by this housing crisis?

BF: I don’t have the best overview of this because I’ve only been living here myself for the past two years, but yeah of course it changes the demographics. During the flyering activities for this campaign I was talking to a teacher who lives in Neukölln [an area of Berlin] for decades, and she was just noticing that she has less foreign students and students from ethnic backgrounds because they are getting pushed out of this area. We are on the trajectory of cities like San Francisco, or in my own city of Toronto, where it just becomes rapidly unaffordable for newcomers all over the world, for artists, for students, and basically the city loses the diversity that makes it such an awarding place to live in in the first place.

BC: Let’s talk about the housing movement and how it has developed in Berlin. I know in 2019 a rent cap was introduced, but that was then struck down by the Constitutional Court in April of this year. Can you explain a bit of the background to this campaign and why the referendum became a key part of the housing movement’s strategy?

BF: I think this campaign is the result of over a decade of tenant organising. There have been other groups that have definitely fed into the expropriate Deutsche Wohnen & Co campaign. So for example there is Kotti & Co, which was centred in this Kreuzberg neighbourhood in Berlin, and lots of really experienced renters groups who have been fighting for a long time.

I think when the campaign really started to pick up steam was when we discovered articles 14 and 15 in the German constitution. Article 14 allows for expropriation – the taking of private property into public ownership – and Article 15 allows for socialisation for the common good – privately owned properties should be governed by the public. Expropriation happens all the time, the government will buy up your house to build a coal mine or a highway or whatever, and publicly run large organisations are not an exception either. The public transport in Berlin for example is organised according to principles that serve the common good.

The rent cap that was implemented by the social-democratic party in 2019, was actually a response to this expropriation demand. The proto-expropriation campaign brought their proposals forward and it was becoming really popular and the Social Democrats, who are definitely more friendly to real estate investment, said ‘no, no, no, we will do our own thing, how about we do this rent cap?’. And the rent cap failed because they didn’t check it was constitutional. So the failure of the rent cap only added fuel to the fire of our own campaign. We have done our research. We’ve asked the research groups of for example the German Parliament, Berlin’s senate administration for city planning, all these research groups have determined that our proposals for expropriation are completely constitutional, so we are ready for this.

BC: The Yes campaign seemed to have been a very well organised grassroots campaign. I noticed that Jane MacAlevey, who is a well known international trade union and community organiser and writer, has been helping to train the campaign on grassroots organising. Can you tell us a bit about how the campaign has organised?

BF: First of all, it’s a huge campaign. It’s organised around a main plenary every two weeks, and then there are different working groups; there’s a working group for figuring out the socialisation laws, a working group for public relations, a working group for managing the neighbourhood teams, and they have their own Telegram chats for organising putting up posters, collecting signatures and doing door-to-door talks. So there’s the working groups and then there’s the neighbourhood structure.

BC: What was key to getting your message across?

BF: One of the basic things is that everyone in Berlin is feeling this existential pressure. Even people who have good rental contracts now feel like they can never move again because if they do they will be moving out of the city. And people coming to the city are searching for months and sometimes up to a year to find a place. So everyone in the campaign has done a really good job of capitalising on that. So there is a really excellent social media team. It’s also a matter of engaging people face to face, collecting signatures there’s people on the streets in purple vests, and that’s a very visible type of branding

BC: In terms of the message of the campaign, to expropriate landlords, it’s obviously a strong message. When you were first trying to talk to people about this, what was the immediate reaction from Berliners to the idea?

BF: When I was collecting signatures for example I would just ask people if they wanted a city with affordable rent for everyone. Of course people want that. Or they had just heard about the campaign already because there was such good media about it. There were people who were against it, for example a lot of people who were in Berlin during the GDR who are suspicious of communism and think socialisation would mean there was less freedom about how to live their lives, which is not at all what this is about; we are not going to say people have to live in this apartment or that apartment or anything like that. So there was some mistrust there.

BC: What about the arguments which the other side of the campaign put forward? I read somewhere that it was quite an arrogant response from real estate capital, where they didn’t feel like they really needed to make their case.

BF: Well I think they do have a lot to prove. Because rents are increasing, and from all of these big real estate companies that we want to socialise, on average €200 a month is just going straight into the pockets of investors, it’s not even going into upkeep. And €200 is a lot of money.

So I think they are definitely on the defensive. I think before we had the referendum, one of the corporate landlords said ‘oh we are just going to have a five year rent freeze on all of our apartments’, and we said ‘no, we are not just going to have a temporary rent freeze and who knows what the rents will be afterwards, we are still going to fight for something that will be a long term affordable solution for the most number of people possible.

BC: The Yes vote in the referendum is not legally binding, and therefore the campaign is putting the onus on the new city-state government to deliver on the mandate of the referendum result. The prospective mayor, Franziska Giffey of the centre-left SPD, has said opposition to expropriation of landlords is a “red line” issue for her when it comes to negotiating a coalition government in Berlin with Die Linke and the Greens. How difficult is it going to be to get the result of the referendum respected and delivered?

BF: I think the more public pressure we put on the incumbent coalition the more successful we are going to be. Giffey did start out saying before the referendum that she had no intention of respecting a successful referendum. The referendum was successful, so her response was ‘we need to check that the constitutional legality of this’. Which is a softening of her positioning – and as she well knows we have checked the constitutional validity of this. And now she wants to set-up this expert commission that will review the legality of expropriation over the next year so that maybe by the beginning of 2023 if the commission has decided its legal then they will think about how to implement it, but this is not what we want. Almost 60% of Berlliners have voted for expropriation now, and we know it’s constitutional, so there’s no way we can accept some kind of unnecessary delay.

