Berlin housing proposal and new German disaster insurance plans

Political negotiations in Berlin are underway regarding a proposal to transition a significant number of private apartments into public ownership. The plan, being discussed by the Left (Die Linke), Social Democratic Party (SPD), and the Greens, targets real estate companies owning more than 10,000 apartments. Approximately 144,000 units could be affected, with total compensation to owners estimated at 16 billion euros. This measure has raised concerns among investors, as the proposed compensation per unit could be 40 percent lower than average book values. Vonovia, Europe’s largest rental provider, faces a potential loss of 8.4 billion euros under this plan.

Separately, the German federal government is introducing guidelines for mandatory natural disaster insurance to better protect citizens following the devastating 2021 floods. The proposal, supported by Justice Minister Stefanie Hubig and Finance Minister Lars Klingbeil, aims to expand coverage for risks such as floods, heavy rainfall, and earthquakes. Currently, more than 40 percent of residential buildings in Germany lack coverage for these specific natural hazards. Annual premiums for a standard family home are expected to range from 100 to 1,500 euros, depending on property value and risk exposure.