Renters in Berlin have a radical plan to seize apartments from landlords and are set to force a referendum that could revolutionize the battle for fair rent

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People protest against a decision by Germany's Constitutional Court that the law called "Mietendeckel" (rent cover) putting a rent cap on apartments in Berlin is invalid, in Berlin, Germany, April 15, 2021. REUTERS/Christian Mang
People protest against a decision by Germany’s Constitutional Court that the law called “Mietendeckel” (rent cover) putting a rent cap on apartments in Berlin is invalid, in Berlin, Germany, April 15, 2021. REUTERS

  • Renters in Berlin plan to force a referendum on nationalizing thousands of apartments in the city in order to lower rents.
  • Under the plan, landlords would be forced to sell their apartments to the city, which would then lower the rent.
  • Activists have more than half the 240,000 signatures needed to force a referendum.
  • It is the latest front in the battle for fairer rents after plans for a rent cap were overturned in the city.
  • See more stories on Insider’s business page.

Like many cities around the world, rents in the German capital of Berlin have soared in recent years, doubling in the last decade alone.

But unlike many other cities, the people of Berlin are actually doing something about it.

First residents persuaded the local authorities to bring in a rent cap that instructed landlords to freeze rents at 2019 levels.

However, that was overturned by Germany’s federal court in April, which ruled the measures unconstitutional.

Now local campaigners are planning something even more radical: a bid to nationalize thousands of privately owned apartments in the city.

Specifically, campaigners want the government to take apartments from real estate firms that own more than 3,000 apartments, place them into public ownership, and rent them out at more affordable rates.

The estimated market value of the real estate in question is up to €36 billion ($44 billion), CityMonitor reported, but the group has suggested compensation of as little as €8 billion ($10 billion), arguing that the prices are based on speculation and overpriced rental yields rather than real value.

“The housing market in Berlin seems like paradise if you’ve lived in London or Paris,” Jonas Becker, a 30-year-old academic who lives in the German capital, told Insider.

“The housing market in Paris is absurd because you can’t find any affordable housing. But that’s an evolution we see in Berlin as well. The rising rents don’t correspond anymore to wages, and that’s something we want to address.”

Becker is a spokesman for a group of housing activists called “Expropriate Deutsche Wohnen & Co,” referring to the city’s biggest real estate group.

The group says the compensation would be provided to landlords gradually using the rents, rather than costing the taxpayer.

Berliners are rising up for fairer rents

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The idea is certainly very radical, but it is gathering plenty of support from Berliners.

A petition started in February for a referendum on the plan has already collected 130,000 signatures, meaning there is a very real possibility that Berlin authorities will be forced to hold a referendum on the subject in September.

In a city where around 85% of residents live in rented accommodation, and where more than 200,000 publicly owned apartments have been sold off since 1990 to private equity firms and hedge funds, the issue has taken on acute significance.

“For my generation, it’s nearly impossible to own a building or an apartment – something that has been very possible for our parents,” said Becker. “We will probably rent our whole lives.”

He said that many Berlin residents, especially younger ones, were radicalized by the German federal court’s decision to overturn the rent cap last year, which prompted thousands of people to march through the streets, banging pots and pans in protest. Many landlords are now charging their tenants more than they were before the rent cap, in order to make up for lost income.

The group wants to collect 240,000 signatures by the end of June, which would be enough to force a referendum on the subject. There is also a strong chance that the referendum could pass, forcing lawmakers to consider the plan: A poll carried out in April indicated that 47% of Berlin residents supported the proposal, with 43% opposed and 9% undecided.

However, even if the referendum is successful it will be a struggle to actually get the plan into legislation. Die Linke, the left-wing party with 69 seats of 709 in Germany’s parliament, is the only one to have offered the proposals formal support, Deutsche Welle reported. Germany’s dominant conservative parties have been quick to condemn the proposals.

Nonetheless, Becker said that even talk of a referendum has pushed radical solutions for Berlin’s rental problems into mainstream dialogue. “Many people now consider us a real opponent they have to deal with, not as left-wing radicals who want a revolution. That’s not what we want to do,” he said.

