Rent hike triggers referendum on foreclosure in Berlin, Real Estate News, ET RealEstate

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BERLIN: In her apartment in the suburbs of Berlin, Regina Lehmann despairs of the letter from her owner, a large real estate group: the rent is increasing.

As of November 1, the increase of 12.34 euros ($ 14.54) on his monthly rent of 623.44 euros will be “difficult” to finance with his only income a disability pension, explains Lehmann at the AFP.

Almost 700 of its neighbors in Berlin’s popular Spandau district will suffer the same fate, raising their rents by up to eight percent.

Such increases are behind a popular initiative to “expropriate” real estate companies like Adler, owner of Lehmann’s apartment, which will culminate in a local referendum on September 26, the same day as the national elections and municipal.

Residents of the capital are increasingly frustrated with rising housing costs, as the city’s appeal to foreigners has grown in recent years.

And beyond Berlin, the cost of housing has become a hot topic in the election campaign for the contest to succeed Angela Merkel as chancellor.

Back in Lehmann’s living room, surrounded by photos of her family, Lehmann says she “just won’t pay” the raise.

“I think if we pay, after a while, they’ll raise the rent again,” she says.

364,000 signatures

Rent activists won the referendum in Berlin after collecting 346,000 signatures in support of their proposal, well above the number needed.

They push to “expropriate” the houses of real estate companies with more than 3,000 properties.

The poll’s result won’t be binding, but supporters hope to force the municipal government to respond to soaring rents, with the cost of housing rising 85% between 2007 and 2019.

The increase was painful for the inhabitants of the capital where 80% of the inhabitants are tenants and 19.3% of the people live below the poverty line of the country, against 15.9% in the whole country.

The activists blame the big real estate groups, like Adler, who owns 20,000 properties in Berlin.

In Lehmann’s Spandau neighborhood, activists argue that Adler’s attempt to raise rents is illegal, exceeding a legal benchmark linked to the average rent in each neighborhood.

The real estate group, in response, describes an “improved environment” around housing that gives it reason to charge more.

Advocates of the expropriation have stepped up the pace of their campaign in recent weeks to win over undecided voters, hanging posters and staging protests across the city.

Many Berliners have seen rent increases after the German Constitutional Court overturned a rent cap that had been introduced by the city earlier this year, and a poll by the daily Tagesspiegel showed that 47% of residents back the sweeping proposal presented in the referendum.

“We have to fight for our rights,” says Catia Santos, 41, who recently attended a protest against rents with her partner.

“Recently my rent has increased by 100 euros, although I am not earning more than before.”

Political conflict

On Friday, just over a week before the vote, the city of Berlin announced the purchase of 14,750 homes for 2.4 billion euros from German real estate giants Deutsche Wohnen and Vonovia, an agreement reached under pressure to find an answer to rising rents.

Forced takeover of private housing has been widely rejected by national and local politicians in favor of plans to speed up construction of new homes.

“The best protection for tenants is and always will be to have enough housing,” Armin Laschet, the conservative candidate for Merkel’s succession to chancellor, told a real estate conference in Berlin in June.

The favorite of the Social Democrats in the local elections in Berlin, Franziska Giffey, also declared herself against the proposal, believing that it could “damage” the reputation of the city.

But his party’s candidate for chancellor Olaf Scholz called for a “moratorium on rents” to stabilize prices.

Only the far-left Die Linke and some Green candidates came out in favor of the expropriation, some even displaying the logo of the rent activists on their election materials.


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