Berlin state election: Left Party wins, pledges to expropriate private apartments

The Left Party, led by Elif Eralp, has captured 25.3 percent of the vote in Berlin's state elections and is now in talks with the Social Democrats and Greens to form a governing coalition with the Left at the helm.

Housing Crisis at the Center of Campaign

The rising cost of housing in Berlin was a central issue in the campaign. The Left Party proposes to address it with a mix of:

• Public housing construction
• Rent controls
• Expropriation of 220,000 housing units currently owned by large real estate companies

Expropriation "serves the purpose of being able to regulate rents, which we can't currently do with private owners," Eralp told the Russian-German magazine Wir. "This takes these apartments out of speculation and out of the possibility of profiting from the housing shortage."

Referendum and Previous Rent Control Efforts

Eralp has framed this plan as implementing the will of Berlin voters. In 2021, 59 percent of voters approved an advisory referendum calling for the seizure of a quarter of a million apartments owned by large landlords.

The year before, the city implemented a rent cap that led to actual rent reductions for some 300,000 apartments. However, in 2021, Germany's Constitutional Court struck down the policy, declaring that the power to cap rents rested with the federal government.

Berlin's brief experiment with rent control produced predictable consequences:

• Rents fell on controlled units, benefiting existing tenants
• The number of available rent-controlled apartments plummeted
• Newcomers searching for housing in the growing city faced skyrocketing prices on the non-controlled market

Concerns Over Expropriation

Eralp has decried Berlin's housing shortage as a major cause of high prices. However, experts have warned that expropriation may not fix the issue.

As German policy analysts explained at the time of the 2021 referendum:

• State seizures of private property would be a major disincentive to invest in new construction
• The state government would have to compensate landlords for lost property
• This would leave fewer funds available for the construction of new social housing that the Left also wants

International Comparisons

Left-wing media outlets are hailing Eralp's victory as equivalent to democratic socialist Mayor Zohran Mamdani's election in New York. "First we took Manhattan, then we took Berlin," reads the headline in the socialist Jacobin magazine.

Critics note that Eralp's housing policies suffer from the same contradictions as Mamdani's, who wants to attract private investment to end the city's housing shortage while also using rent controls that drive more homes off the market.

Opposition to New Construction

Despite criticizing the housing shortage, the Left Party is also opposing a proposal to build 21,000 apartments on the fringes of Berlin's shuttered Tempelhofer Feld airport, according to The Berliner. Its coalition partners, the Greens and Social Democrats, are also skeptical of the plan.

National Government Intervention

Germany's national government, led by Christian Democrat Chancellor Friedrich Merz, announced a plan in July to ban state governments' expropriation of private housing. Instead, the government is promising to establish a government-run housing construction firm.

Barring some change in national policy, this will prevent the Left from making good on its plans to municipalize the city's housing stock.

Curing the city's housing shortage will still require private investment. A far-left-led state government dead set on eliminating private housing is hardly an encouragement to provide that investment.