German government to bar state-level expropriation of large housing firms

The federal coalition of the Union and SPD plans a new law that would prohibit German states from expropriating large private rental housing companies. The measure is a direct response to the 2021 Berlin referendum in which 57.6% of voters supported the socialisation of such firms. The government argues the ban protects private housing construction, claiming that expropriation proposals deter investment.

Economist Clemens Fuest backed the proposal, saying the Berlin plans “scare private investors and worsen the housing shortage.” Within the ruling parties, some SPD members warn the ban could become a “gift” to the Left party ahead of Berlin’s state election on 20 September, and they question its constitutionality. Legal scholars note that expropriation is permitted under Articles 14 and 15 of the German Basic Law, which could lead to judicial challenges. The debate is shaping the campaign narratives of the SPD, the Greens, and Die Linke as they vie for votes in the upcoming election.