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Rising remote work is upping job inequality in European capitals and ‘scarring’ some sectors, says OECD report

The expansion of remote working has led to labor inequalities in major European capitals.

  • An report by the OECD and Indeed warned that remote working may aggravate labor inequality. 
  • Analyzing job postings for major European capitals, experts said the service sector may be scarred.
  • The percentage of remote job postings is increasing but the job market has still not recovered.
  • Visit the Business section of Insider for more stories.

Remote working options have allowed many companies to keep going during the COVID-19 pandemic, with some companies even thriving as a result. However, this hasn’t been possible in all sectors with retail, hospitality, and healthcare among the most affected.

The expansion of remote working has led to labor inequalities in major European capitals including London, Paris, Madrid, and Berlin. Unemployment in the UK hit its highest level in five years last month and job offers have been harder to come by in all the cities and their countries. Meanwhile, remote jobs have thrived.

Sundar Pichai
Google plans to try and accommodate remote working indefinitely.

This is one of the major findings published in a report on remote working in European capitals, co-authored by OECD economist Lukas Kleine-Rueschkamp and the Indeed job portal’s chief research economist for the MENA area Pawel Adrjan.

Using data from the Indeed portal, they said: “Labour markets in these cities are being pulled apart in early 2021, with postings for higher-paid jobs performing better than those for lower-paid service jobs.”

Remote working as a factor of inequality

“The move to remote work is greater and more persistent in these cities than in other places and may be long-lasting,” the report said.

A survey conducted in January by the National Association for Business Economics (NABE) found that just one in 10 companies expected their employees to return to the office after the pandemic.

Major companies have recently extended their remote working policies, with Google planning to try and accommodate remote working indefinitely.

“Cities such as London have already experienced population declines,” Kleine-Rueschkamp and Adrjan added. They said that although it was unlikely that living in a major European capital would not have its perks after the pandemic, “the trends COVID-19 has initiated might weaken their appeal.”

Remote working does appear to be much more prevalent in major cities than in the rest of the country. Remote work increased 7.3% higher in Berlin than in the rest of Germany, and 5.4% more in Madrid than the rest of Spain.

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The report warned of the consequences of further decline in European capitals.

Paris and London had smaller disparities but they were still notable. Remote working growth was 4% higher in Paris than in the whole of France, and 2.4% higher in London than the rest of the UK.

Remote job offers previously constituted 5% of the overall workforce in Madrid in 2020 but stood at 15.7% a year later. In the rest of Spain, the rate has increased from 4% to 10.4%.

The report attributes this phenomenon to the fact that “postings in occupations suitable for working at home, like tech, finance, law, and marketing, are most prevalent in big cities.” In comparison, the service sector is heavily affected by remote working and could be “scarred for a long time,” especially in London and Paris.

Fewer jobs available than before the pandemic

The OECD report revealed that job markets in European capitals had been seriously hit by the pandemic. London was the worst affected, with 41% fewer vacancies at the end of January 2021 compared to February 2020.

Paris and Madrid both had around 25% fewer vacancies than before the pandemic, while Berlin had 8% fewer. Paris was the only instance where the capital was worse affected than the rest of the country.

The report warned of the consequences of further decline in European capitals, as their economic growth tended to outstrip the rest of the country. In the years prior to the pandemic, “GDP per capita jumped more than 12% in these cities, almost 3 percentage points faster than national growth.”

At the height of the pandemic-related job market contractions, however, capitals were affected more than the rest of the country.

Job openings in London were 57% lower than before the pandemic, 48% lower in Madrid, 42% lower in Paris, and 26% lower in Berlin. The report noted that “for much of 2020, job openings in these cities were between five and 15 percentage points lower” than the rest of the country.

The report said large cities would “a difficult adjustment period for some urban workers,” adding that “the pandemic’s labor market effects may be temporary for some sectors, but, for others, they may last.”

Policymakers should support displaced workers and those at risk of redundancy by offering comprehensive skills development strategies tailored to local conditions,” the researchers concluded.

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