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A Spectre is Haunting Berlin — the Spectre of Public Housing

02-Jun-2019Christoph Wälz

A massive renters movement is demanding to take real estate companies with more than 3,000 housing units into public ownership.

Christoph Wälz is a teacher and member of DIE LINKE (the Left Party) in Berlin. As a union member, he is advocating that the labor movement participate as an active part of the campaign to put the real estate companies under public ownership.

Over the past several months, tens of thousands of activists in the German capital have been mobilizing to push back against huge rent hikes and speculation. This movement has now triggered a national debate about taking over the real estate giants and even nationalizing large corporations in general.

Fifteen years ago, in the wake of the fall of the Berlin Wall, Berlin was a city in which it was possible to move from one place to another and find affordable housing. Now it’s a different story, as painful rent hikes by private real estate companies monopolizing the housing market have led to a wave of economic evictions, gentrification, and homelessness. For many, the idea of housing as a right rather than a commodity seems like a distant shadow.

But renters in Berlin haven’t accepted this change. In response, their renters movement against these horrendous rent hikes has sunk deep roots in many different parts of the city. In April 2018, approximately 25,000 tenants took to the streets. That’s when the demand—promoted by left-wing activists, that big real estate companies be taken under democratic public ownership—caught fire. Contrary to what all the pundits said would happen, there was a huge positive response to this idea among working people across the city and beyond.
Nationalize Deutsche Wohnen

Public anger was directed especially at the real estate company Deutsche Wohnen which owns more than 111,000 housing units in Berlin, but the movement has developed in opposition to big real estate companies in general, not just one company. In April 2019 more than 40,000 people occupied the streets. This was the largest tenants’ mobilization in decades, and it was linked to the campaign for a historic housing referendum.

The referendum is demanding the use of Article 15 of Germany’s constitution for the first time, which would allow for the nationalization of land and the housing or commercial buildings on it. To make it onto the ballot, the referendum campaign requires 20,000 signatures. In the second round 180,000 signatures are needed. If successful, it would then go to a vote. Although the vote will be non-binding, activists know that it will create huge pressure on the government to act, and they can use it as a key organizing tool to build the movement with deeper and wider support than ever before.

Mass media outlets see this as a radical demand, but the renters putting it forward know that what is truly radical are these astronomical rent hikes. It is obvious to Berliners that small steps are not enough to stop this trend. Tenants of Deutsche Wohnen have described how they suffer from explosive rent hikes while the condition of their housing actually deteriorates. For these tenants, taking these homes over and placing them under democratic public ownership is an act of urgent self-defense.
In just a few months, this campaign has managed to put the real estate lobby on the back foot. The support for nationalization is continuously increasing among the population.
In response, the right wing is warning about the spectre of “socialism.” The alt-right AfD (Alternative for Germany) warns about a “GDR 2.0”—a return of the Stalinist East German Government.

This stands in laughable contrast to what the campaign actually aims to achieve: housing that is publicly owned and democratically managed by the tenants. This is something that never happened under the Stalinist caricature of socialism. Rather than a threat to democracy as the AfD claims, this would actually be a giant leap toward democracy, because the units are currently controlled by just a handful of wealthy owners while renters have no voice.

Why Stop There?

The debate about nationalizing large real estate companies has swept the country. Angry renters in all major cities have taken to the streets in recent months, and the demand for nationalizing large corporations has captured people´s imagination.

In the wake of this discussion, Kevin Kühnert, the chair of the Young Socialists, the youth organization of the Social Democratic Party (SPD), was asked about his general vision for society. Vaguely speaking about public ownership of large corporations, like the car manufacturer BMW, he triggered an even bigger debate, with many more politicians weighing in—mostly against his daring to question private property over corporate power.

On May 2, the New York Times wrote: “Forget the wannabe socialism of American Democrats like Bernie Sanders or Alexandria Ocasio-Cortez. The 29-year-old Mr. Kühnert is aiming for the real thing. Socialism, he says, means democratic control over the economy. He wants to replace capitalism as such, not just to recalibrate it.”

