The Decibel - City Space: Why Berliners think expropriation could solve the housing crisis

Episode Date: June 12, 2025

Is expropriation, or forcing corporations to sell apartments to the government, a way to ease the housing crisis? Berlin seems to think so. In a landmark referendum back in 2021, the majority of Berliners voted ‘yes’ to forced sales, calling for the government to buy 240,000 apartments owned by some of Berlin’s mega landlords - whether they want to sell or not. Some call the strategy “radical” but needed. Others say it’s unconstitutional. But is it a viable solution to Berlin’s housing crisis, and could it work here in Canada? In this episode, we dive into the history behind Berlin’s expropriation campaign and try to figure out if a similar referendum on housing could succeed on this side of the Atlantic.You can find more episodes of City Space here, or wherever you listen to podcasts.

Hi, it's Maynika. Today we're bringing you an episode of City Space, the Globes podcast that looks at what it means to make cities more livable. This episode focuses on the housing crisis. It's about an experimental idea getting attention here in Canada. An idea that comes to us from Berlin, Germany. You can listen and subscribe to all episodes of City Space on your favorite podcast app. Hope you enjoy the episode. Um, I'm going to have to take a moment to actually count all these.

Um, one, two, three, one, two, three. Amir is an Australian living in Berlin. He's talking to us from the flat he rents with a roommate. And right now, Amir's staring past his computer screen into space, counting on his fingers the number of disputes he's had with his landlord, one of the bigger corporate landlords in the city. I've had up until now off the top of my head four legal disputes with the landlord or rather disputes that couldn't be resolved straight away or where the possibility

of legal action being taken by one side or the other has come up. So yeah, it's, I can't say it's been a smooth ride. Amir doesn't want to use his last name because some of those disputes are ongoing. A few have been about getting the landlord to fix the apartment, including a two-year ordeal that ended up in court. That one was about a wet, mouldy wall in Amir's bedroom. You know, you could basically put your finger in the wall and it was soft. Some of his other landlord disputes were about upping his rent. And so that's happened the last two years in a row. Both years we've contested the attempt

to increase our rents and both years it's been quite obvious that they've illegally tried to raise our rent and both years they've taken back their demand for a rental increase. So you might be thinking, a number of disputes, a rotting bedroom wall that doesn't get fixed for years, two illegal attempts to increase your rent. The stress isn't worth it. Why not just move? You know, since I started renting this apartment, the cost of apartments in Berlin has skyrocketed.

And so when people tell me stuff like, hey, have you considered moving? Have you just like, it's not worth the effort to fight. Just get up and leave and go somewhere else. The other thing is to where? In 2024, I lived in Berlin for the summer, reporting for the Globe as part of a journalism fellowship. When I told colleagues and relatives I was going, I kept getting the same response.

You'll love the cheap rent. But when I got there, I saw firsthand how Berlin's unofficial motto, poor but sexy, was no longer true. At least, not the poor part. Sure, Berlin is still cheaper than a lot of major cities. Amir and his roommate pay 1,040 euros a month. That's about $1,500 Canadian for over 850 square feet. A pretty good deal in Toronto or Vancouver.

But by Berlin standards, it's a lot. And it's gotten worse since Amir moved in. Berlin's rent has more than doubled over the last decade or so. There's nowhere that's going to be the same price as it was before. If there is, or if such a place exists, there's going to be so much competition to get there because Berlin is in the middle of a housing crisis as well. There's a word for the competition that Amir is talking about. Mass viewings where hundreds of people show up to see a single apartment for rent. Amir's inability to move isn't just a Berlin issue. We've talked about Canada's housing crisis on this podcast before.

Cities across the globe face both housing shortages and a lack of affordable housing. And one of the roads that led us here is a shift in perspective and in scale from housing as a place to live to housing as a way to make big money. In other words, the financialization of housing. In the eyes of some Berliners, there's an obvious solution. Expropriation, the forced sale of apartments owned by large corporations to the government. In a landmark referendum back in 2021, the majority of Berliners voted yes to forced sales. Is expropriation a controversial strategy? Absolutely. Will it help ease the

housing crisis? Depends on who you ask. This is Cityspace from The Globe and Mail. I'm Irene Ghalia. And on today's episode, is expropriation the answer in Germany or in Canada? The problem which we're facing is just so huge in its scope that yes, like radical solutions are going to be needed and we're going to have to change fundamentally how we view housing.

