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Posts Tagged ‘Lorena Jonas’

Berlin To Vote On Confiscating Rental Properties From Corporations | ZeroHedge

Posted by M. C. on August 11, 2021

Perhaps not too surprising since Berlin was long the capital of the communist version of Germany, it is still a striking observation that half of the population in one of Europe’s most influential cities is planning to do away with private property – maybe not entirely at first, but once you start expropriating apartments under the pretext of “the greater good” you will never stop.

https://www.zerohedge.com/markets/berlin-vote-confiscating-rental-properties-corporations

Tyler Durden's Photoby Tyler Durden

In a time when ultra-left progressives, socialists and liberals across the US are quietly gathering in corners and testing the public mood with suggestions that the next logical step in the US transformation to a socialist utopia is expropriation of assets, Germany is actively moving toward seizing (read confiscating) rental properties from corporate landlords to provide housing to provide cheap (or free) housing to the masses, and it has Lorena Jonas to thank for this sharp turn to the left.

Jonas – a generously tattooed “goth” resident of Germany’s capital  – has spent the past eight years fighting landlord rent rises in her trendy Berlin district but as the FT reports, her latest battle will affect not just her neighbors but hundreds of thousands of tenants across the city, and potentially impact landlord-tenant relationships across the globe.

Jonas has been involved in a radical campaign urging Berlin’s city government to expropriate 240,000 properties from Germany’s biggest publicly listed residential landlords, accusing them of squeezing out lower income, long-term residents through shoddy maintenance and jacked-up rents.

She is hardly alone: having collected more than 350,000 petition signatures, their proposal which targets corporate landlords with more than 3,000 apartments each, will be voted on in a local referendum in September. Amazingly, polls suggest nearly half of Berliners support expropriation, which would force the companies to sell their properties to the city government at a “fair” price.

Perhaps not too surprising since Berlin was long the capital of the communist version of Germany, it is still a striking observation that half of the population in one of Europe’s most influential cities is planning to do away with private property – maybe not entirely at first, but once you start expropriating apartments under the pretext of “the greater good” you will never stop.

“What does it mean that my flat is now a commodity on the stock market, where the goal is to draw as much profit as possible for shareholders?” said Jonas, who lives in a property in Kreuzberg owned by Berlin’s biggest listed landlord Deutsche Wohnen, the main target of the campaign. “These questions are now resonating across Berlin, and beyond.”

Well, what it means is that apartments exist. If developers knew ahead of time that assets which they invested billions to develop would be taken away on a whim – i.e., socialism – they would never have been built leading to a far more dire result.

Alas, having learned nothing from the tragic lessons of the past, Berliners are pushing on and bracing for a fight with Germany biggest corporate landlords. Although small compared with the vast US publicly listed residential sector, corporate landlords such as DW are on the rise across Europe, as the world’s biggest property investors hunt for the stable income which the rental business can provide. As a result, the market capitalization of Europe’s publicly listed residential property sector has grown from €3.5bn in 2006 to nearly €85bn at the end of July this year, according to the European Public Real Estate Association.

Maybe – just maybe – all these disgruntled renters should take a detour to Frankfurt where the ECB has enabled this unprecedented housing bubble across Europe. But alas, when it comes to figuring out cause and effect, central banks are somehow completely untouchable, as if the broader population has some allergy to conceptualizing what printing money as a business model entails.

In any case, back to Germany where more than half of Germans rent their homes – the second highest rate among OECD countries – and as house prices rise around the world courtesy of central bank bubble-blowing making home ownership less affordable, the ranks of renters are swelling elsewhere too. Across the EU nearly a quarter of households lived in market-priced rented accommodation in 2019, the latest figures available, according to Eurostat.

And so, unable to overhaul a monetary system that is broken at its core, the local are taking the easy if suicidal way out:

“Unless we find some mechanism of continuing to transfer property from landlords to tenants [via home ownership] . . . you get a more unequal society split between the people with equity in housing and those without,” said Yolande Barnes, a professor at University College London’s Bartlett Real Estate Institute.

She is of course describing a core tenet of Marxism. If only she could tell us how every single Marxist experiment in human history has ended.

The good news it so far few cities have proposed measures as radical as those in Berlin’s September ballot. But many face similar problems: companies and entrepreneurs buying up and renovating old properties, then selling off units at lucrative mark-ups.

Then again, that the latest socialist revolution is starting in Berlin is probably not a surprise: once known for anarchist squatters’ communes and freewheeling techno clubs, the city has become an attractive investment. Existing buildings’ rents have shot up by as much as 43% over the past five years, making it increasingly unaffordable for the 86% of Berliners who rent.

Furthermore, nearly 125,000 of the city’s rental units were converted into owner-occupied homes between 2011 and 2020, according to recently published estimates by Berlin’s senate, further shrinking the market, as buyers – their bank accounts swollen thanks to central bank generosity – went on a buying spree. Last year was the biggest yet: 19,310 units vanished from the rental market.

But how is this Marxist proposition even possible in a “western” city? Simple: as the FT explains, the expropriation initiative is based on Article 15 of the German constitution, which says “land, natural resources, and means of production” can be reclaimed for public ownership, in exchange for compensation; of course, it has never before been tested in practice.

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