Unfortunately, Kühnert is a member of the SPD which accepted the dogma of capitalism and neoliberalism long ago. Even a fully fledged Corbyn-style revival of the former traditions of the social democracy is highly unlikely. However, this could be a huge opening for the more radical Left Party to argue the case for socialist policies and a fundamental change in society in a much bolder and clearer way.

A Transformation Is Underway

Decisive sections of the Left Party are still not looking in the direction of bold socialist policies. The party’s moderate wing has worked hard over the last decade to prove itself reliable in pro-capitalist governments as a junior partner of the SPD.

At the moment, three parties make up the government of the regional state of Berlin: The SPD is the largest party in the coalition. The Greens and the Left Party are referred to as junior partners.

The recent convention of the Left Party in Berlin voted by a large majority to support the demand to bring the large real estate companies into democratic public ownership. This was a big step forward. The Green Party and the SPD are still hesitant, but they are feeling the pressure.

For instance, after years of overseeing privatizations and neoliberal policies, the SPD now says that they want to stop rent hikes for the next five years. They even announced an in-depth discussion on the question of nationalizations, which will be resolved this November. Similar to how many Democratic Party candidates for president are adopting parts of Sanders’ 2016 primary platform, like Medicare for All and tuition-free college, the dramatic change from these politicians shows how powerful and popular the movement for public affordable housing has become.

Under the pressure of the campaign, the real estate company Deutsche Wohnen has also made concessions to the tenants, in a vain attempt to improve their reputation.

The fact that the Left Party took on the demand for public ownership of these companies is significant. It marks a fundamental shift from past decades when one of the two predecessors of the Left Party was, in fact, responsible for selling off public housing, which led to the current crisis in the housing market.

What is the Left Party?

The Left Party was formed in 2007 from a merger of the former PDS (Party of Democratic Socialism) and the WASG (Labour & Social Justice—the Electoral Alternative). The PDS had developed out of the former governing Stalinist party in East Germany. Later on, it served in pro-capitalist governing coalitions on regional and state levels. In doing so, they took responsibility for implementing budget cuts, destroying public sector jobs, and privatising hospitals and housing—the antithesis of what they supposedly stood for.

From 2003-2004 the governing coalition in Berlin, formed by the stronger SPD and the smaller PDS, implemented a series of austerity measures to pay the interest on the debt that the city government owed to private banks. This involved selling publicly owned housing units, including 65,000 units to Deutsche Wohnen alone, for 405 million euros. The company now claims that these homes are worth 7 billion euros. The ex-Stalinist PDS implemented these policies of budget cuts and privatizations in opposition to the interests of its predominantly low-income voter base.

In 2007, the PDS fused with the WASG, which had developed as a protest party out of social movements. Together they formed DIE LINKE (the Left Party). Initially, this triggered a range of sharp debates in Berlin over what to do. However, the Left Party remained in this governing coalition with the SPD till 2011.

Since 2016 the Left Party has been back in government in Berlin. The leadership claims they have learned from their mistakes. This was initially a fairly easy claim to make, since the privatization damage has already been done, and the financial situation is better today, allowing for the easy passage of a few social reforms.

Now, the secretary and head of the department for city development and housing is a member of the Left Party, and she is completely on the hook for what happens. On the other hand, she is also well-positioned to stand with the movement against exploding rent hikes, and to take action to make housing publicly owned again.

A Badge of Honor

If the Left Party were to continue to develop and actually implement the policies they decided to support at their last party convention in December, the conflict within the government between the Left Party and the other two partners in that coalition, the SPD and Green Party, would dramatically increase. This could result in the Left Party being kicked out of the coalition. The real question would be when, not if, this would occur, as the SPD and Green Party are not prepared to fundamentally clash with the profit-driven system and the power of the markets.

This is not a bad scenario. It is wrong for the left and socialists to govern if they govern against the interests of working people. If the Left Party were kicked out of the governing coalition, they could then offer support to an SPD and Green party minority government on a case by case basis: voting for any proposals that benefit the working class and poor people, and voting against any pro-corporate legislation.

However, if the Left Party were to be kicked out of government for standing up for working-class and oppressed people under the heel of big rent hikes from corporate real estate firms, it would be seen as a badge of honor. Under such a scenario, new elections might be called. Under these conditions, the Left Party could even campaign to win majority support for socialist policies.