Berlin coalition sets 10,000-flat threshold for housing takeovers

Berlin's incoming coalition of the Left Party, the Greens and the Social Democrats has agreed on a plan to force large residential landlords to hand over housing stock to public ownership, but only if they own more than 10,000 apartments in the city, according to coalition documents reviewed by reporters.

The threshold marks a significant departure from the demand made by the 2021 referendum "Deutsche Wohnen und Co. enteignen," which called for the socialization of private landlords owning 3,000 or more apartments. Under the new compromise, only companies with holdings more than three times that size would be affected.

Officials involved in the negotiations said the higher threshold is expected to apply to around five companies operating in the German capital. Together, those firms are estimated to hold at least 150,000 apartments, meaning the plan would still touch a substantial share of Berlin's rental market even with the narrower scope.

The referendum, approved by a majority of Berlin voters, had sought to compel the transfer of large private rental portfolios into common ownership as a way to curb rising rents and limit the influence of major real estate firms on the housing market. The coalition's compromise retains the principle of socialization but applies it to a much smaller group of landlords than voters originally endorsed.

Few observers had expected the three parties to reach any agreement on the issue at all, given earlier disputes over how far such a policy should go and whether it was legally and financially feasible. The Left Party had pushed for a broad application of the referendum's original 3,000-unit threshold, while the Social Democrats had expressed reservations about the cost and legal risk of a wide-reaching expropriation scheme.

The Greens, who held a position between the two coalition partners during negotiations, backed the higher threshold as a way to move the policy forward without abandoning the goal of the referendum entirely. Details of how compensation to affected companies would be calculated, and how the properties would be managed once transferred, have not yet been finalized, according to the coalition papers.

Berlin voters approved the 2021 referendum by a clear margin, instructing the city government to draft legislation for the expropriation of large landlords. However, the measure was not self-executing, meaning lawmakers were required to decide separately on implementation, prompting years of political wrangling over whether and how to act on the result.

A previous expert commission set up by the Berlin government concluded that socialization of large landlord portfolios would be legally permissible under the German constitution, though the panel did not specify an exact ownership threshold for which companies should be targeted. That report left room for political negotiation over where to draw the line, a gap the current coalition agreement appears to fill with the 10,000-unit figure.

Tenant advocacy groups and supporters of the original referendum have previously argued that a higher threshold would exempt too many large landlords from the policy, reducing its overall impact on rents and housing availability. Industry representatives for private landlords, meanwhile, have argued that any form of forced transfer of housing stock risks discouraging investment in the city's rental market and could trigger lengthy legal challenges.

The coalition agreement does not name the specific companies expected to fall under the new threshold, though housing market analysts have noted that only a small number of firms operating in Berlin manage portfolios of that size. The final list of affected landlords would depend on company filings and property registries once implementing legislation is drafted.

Further legislative steps are expected in the coming months as the three parties move to formalize their coalition agreement and begin drafting the specific legal text needed to carry out the socialization plan. No timeline for a vote in the Berlin state parliament has yet been announced.