A recent study suggests a significant shift in Berlin’s housing policy. Economists propose that expanding public housing could actively temper the city’s rapidly rising rent prices. This measure, however, does not fully resolve the overall housing shortage.
The Institute for Macroeconomics and Business Cycle Research (IMK), affiliated with the union-aligned Hans Böckler Foundation, conducted the study. It explores the economic viability of transferring properties from large housing companies into public or common-good ownership. This strategy could be both socially beneficial and financially feasible.
While new construction remains crucial to address the housing deficit, the study indicates public housing plays a vital role. It can serve as “a useful complementary element” to enhance affordability in the rental market. Therefore, it offers one tool among several for city planners.
Currently, large private corporations in Berlin manage extensive property portfolios. These often include many units across lower and middle-rent segments. Converting these holdings would significantly expand the public sector’s market influence.
Slower rent increases within this new public portfolio would ripple across the city. They would directly impact the local rent index, thereby dampening overall rent growth. Moreover, public ownership could foster social diversity and community-oriented renovations more effectively than private firms do.
Researchers estimate the compensation for transferring approximately 210,000 apartments. This transfer into public hands would cost around 13.5 billion Euro. The foundation asserts that a “well-designed approach” would make this sum financeable without impacting Berlin’s state budget.
Compensation estimates, however, vary widely based on calculation methods. During the election campaign, SPD candidate Steffen Krach cited much higher costs, between 20 and 30 billion Euro. The IMK study acknowledges a broad range, from roughly 10 billion to 36 billion Euro.
The IMK recommends utilizing Berlin’s existing public housing infrastructure for implementation. Properties could transfer directly or via temporary public-law institutions. They would go to the city’s six existing state-owned housing companies.
These companies already manage hundreds of thousands of apartments. They possess the necessary capacity, though it would require expansion. Compensation payments, additionally, could be financed through state-provided equity combined with loans taken by the housing companies themselves.
Politically, the issue remains contentious. The Left Party, which recently won Berlin’s state elections, advocates for such expropriations. By contrast, its potential coalition partner, the SPD, rejects this approach outright. Furthermore, recent antisemitism scandals and controversial contacts within Die Linke could shift coalition dynamics. This might push the SPD and Greens towards forming an alliance with the conservative CDU instead.
