Berlin's expropriation referendum: five years of delay, one autumn to decide

Five years ago, 59% of Berlin voters backed the socialisation of housing stocks held by large private landlords — those owning more than 3,000 apartment units. The Senate has blocked implementation ever since. Now, with House of Representatives elections scheduled for 20th September, the "Deutsche Wohnen & Co. Enteignen" initiative is pushing for a binding legislative referendum that would force implementation immediately if passed. The debate Berlin's political establishment hoped to manage has become the defining issue of the campaign.

The initiative's escalation reflects five years of frustration. Activists accuse the Senate of deliberate obstruction and have responded with their own draft bill. If their legislative referendum succeeds, the law would come into force without further political mediation. No date has been set, but the threat alone has reignited a debate that cuts across every party in the city.

In March, the Berlin House of Representatives passed a Framework Act on Socialisation. The act defines the conditions under which socialisation under Article 15 of the Basic Law would be permissible — but it does not permit expropriation under Article 14. It will not come into force until two years after promulgation, deliberately creating space for constitutional review by the Federal Constitutional Court.

Uwe Bottermann, partner at Berlin-based property law firm Bottermann::Khorrami, broadly welcomes the structure but flags four areas that remain legally unresolved: the criteria for establishing public interest, the design of new organisational structures, the compensation methodology, and fiscal sustainability safeguards. Without greater clarity on these points, the Constitutional Court will have limited material to work with.

The political fault lines

The CDU and FDP have rejected socialisation outright — the CDU calling the initiative's draft bill "irresponsible hara-kiri", the FDP warning of "risks running into the billions." The Left Party has drawn a firm coalition red line. Rouzbeh Taheri, co-founder of the Deutsche Wohnen & Co. Enteignen campaign, is standing as the Neukölln Left's top list candidate for the House of Representatives. His position is clear: "There will be no governing coalition involving The Left that does not immediately begin implementing the referendum." The Left's candidate for Governing Mayor, Elif Eralp, has said the same. For the Left, socialisation is not a negotiating chip — it is the condition of participation.

The SPD is in a more uncomfortable position. Publicly, it is seeking to deflect expropriation pressure through regulation — rent freezes, tighter Mietspiegel enforcement — rather than outright socialisation. But its internal position paper has alarmed property lawyers. Bottermann describes it as pointing toward "a state-directed economy based on need", including potential bans on property sales, profit caps for housing companies and social quotas in tenant selection. "The party is aiming for nothing less than a comprehensive abolition of property rights without formal expropriation," he says. The Greens have been deliberately vague, promising to "push forward" the existing referendum while saying little about the new vote.

What is at stake for investors

The practical consequences extend beyond whether socialisation ever happens. The initiative's draft bill would require every seller of residential property in Berlin to prove their portfolio falls below the 3,000-unit threshold. That would slow transactions across the market for years — affecting private sellers well beyond the large landlords nominally targeted.

The broader regulatory direction is clear regardless of the election result. Rent controls, restrictions on short-term furnished lettings, tighter Mietspiegel enforcement and social quotas are all under active discussion. The structural investment case for Berlin residential remains intact — chronic undersupply, a vacancy rate of just 1.6%, continued population pressure and rising rents. But the political risk premium on Berlin assets is rising.

For investors, the question is no longer whether Berlin will tighten landlord regulation — it is by how much, and how fast. The coalition arithmetic after 20th September will answer that. Until then, uncertainty is the condition the market is operating under.