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German ‘rent insanity’ sparks mass tenant protests, expropriation action

German ‘rent insanity’ sparks mass tenant protests, expropriation action
Germans in large cities are protesting on Saturday against what they see as the unfair influence of large landlords on the housing market. They want the biggest players undercut and their property expropriated.

In past years, German people living in larger cities saw a wave of gentrification and rising rent levels. Some of the tenants couldn’t keep up and had to move out, while others had to leave when owners of their homes decided to tear them down and build new, more expensive property, which could generate more profits.

The situation in Berlin was among the most acute, with rent doubling over a decade. Some attempts by the authorities to rein in the growth, like the so-called rent-break in 2015, were underwhelming.

For many Germans, there is also a political aspect to the problem. Some of the social housing that could have gone to citizens struggling to pay larger rent went to thousands of refugees, which the country had accepted. According to ZDF, nearly 55,000 refugees were living in Berlin in 2016, putting a bit of extra pressure on the housing market.

The anger and frustration of people affected by the housing boom in a negative way sparked a public protest movement against this “Mietwahnsinn,” or “rental insanity.” Some 25,000 activists are expected to show up on Saturday for the latest rally in the capital, with smaller events scheduled in cities like Munich, Cologne and Frankfurt.

The campaign behind it is called “Expropriate Deutsche Wohnen & Co,” named after one of the largest owners of rental property in the country. Deutsche Wohnen’s share of the Berlin market is about 6.5 percent, or 111,500 apartments. Protesters say it and other large private companies abuse their superior position to inflate prices and profit through speculation.

The protesters see the solution in a never-before-used Article 14 of the German constitution, which allows the forced transfer of private property into public ownership with due compensation – the national version of eminent domain. Under the plan, the shares of Deutsche Wohnen and about a dozen other large landlords with more than 3,000 apartments in their portfolio would be downsized to that number, with the excess transferred to a new public body for social housing.

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The current goal for the campaign is to push their vision through a referendum. They need to collect 20,000 signatures within the next six months and a further 170,000 by February for the proposal to be put forward before the German Parliament, which would work on putting it into a law.

Critics of the plan say the campaign overestimates the influence that larger landlords have on the market. There will also be a hefty price tag for the public to pick if the proposed expropriation takes place. The estimates vary from €7.3 billion ($8.2 billion) to as much as €36 billion ($40.4 billion).

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