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For Berlin’s largest landlords, a four-year-old threat just became a real draft law. On 26th September, the Deutsche Wohnen & Co enteignen initiative unveiled legislation that would transfer around 220,000 apartments into public ownership — four years after 59% of Berliners backed expropriation at the ballot box.
"We have succeeded in making the concept of housing socialisation for Berlin directly, immediately and, above all, securely implementable," said Armin Rothemann, the initiative’s co-spokesperson and a lawyer. The draft law, drawn up with Geulen & Klinger, sets out detailed provisions for compensation and implementation. "We have found pragmatic answers that do not burden the budget," added co-spokesperson Isabella Rogner.
The proposal targets only private housing companies with more than 3,000 Berlin units, exempting state-owned, cooperative and religious landlords. Affected firms could retain 3,000 apartments, with the remainder transferred to a new public-law institution.
The compensation model is the initiative’s most radical element. Payouts would be just 40–60% of market value, calculated on building replacement costs while excluding most land-value gains. Total compensation would fall between €8–18bn — €36,000 to €82,000 per apartment unit. Instead of cash, owners would receive 100-year bonds at 3.5%, serviced by rental income. “This is a fair and affordable basis for an orderly and secure transfer,” Rogner said.
For investors, the precedent is stark: compensation far below market value, serviced by 100-year bonds, would reprice Berlin’s landlord risk overnight.
The initiative claims the plan would stabilise rents, as excessive rents would be capped. With Berlin rents climbing 15% year-on-year — far outpacing wages — the promise resonates with tenants. By contrast, Vienna’s vast city-owned housing stock has helped keep rents relatively stable, underlining why investors fear Berlin could choose expropriation over construction.
The political backdrop is one of stalemate. The CDU-SPD Senate pledged to prepare a framework law but missed its own June deadline. Activists accuse it of deliberate obstruction. "The Senate has failed to fulfil this mandate and has deliberately ignored the will of the people," said Rogner. The initiative will now bypass parliament and take the draft law directly to a referendum, where a successful vote would trigger immediate effect.
Governing Mayor Kai Wegner (CDU) welcomed the legal clarity but opposed the plan outright. “Expropriation or socialisation will not create a single apartment,” he said, insisting that courts would have the final word. The FDP staged a counter-demonstration under the slogan “Build instead of steal.”
The legal basis rests on Article 15 of Germany’s Basic Law, which permits socialisation “for the public good” but has never been applied. An expert commission led by Herta Däubler-Gmelin concluded in 2023 that it could cover large housing portfolios, though dissenters insisted compensation should be closer to market value. Extensive litigation is inevitable: the Senate could appeal to Berlin’s Constitutional Court, while landlords may demand higher compensation in civil courts — disputes that could drag on for years.
The law would affect roughly 13% of Berlin’s housing stock, with Vonovia — which absorbed Deutsche Wohnen — most exposed at 116,000 units. In total, ten to eleven corporations fall under the law. For them, the prospect of long-dated bonds at discounted valuations would represent a severe hit to balance sheets and future cash flow assumptions.
REFIRE: The draft now enters consultation through year-end. Signature collection would begin in 2026, with a referendum unlikely before 2027. If passed, Berlin would become the first German state to apply Article 15 of the Basic Law. Whether or not Article 15 survives court scrutiny, Berlin’s housing politics keep capital nervous. Investors may simply look elsewhere.
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