Interesting strategy, but it's also unlawful. Wishful thinking. I think Canadians as a whole are open to any idea that's going to increase affordable housing. The question is how open are governments to doing the kinds of investments? the kinds of investments. Alexander Reisenbischler says that when he grew up in the East German city of Leipzig, no one worried about housing. People worried about other things like job security, but not housing. There was just so much of it. And that meant that a lot of families could enter the middle class because they didn't have to pay a huge amount on housing.

Alexander is an assistant professor in political science at the University of Toronto. He looks at how government decisions shape housing markets. If I had to describe the Berlin housing crisis in one word, I would use the word severe. Alexander says how Germans talk about housing has profoundly shifted. It wasn't even a political issue before. And now it's a hot potato that every political party talks about. After a summer covering German politics in 2024, I saw how housing unaffordability is leading to frustrations often directed at newcomers.

Berlin's housing issues have also created a new set of haves and have nots. So there's this growing divide between housing market insiders with very affordable housing conditions and also outsiders facing very unaffordable housing conditions. And so insiders are homeowners who have seen massive gains in wealth and insiders are also people who have locked in a very good rental rate several years ago. Outsiders on the other hand are people who are now trying to enter a very expensive rental and also home ownership market or people who need to move, young families with children,

migrants, people who have to relocate for work, and so on. To understand why Berlin's housing prices have risen so quickly, we have to go back in time. Alexander points to four key moments in Berlin's unique history. Historical moment number one. Post-World War II, when all state governments committed to rebuild housing. And what policymakers chose to do in cities like Berlin was to focus on building a lot of affordable rental housing that would then ultimately build the foundation

for what became Germany's very high quality and affordable rental market for decades to come. rental market for decades to come. Historical moment number two. The fall of the Berlin Wall, the reunification of a divided Germany in 1990, and the bad state of the East German economy and housing. So what policymakers decided to do is to adopt massive stimulus packages to stimulate housing in East Germany. And what that meant was large-scale renovations, modernizations of the East German housing stock,

and also building a lot more housing in East Germany. The problem was that they built simply too much housing in East Germany, resulting in many vacancies. And so this led to a full-blown housing crash in all of Germany, right, that started in East Germany. Obviously, a national housing crash isn't good. But who does dirt cheap housing attract? More artists, actors, and musicians.

They flocked to Berlin, further cementing the city's reputation as a cool avant-garde cultural hub. Historical Moment Number Three. The move to privatize public housing in the 1990s and early 2000s. And when the financialization of housing really starts. When housing becomes more of a place to invest big money and to make big money. Again, there were massive housing vacancies in, especially in East Germany, but also partly in West Germany.

Policymakers decided to privatize social housing stock and sell off this housing stock in order to generate cash that they could then use for other purposes. Berlin needed money and it sold more than 200,000 units, about a third of its public housing stock, to private equity and hedge funds for next to nothing. And last but not least, historical moment number four, the 2008 global financial crash. By the end of 2007, at least 100 mortgage companies

declared bankruptcy or were sold. And then the crisis spread to one of Wall Street's biggest... So in response to that crisis, the European central bank, but pretty much all major central banks all over the world, lowered interest rates to pretty much zero, which stimulated housing demand. And as the housing market was relatively depressed at the time, investors really discovered a goldmine. They could buy up German property very cheaply

with relatively cheap financing conditions. And continue to buy property they did, especially in Berlin. Germany's economy eventually rebounded. Berlin's population swelled, partially thanks to rebranding itself as a tech hub, attracting higher earning residents who could pay more for rent. And voila, more people than available housing and increasingly rising rents. And I do want to really emphasize rental prices here because Berlin's home ownership rate is really low.