So there are demonstrations outside of the coalition negotiation meetings, between the Social Democrats, the Left and the Greens. That will be decided by the end of the year, and the implementation of the socialisation [of the apartments] is also part of these coalition talks. So we are always outside of every coalition talk, we are in the news, we have a very good PR campaign, because we’re seeing that the more pressure we put onto the parties they actually respond to it so we’re definitely prepared to do that and are going to continue to do so. The campaign is also developing a smaller working group that will be part of the coalition talks and report back to the main campaign. So that’s our strategy right now.

BC: The Left supported the campaign from the start, and the Greens didn’t at the start but they have come on board before the referendum vote. Do you expect those parties to make this an important part of agreeing to be part of this coalition?

BF: I think the Left is the surest bet for sure, because they have supported this campaign, also financially, from the beginning and their resources have been invaluable. At the same time they were also part of the coalition back in the 2000s which sold of 200,000 apartments, so we’re not taking anything for granted. So the Greens were also saying before the referendum that they weren’t so in favour of socialisation, but now in more recent public announcements they have talked about the need to respect it and implement it because this is what the majority of Berliners want. So it remains to be seen if they are willing to back up what they are saying with actual plans to deliver it. So that’s the landscape.

BC: One of the arguments of Giffey against expropriation is about the cost. She has said the properties in question have a total value of €30 billion, and that money was needed for other priorities. I know that the expropriate Deutsche Wohnen & Co campaign argues that the cost would actually pay for themselves, based on paying compensation below market-value – because the constitution stipulates you can do that – and using a bond which would be paid back through the rents from the properties over many years. Is that a fair summary of the idea? 

BF: Yeah that’s great, that’s a very good summary of our plan.

BC: Is this convincing people, that it’s possible to do this, that socialising properties can pay for itself? Is that idea widely understood?

BF: I’m not exactly sure what the public sentiment is about that, but you are absolutely right that there is nothing in the constitution which says that we have to pay market-value for these inflated apartment prices.

Also, the City of Berlin, even before the referendum was successful earlier in September, they decided to buy-back almost 1500 apartments at market-value, so if they are worried about the cost effectiveness, we have a plan where this is not actually going to cost the taxpayers of Berlin anything, and I think our plan makes a lot more financial sense than the fact that they sold off these buildings in the 2000s for a pittance and now they are buying them back for however many millions or billions of Euros they are planning to spend. So I think if people are worried about the financial sensibility of our plan for socialisation, I think they should be first looking to the way that mainstream political parties have been handling this so far.

BC: Obviously there has been a lot of international interest in this, because you have shown that it is possible to build a mass movement around radical housing demands that can win the support of the majority in a democratic vote. You’re from Toronto, Canada, and obviously there’s a big housing crisis there too. To what extent is this victory transferable to other countries?

BF: Obviously the political and legal landscape is different everywhere so I don’t actually know if there are provisions in the Canadian constitution for the sort of expropriation that we have planned, or where that might exist in other places in the world. But I think that what other people fighting for affordable housing around the world can take away from this is that you can’t stop fighting. This campaign is the result of ten years of so much experience organising tenants, and now it is finally coming to fruition, that work is totally worth it. Even if for some reason the Social Democrats and their coalition decide not to respect the democratic vote and to not implement this, we’ve already made changes. Berlin has already tried to take away some of the impetus of our campaign by saying they are going to buy back 1500 apartments, so that’s already made material conditions for many people in Berlin a lot easier. I know for example in Toronto, there’s this very cute neighbourhood called the Kensington market and activists have been fighting there for a decade if not longer to make it an affordable place for everybody. And they have had success, preventing a Walmart being built right next to it for example. So I think the main point is for people not to give up. You are not going to win every time, but I think definitely people can learn from how well organised we are and from our social media campaigns, all of that has been very effective. And as we have seen public pressure can really make a difference when it comes to housing politics. So I would just encourage everyone to not just let themselves be defeated by the idea that ‘capitalism just works this way and we are just going to keep our heads above water for as long as we can, it’s not so bad yet’.

BC: I think it’s interesting that you have said that ten years of organising tenants is what has led to this, because sometimes political campaigns are contrasted to grassroots organising as if they are a dichotomy; either you focus on the state and trying to change things at a political level, or you focus on tenant unions and grassroots organising like it’s one or the other. Would it be right to say that the way the housing movement has evolved in Berlin, it’s been the combination of those two things that have given the movement power?

BF: I think that’s a great point. I don’t think that a grassroots organisation should exclude the possibility of working with sympathetic politicians or political parties. Because our co-operation with The Left party has been pretty important to how this campaign has gone.

BC: Finally Bronwyn, what would you say to people who are inspired by what they’ve seen in Berlin and are thinking about how they can build a campaign, what the key aspects of building a campaign are, what would be your main advice from this campaign?

BF: It’s going to be very personal advice because I’m not a main campaign organiser or anything, there’s definitely other people in this campaign you can ask about starting things from the ground up. But for me it’s just been a matter of joining initiatives who’s politics I agree with but then also who seem to have a clear plan for action. So I would just say that I would encourage people in my position, who maybe don’t have so much experience as organisers, to find out which groups are making the most changes in your city or country, figuring out if it’s a good political match for you and then just building solidarity from there.