Berlin votes for expropriation of landlord firms as Vonovia acquires rival

Voters in Berlin yesterday have backed a referendum calling for the expropriation of major landlord companies such as Deutsche Wohnen and Vonovia in a bid to reduce rents and create affordable housing in the German capital, provisional results have shown.

56.4% of Berliners voted in favour of the initiative, with 39% voting against, city hall announced following the non-binding referendum vote on Sunday, which was held alongside national and regional elections.

The result comes as Vonovia, Germany's largest residential rental firm, announced that it had reached the necessary 50% threshold required to acquire rival Deutsche Wohnen after two failed previous attempts. The merger would create a housing titan with a portfolio of around 550,000 properties worth over €80 billion.

Read more: German property giants' merger bid fails, renationalisation calls intensify

Berlin has seen growing public discontent over the issue of affordable housing and tenant rights in recent years, both of which were major issues in the election campaign in the historically left-leaning German capital.

Deutsche Wohnen Enteignen (DWE), the grassroots activist group that initiated the campaign that led to the referendum declared victory and called on the Berlin senate to begin drafting legislation to expropriate and socialise housing companies with more than 3,000 properties if there is an "intention to make a profit". Campaigners would like to see the city take control of around 240,000 properties.

"Ignoring the referendum would be a political scandal. We will not give up until the socialisation of housing groups is implemented," DWE spokesperson Kalle Kunkel, said in a statement.

In response to the result, Vonovia CEO Ralf Buch released a statement, in which he said: "Expropriations do not solve the manifold challenges on the Berlin housing market."

He said more cooperation was needed from all players in Berlin's housing market in order to find more constructive solutions.

Earlier this month, Deutsche Wohnen and Vonovia revealed their plan to divest around 15,000 apartments to the city for €2.46 billion as a political sweetener to garner support for their merger.

Read more: Vonovia ups bid for Deutsche Wohnen as expropriation vote looms

In Sunday's regional elections, provisional results have shown that the centre-left Social Democrat Party (SDP) retained control of Berlin city hall, meaning their candidate Franziska Giffey will become mayor.

Giffey reiterated her stance against the idea of expropriation but said that the referendum result should be respected.

"I am still of the opinion that expropriations do not help to create even a single new apartment or solve the big question of affordable housing," she told ARD.

She then called on the city government to start drafting a bill and conduct a legal review. "Such a draft then has to be checked and if it is not constitutional, then we cannot do it."

In the federal elections, the SDP narrowly came out on top with 25.7% of the vote, ending the 16-year rule of conservative-led rule under Angela Merkel. Coalition talks are ongoing with the party saying they would try to forge a three-way coalition with the Greens and the centre-right liberal Free Democrats.

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