German Government Bans Housing Expropriations, Funds Affordable Construction

The German federal government announced a package of measures aimed at easing the acute shortage of affordable housing. A new federal law will prohibit individual states from enacting expropriation or "Vergesellschaftung" of private rental portfolios, a move championed by Chancellor Friedrich Merz and defended by CSU leader Markus Söder as a safeguard against "socialism" and investment pull‑back.

To replace the confiscation proposals, the coalition will create a national "Wohnungsbaugesellschaft für bezahlbares Wohnen" (WBG) to build rental units in regions with proven housing deficits, and will relax banking rules to free financing for private developers. The WBG will receive a dedicated budget, while the coalition also plans to lift the ban on large‑scale public housing projects.

In Bavaria, housing cooperatives warn that soaring construction costs and a lack of land have halved new completions, with the Bavarian Housing Association director Hans Maier stating, "For their first construction project new cooperatives face too high building costs and scarce affordable land." At the same time, the federal ministry launched the €300 million "Gewerbe zu Wohnen" program, offering up to €30 000 per new residential unit to convert vacant commercial buildings into housing.

Activists from the "Deutsche Wohnen & Co enteignen" initiative protested the federal ban, arguing that expropriation is the only way to curb rising rents. Legal scholars, however, note that a simple federal law cannot override constitutional provisions on property rights, highlighting the political and legal contest surrounding Germany's housing strategy.