Berlin is a city of renters, about 85%. So for most people in Berlin, the housing affordability crisis is really a rental affordability crisis and it's really on everyone's mind. My name is Danielle. I'm active with the Right to the City action group. Danielle Kerrigan is a housing researcher. She's a Canadian living in Berlin and a member of the English language arm of Berlin's larger expropriation campaign called Deutsche Wohnen und Ko und eigenen.

Or Expropriate Deutsche Wohnen und Ko. Or what we're going to call them here, DWE. DWE isn't shy about whose properties they're targeting to turn into non-market housing. Large corporations. It's in their name. Deutsche Wohnen & Co. is one of the city's biggest landlords. Focusing on these kind of mega landlords would have the greatest impact. I think we are seeing a lot of effects, both of the, what people would call

financialized landlords themselves, which are amongst our largest landlords. You know, so much of their strategy is purchasing existing housing, and they either renovate it to try and kick out existing tenants and gain more rents, or they underaintain it, or they start really trying to charge like secondary charges. And so we're seeing all of these things of

profit maximization without a lot of respect, necessarily for the actual regulations as they exist, or really, really trying to play the margin as much as they can. And it's because they are really interested in dividends for shareholders. Remember Amir, our tenant? You know, for me, like I do feel that one of the key problems that's occurring, not just in Berlin, but you know, across the world is that housing

is being treated as a commodity, as you know, this financial plaything, you know what I mean? As opposed to this, like, as opposed to the place or the space where we build our lives and we build our families and we build our communities. And so, Amir, Danielle and many others, immigrants, locals, activists, the old and the young that make up the DWE movement, wanted to do something about what was happening in Berlin. In 2021, DWE was behind a landmark resident-led referendum in Berlin.

Pamphlets were posted. Meetings were had. Doors were knocked on. The referendum proposed that the government buy and transfer about 240,000 market apartments into public ownership. That's about 11% of Berlin's housing stock. Danielle and DWE believe it was more of a return. A lot of the public housing that we want to expropriate and socialize was actually built with Berlin taxpayers' money and was state-owned housing. The referendum targeted landlords with Berlin taxpayers' money and was state-owned housing.

The referendum targeted landlords who owned more than 3,000 apartments in the city. The end goal is to put these apartments and rental rates in the hands of those who live there. Or to use the official word, to socialize these apartments. Some call it a radical move, not just because of the potential expense, more on that later, but because of the idea that you're interfering with private property by forcing a sale. I mean, I believe that the expropriation campaign is not just realistic, but it's also completely appropriate for the problem that we have. And the problem which we're facing is just so huge in its

scope that yes, like radical solutions are going to be needed and we're going to have to change fundamentally how we as citizens, as tenants view housing. Radical or not, the referendum passed by 59%. The majority of Berliners eligible to vote said yes to expropriation. Even though it was non-binding, it sent a message. I think fundamentally it was this incredibly exciting moment because it was this moment where we as Berlin tenants

had said no, things are going to go in a bit of a different direction. Rents aren't going to keep going up forever. We're not going to be a city completely beholden to corporate interests. It was a win for DWE. But they soon faced another hurdle. The city of Berlin appointed an expert commission on whether expropriation and socialization of housing was even legal. You see, DWE's legal argument leaned on two articles of Germany's constitution.

Especially Article 15, which says you can transfer land to public ownership for the purposes of socialization. So, back into the hands of the people. DWE argues this includes housing. To DWE's surprise, the Commission agreed. The report even stated that expropriation was an appropriate action in the face of Berlin's housing crisis. Good news for DWE? Yes.

But not without controversy. There isn't consensus in legal circles. Some argue expropriation is unconstitutional. And as you can imagine, it's not just the legality of it that makes some give it a thumbs down. There's also the money. My name is David Eberhardt and I'm the spokesperson of the association of landlords of Berlin and Brandenburg. The full name of the association is BBU Verband Berlin Brandenburgischer Wohnungsunternehmen.

