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Berlin Buys Almost 15,000 Apartments from Real Estate Companies

Berlin just closed a huge deal about the purchase of as many as 14,750 apartments from the two real estate giants Vonovia and Deutsche Wohnen. It is worth billions. The pact is supposed to be another step in the fight against the city state’s affordable housing crisis.

Sofia/Bulgaria, September 18th, 2021 (The Berlin Spectator) — Berlin just took another step in the fight against its affordable housing crisis. Just nine days before the elections for both the Berlin Bundestag and the Berlin House of Representatives, it committed to purchasing 14,750 apartments from Deutsche Wohnen and Vonovia. With 2.46 billion Euro (2.88 billion U.S. Dollars or 2.1 billion Pounds Sterling), the price tag is rather large.

Affordable Segment

According to several German-language media reports, the three state-owned real estate companies Howoge, Degewo und Berlinovo will be covering the amount with loans. The Senate insists the purchase will not affect Berlin’s budget. “The deal is exemplary for a caring Berlin”, the federal state’s Finance Senator Matthias Kollatz was quoted as saying. He stated the 30,000 tenants affected could now rely on the fact that their apartments would be part of the affordable segment permanently.

By buying thousands of apartments, Berlin’s three-way left-wing government coalition intends to influence the housing market and make sure more Berliners can actually afford to live in their city. An earlier attempt to keep the rents under control, the so-called Rent Cap, failed when Germany’s Federal Constitutional Court came to the conclusion that it violated the country’s basic law. This happened in April. Now, Berlin is starting a new ‘Rent Cap’ initiative for the entire country in the Bundesrat.

Many Winners

On September 26th, Berliners do not just have the opportunity to take part in elections for the Bundestag and their own House of Representatives, but also in a referendum about dispossessions of large real estate companies. A spokesman for the organization ‘Deutsche Wohnen & Co. enteignen’, which organized the referendum, slammed the Berlin Senate for agreeing to the purchase shortly before it is scheduled to take place. Moheb Shafaqyar stated the movement generally supported the transfer of apartment into the public sector, but not by striking “back room deals” with “speculative prices”.

According to the CEOs of Vonovia and Deutsche Wohnen, Rolf Buch and Michael Zahn, there are many winners in this deal, and no losers. The two real estate giants intend to merge. Their first attempt failed. With the deal, they are selling some 10 percent of the apartments they own in the German capital. Berlin’s own real estate companies now have more than 350,000 apartments.

Construction Activities

The deal is not supposed to affect the construction activities commissioned by several state-owned companies. Step by step, more public housing is supposed to be available. At this stage, the total number of rental apartments in the city, held by both private and state-owned companies, is 1.67 million. Some of the apartments Berlin just purchased used to be public property before. Since the year 2000, the city state had sold 20,000 apartments for relatively low prices.

On Friday, Berlin’s departing Governing Mayor Michael Müller said at the Bundesrat, there was a right to live. It was more important than profits on the housing market. Müller demanded more possibilities for the regulation of rents in Germany.

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