Quote:
Originally Posted by C.
I'm so confused with what's happening in this thread.
it started with a proposal for Berlin to expropriate privately-owned apartment buildings to ensure they remain affordable for residents. Something that can be done in theory, but will probably be very costly. Where it stands now, I don't know. lol
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Here's a video. You can turn on closed captioning to get English subtitles.
• Video Link
To summarize (I'm including some numbers here that aren't in the video but are available in a
pdf here), governments in Germany are allowed to pay less than market rate when expropriating. Market rate for these properties is about 36 billion Euros. The Berlin senate has thrown out a series of numbers to estimate the value of the buildings plus improvements, less appreciation since the private owners bought them from Berlin. These come in at around 18 billion. The current tax assessment of the properties is 11 billion.
DW&co Einteignen wants to charge a "fair rent"--about 4 Euros per square meter. Building maintenance costs something like 2.20 a square meter; the rest is available to service debt. Currently, Deutsche Wohnen & co charge about 7 Euros per square meter. At current rents, Berlin could afford to pay about 24 billion. To pull off fair rent they can only afford 8-9 Billion.
I don't know if that's realistic. 11-18 billion does, however, seem possible. And they'd still be able to charge affordable rents. To be honest, Berlin isn't really lacking
very affordable places--very poor people already qualify for subsidized housing, which remains abundant*. The problem is that there's a widening gap between those rents and what's available on the market. Being sort of poor, or even middle-income, means you struggle to find decent places with affordable rent.
One more general point: I wouldn't expect things in Germany to work like they do in Anglo countries. Germany has a far murkier, more nuanced interplay between the public and private sectors. For example, Germany has multiple public health insurance providers, but they aren't really public--they're independent non-profits subject to price regulations. They're also deeply embedded in German society--it's been like this since the 19th century. Economic liberalism isn't an essential part of the culture like it is for us Anglos.
* Don't take me as any kind of source on this, but as I understand it, they figured out a clever system to pull this off. Between getting trashed in the war and then being under siege/socialism for the next 45 years, Berlin housing was generally low quality--shared bathrooms, coal stoves, leaky roofs, that kind of stuff. This is the other side of the romantic image of 1980s bohemian paradise--Tilda Swinton and Nick Cave were living in dumps.
Anyway, Berlin offered subsidies to modernize buildings, but the owners had to keep rents down and make the places available to the qualifying poor. Building owners got to save their buildings, and the city secured a deep supply of affordable housing.