Quite long. I'm just glad I didn't have to say it. The association represents public, cooperative, and private housing landlords, including some of the large corporate landlords that DWE targets, like Germany's second largest residential landlord, Deutsche Wohnen & Co. They were then bought by Vonovia, Germany's largest residential real estate company. When we reached out to both companies for the story, Vonovia directed us to talk to David.

Well, of course, from the point of view of the initiative, this would have been an interesting strategy, but it's also unlawful. Wishful thinking. There are a few reasons why David calls expropriation wishful thinking. And they're the ones you'll hear most critics say. First point is that you don't increase the number of flats. Berlin is desperately needing more flats. The city is growing.

And so what you need is to build new flats. Danielle from DWE doesn't find this first point very persuasive. So to the argument that it's not building new housing stock and therefore not doing anything to the housing crisis, I think you also have to look at this idea that you can build your way out of the housing crisis. And that's kind of been the paradigm we're in here in Germany and that they've had in North America and it hasn't worked. Like what we're offering is a concrete real solution to lower

rents for the people living in these buildings immediately in a way that will affect the entire rest of the city. The second point is that of course the companies involved in this expropriation would have gone to trial. David says these trials would take years, decades even. And in the meantime, tenants are stuck and nothing gets done about housing in Berlin. And his final point is a big one, money. It would have been very expensive, round about 30 billion of euros for a city which is already deep in red tape. Berlin Senate estimates buying these apartments would cost 36 billion euros.

DWE's range is about 8 to 15 billion euros, though some members propose even less. That's another sticking point for some. The question of whether to pay market value and how not paying market value would scare investors from Berlin. The argument that we're scaring off investment through a fair value, what we see instead of this very high and speculative value is like, we look at what's been going on in Germany, where there's so much investment in housing, and so much of investment that is no longer coming into Berlin, that is no longer inflating property prices, housing prices, that doesn't necessarily strike me as a huge negative.

The debate about expropriation in Berlin rages on. But what about here? Next up, Canada's housing crisis, and a look at the appetite for expropriation on this side of the Atlantic. We're starting to see students and older people who want to downsize, and young households who can't afford to get into home ownership, and increasingly desperate low-income people all rushing towards the same limited stock of apartments a little bit like the opening credits of The Simpsons where everyone's sort of running towards the same sofa. And it just, it won't, that

sofa won't withhold that kind of pressure. Carolyn Weitzman is a senior housing researcher at the University of Toronto School of Cities. She's the author of a new book, Home Truths, Fixing Canada's Housing Crisis. And she's been thinking about the cost of housing for a long time. So I grew up with a single mother who was a real estate agent in Montreal and she used to take me around on Sundays to open houses and we would play a little game where she said if you guess the approximate price of the house, I'll get you an ice cream. And I only needed to be within $25,000 and I ate a lot of ice cream as a kid.

So we don't have the same history as Germany or the same constitution or even close to the same number of renters as in Berlin. But we do face a similar housing crisis related to shortages and a lack of affordability. Canada is pretty much number one when it comes to household debt. So whether you are a renter and about a third of households are renters or you are holding a mortgage and another third of households own their own home but they are carrying a mortgage, they are facing increasing levels of debt. And certainly at this point, both rent and house prices are through the roof. How did we get here?

Well, there were a couple of decision points after World War II when there was a very intense housing shortage caused by a lot of people moving to cities to be involved in industries and of course very little housing production as all the energy... What Carolyn goes on to describe is how Canada, unlike Berlin, chose the route of private home ownership. Post-World War II in Canada, the federal government built a lot of housing. About a million homes that could be purchased very cheaply. And by cheap, I mean the equivalent of about $90,000 today. In the 1970s, Canada's population was half of what it is now, but it was building more houses. That momentum, well, it stopped. The federal government got out of housing policy in the early 1990s. The provinces were expected to take over. They did a terrible job of taking over.

That was one thing. The federal government changed some of the tax mechanisms to make low cost rental less viable and also to get rid of capital gains tax for principal residences. So there were a whole bunch of mechanisms that were used, that were changed, that made ownership housing more of an investment, less important as a place for people to live. Which brings us to today and the financialization of housing. Some Canadians have benefited from the rising cost of housing, especially if you bought a place decades ago.

