Anything can happen -- like the Berlin vote to expropriate (seize) almost 250,000 apartments from corporate landlords. But there are still those pesky laws to deal with. Just as the United States Supreme Court found the Centers for Disease Control and Prevention's eviction ban unconstitutional (after it had been in place for a year), this Berlin vote isn't legally binding -- not yet anyway.
The people of Berlin (Germany's capital), frustrated by the cost of renting an apartment, were sent over the edge by a possible deal that would make Vonovia -- the largest German residential landlord company -- even bigger. Vonovia was planning to buy its rival, Deutsche Wohnen, the second-largest landlord in Germany.
This merger would create the largest residential landlord in Europe, and renters are afraid prices would rise even higher due to lack of competition. To prevent this merger, Berliners voted to force Deutsche Wohnen to sell to the city instead -- at below market price.
A large-city problem
The story of Berlin could be told about any major city -- it's expensive to live there. In Berlin, 17 out of 19 neighborhoods are considered unaffordable, meaning the rental burden for the average income earner is over 40% of their household income, with one neighborhood costing renters as much as 68% of their total income.
By average earners, we're talking about people in a variety of professions, such as food delivery drivers, nurses, and teachers, who naturally would prefer to live in the same town in which they work.
With 56.4% of the vote, Berliners passed an affordable housing referendum. They want the Berlin government to take rental property from landlords who own over 3,000 units and then socialize those units. This would apply to almost 250,000 apartments.
Two notable incidents
Prior to this vote, Vonovia and Deutsche Wohnen, feeling the pressure, made a deal to sell about 10% of their property to the government. That deal, apparently, wasn't enough.
The vote also came after Germany's highest court ruled against a rent cap it deemed unconstitutional -- after it had been in place for a year. The ruling to end rent caps left many tenants in a worse situation, as they now owed back rent.
Is the vote legally binding?
There will surely be litigation challenging this referendum. Kim Meyer, who is with a group called The Berlin Alliance against Displacement and Rent Madness, doesn't think any challenging lawsuits would win, though. Her reasoning is that the German constitution allows for land appropriation for the purpose of socialization and points out that many German houses have been expropriated to build roads.
But she could be wrong. The referendum isn't legally binding. The Berlin senate would need to draft a law to allow for expropriation of those apartments before it could happen. And the incoming mayor, Franziska Giffey, has been against this referendum, saying, "I am still of the opinion that expropriations do not help to create even a single new apartment or solve the big question of affordable housing."
Can it happen here?
Wherever there's an unaffordable housing situation like Berlin's, a city where most people (85%) are renters, you could possibly see this scenario repeat. Regarding the United States, it's not far-fetched to see this happening in, say, San Francisco, Los Angeles, or New York City, where there are similar concerns.
Germany has a socialization clause in its constitution that we don't, but the United States has used eminent domain many times to seize property to build roads.
The situation we see in Berlin is likely to happen anywhere if all the ingredients exist: a high population of renters, unaffordable rent, one or two major corporate landlords owning most of the rental units, and activists who want to socialize housing.
Berliners feel desperation as rents soar. As the saying goes, "Desperate times call for desperate measures." But is socializing apartments the answer? Benjamin Franklin is often credited with saying this: "When the people find that they can vote themselves money that will herald the end of the republic."
About public housing
It's possible to keep socialized apartments and housing projects state-of-the-art, attractive, vibrant places to live, such as Churchill Gardens in London. But mostly, public housing becomes run-down, depressing, and dangerous -- often requiring demolition from the deplorable conditions. That should be enough reason for people to reject this idea. But there still exists the real problem of affordable housing in Berlin and many other major cities.
The Millionacres bottom line
It's possible to achieve a healthy society by being proactive instead of facing a pick-your-poison approach of government control that commonly leads to neglect or corporate monopolization, which, in turn, often lead to sky-high prices.
Some ideas include allowing and encouraging more low-income housing to be built in an effort to increase homeownership (lessening the demand for rental units), enforcing antitrust laws to prevent monopolization from corporate landlords, and not acting on the frustrations of an angry mob, but instead allowing a variety of solutions to be heard and discussed.