And because of past and current policy decisions, many Canadians see housing as a way to build wealth or a retirement fund. That might not change. But what has changed is the scale at which housing has become an investment. According to several housing experts, in the last 10 years, Canada lost more than half a million affordable rental units to financialized landlords, units owned by large corporations. In another way, financialization is a bit of a reaction to lack of supply because, as was recognized in the 1940s, when there's a really low vacancy rate, you're going to get what the federal government called in the 1940s, when there's a really low vacancy rate, you're going to get what

the federal government called in the 1940s, predatory landlords. So landlords who are just in it to maximize profit. So financialization simply means housing for profit, not for people, and it's what's been happening in housing. And it also refers to a specific set of landlords whose business model, and it's a very successful business model, has to do with maximizing profits, no matter what the human cost is. What do people think apartment buildings are?

They're investments. Mark Kenney is the CEO of the Canadian Apartment real estate investment trust or CAPREIT. What's a real estate investment trust, you ask? Real estate investment trust in short are trust units that are a flow through fund, really a mutual fund to unit holders that are traded publicly, primarily owned by Canadians in either their registered savings accounts or by some institutions that hold the stock.

Mark says REITs in general get a bad rap, and he seems pretty annoyed by it. Rather than broadly blaming the financialization of real estate, he says our frustrations should be targeted towards those that are actively exploiting the system. Renovation. In Capri's 27 year history, we have not done a single Renovation, not one. Okay? So like the conversation in Canada should be about behavior, not about structure.

And this whole premise of saying, let's talk about structure because big is bad, I would prefer that we have a conversation about what is the bad behavior that we're trying to address here. So who owns the investment isn't the issue. It's what the owner does with that investment that has social consequence that needs to be talked about. Here's how Mark sees the issue of Canada's housing crisis. In Canada, we have an income problem, not a rent problem.

We have an income distress problem. We have an overall housing supply problem and we have an acute affordability problem. and we have an acute affordability problem. And the acute affordability problem is where you're seeing the friction between private owners and, I'll say, tenant activism, which is all extremely well-intended. What most activists are focused on, rightfully so, is the stress and the duress that people are going through. But they're blaming it on property owners. And this is where I get quite sad as a Canadian to know that in the US, they have more social

housing per capita there than we do in Canada. And we call ourselves socialists. So I think it's an abysmal failure on the social file. And I think that Canada has to absolutely do catch up here. How open are Canadians to the idea of expropriation? I think Canadians as a whole are open to any idea that's going to increase affordable housing. The question is how open are governments to doing the kinds of investments? It is actually cheaper in most cases to acquire even buildings that aren't housing and convert it into housing. In fact, as I speak to you,

I'm looking at a former tavern that was turned into 10 affordable housing units. This was 20 years ago in Ottawa. I'd say in general, it's a pretty good deal, but it's not cheap. The kinds of purchases that have been going on in BC are about $400,000 a unit to $600,000 a unit. You're talking about tens of millions of dollars for one apartment building. But then you have to ask yourself, what are the alternatives? When Carolyn mentioned what BC has been doing, she's talking about British Columbia's Acquisition Fund, officially known as the Rental Protection Fund. It's a program where housing nonprofits with government money buy existing rentals, often aging buildings.

It's a strategy Carolyn and others say isn't necessarily cheap, but buying older buildings and fixing them up is often cheaper than building from scratch. Rental Protection Fund turns market housing into public housing and is meant to slow down the hemorrhaging of affordable rentals in the province. So if we don't address the question of aging apartment buildings, if we just allow them to either be acquired and renovated out of affordability

by the private sector or demolished, then we're going to lose even more affordable housing, have even more lack of older affordable apartments in cities, and that would be disastrous. So the cost of inaction is pretty dire, but it would need to be provincial or federal in order to really work. And just to be clear, the rental protection fund Carolyn is talking about here is used for acquisitions or willing sales and not direct expropriations or forced sales.

So I asked Carolyn, does the government have the power to force a private developer or owner to sell them a property? Cities can expropriate. The only difference between a regular acquisition and an expropriation is expropriation is against the will of the landowner. Generally, expropriations are much more expensive and take much more time. The example that I just gave from around the corner in Ottawa, they were lucky. The owner of the tavern literally walked away. And after three years of the building being abandoned, no property taxes, et cetera, and it being quite a hazard to

neighbors because it was abandoned, the city took it over. Right now in Longay, just outside Montreal, there's a shopping mall that used to have dozens of stores in it and there's only a grocery store, a pharmacy, and a nail shop that's open. The mayor of Longay looks at that property, which is extensive, close to transit, and goes, wow, we could turn that into a lot of affordable housing. But unfortunately, the landowner who bought the property in 2009, when it was viable, that is most of the stores were open for $9 million and now the property is valued at $18 million, he won't sell. And the mayor knows that there would be a two, three, four, five-year legal process to try to expropriate.

So it's much, much, much, much easier to work with willing sellers. And if the seller's not willing, in general, Canadian courts go with property rights over the right to housing. There is something like Montreal's right of first refusal that's kind of like expropriation. It's where the city has a legal right to get the first chance to purchase a private property or land. Montreal can then develop things like social housing, parks, and other public infrastructure. I think that acquisitions have been a really important part of housing policy and they

need to continue to be a really important part of housing policy. So we're spending a lot of money on housing policy right now. We're spending a lot, a lot, a lot of money on subsidizing rental that isn't necessarily affordable, new rental that isn't necessarily affordable. And if we focused the amount of money that we're spending on housing, the amount of government money on what we know works to create low and moderate income housing, we know it works because it's worked in the past in Canada. We know it works because it's worked on a very small scale in Canada. And we know from other countries what works and what doesn't. Then I think we'd have enough money for a

healthy acquisitions program. We're talking at a time where there's some substantial changes happening in the federal government. If you were to become the next Prime Minister, what would you do to help the housing crisis? I would create a revolving finance fund, and I would have three categories. The first is new build, the second is acquisitions, and the third is renovations.

And I'd prioritize housing that's going to be available at costs that are affordable to low and moderate income people because those are the majority of people who really need housing right now. And that shouldn't be a right or left issue. I mean, France had targets of 20% non-market housing from 2000 to the present, and that's been right-wing, left-wing, and whatever the heck's going on in France right now. You know, in my dream of being queen of the world, I'd be head of the housing party. It wouldn't necessarily be the Conservative party or the Liberal party or the NDP or anything

like that. It would just be the make it make sense party. I mean, I'd vote for the make it make sense party, wouldn't you? So maybe a straightforward expropriation campaign isn't the most efficient avenue in Canada. Maybe acquisitions feel more promising. And in Berlin itself, the potential for expropriation is still up in the air. Since the expert commission sided with DWE, a more conservative municipal government was voted in. And they aren't exactly hot on the idea. But DWE hasn't given up.

Danielle says they're currently drafting a new referendum, this time one that, if it passes, will be legally binding. But of all of the people we spoke to for this story, whether they liked the idea of expropriation or not, there's one thing they all mentioned as a way to help the global housing crisis we're seeing. The need for government to get back in the housing game, in a big way. for all our sakes. On the next episode of Cityspace, the 1912 plan that would have turned the frontier town of Calgary into the Paris of the prairies. Beauty and form, I think, make a city, right? Like, when you think about some of the great cities in the world,

it's because they're a beautiful city and they're memorable. We'll look at the politics of beauty and its many beholders. Thanks for listening to City Space. The show is produced by Debbie Pacheco, Kyle Fulton and Jay Coburn. Our theme music is by Andrew Austin. Our executive producer is Kieran Rana. Thanks to Amir, Alexander Reisenbischler, Daniel Kerrigan, David Eberhart, Mark Kenney, and Carolyn Weitzman for helping us put this episode.

I'm Irene Galia.