Berlin's Left, Greens and SPD plan to socialize large housing firms, sparking federal backlash

Exploratory talks set out a plan

Linke, Greens and SPD in Berlin agreed in exploratory talks on Saturday, 17 October, on a preliminary timetable for socializing large private housing companies. Companies with at least 10,000 apartments in the city would be expropriated against compensation, but each could keep a base stock of 10,000 homes, so the measure would reach only the remaining units. Elif Eralp, co-chair of the Linke parliamentary group, said five large companies would be affected, including Vonovia, and that about 160,000 apartments would move into municipal ownership. The compensation total is to be capped at 16 billion euros, a sum Eralp described as realistic. She said the aim is to stop rents from rising further.

Timetable and next steps

The three parties want to present a bill in mid-2028, and it would take effect one year after adoption. The law would be reviewed by the constitutional court in the meantime, and lawsuits are expected without doubt. Before any of this, the parties must decide whether to enter coalition negotiations at all. On Monday, 19 October, the SPD state board and the Greens' state bodies were due to decide whether to open those talks.

Vonovia and the federal government

Vonovia said the plan, in the form presented, is unconstitutional and would not withstand judicial review, and that the exploratory result changes nothing about its position. The company put its average rent in Berlin at 8.26 euros per square meter and said about 1,000 units are under construction in the city. It also pointed to a shortage of roughly 1.4 million apartments in Germany and argued that private investment needs reliable rules and legal certainty. Federal government spokesman Stefan Kornelius said on Monday that the coalition agreement of 1 July still applies, and he rejected the idea that the Berlin plans could harm Germany as an investment location.

For the time being, we expect a decision from the parties today.

The federal coalition committee decided on 1 July that a federal law should make socialization of rental housing through state laws impossible, but legal implementation is seen as difficult. Kornelius gave no timetable and said there is currently no reason to act.

FDP and security warnings

FDP general secretary Martin Hagen demanded that the federal government submit a bill excluding the socialization of housing, and he called on Chancellor Friedrich Merz to remove the SPD from government if it helps the Left into power in the capital.

The expropriation plans of red-green-red in Berlin shake the foundations of our economic and social order.

Sebastian Fiedler, the SPD's interior spokesman and one of 21 signatories of a party paper rejecting a coalition with the Left in Berlin, argued that weakening an intelligence service in one state weakens security across Germany.

Every weakening of an intelligence service in one state weakens security across all of Germany.

Fiedler also warned that a Left government could affect intelligence cooperation with Israel, because trust is a valuable asset. The Left wants to abolish Berlin's Verfassungsschutz in its current form, and part of the party is reportedly under observation by that office.

Divisions in the CDU, CSU and SPD

At its Deutschlandtag in Bonn at the weekend, the Junge Union unanimously passed a motion calling for Berlin to be excluded from information held by the Verfassungsschutz and the Bundeskriminalamt if a Left, Green and SPD coalition takes office. Berlin interior senator Iris Spranger (SPD) criticized the demand, said it endangers the work of security authorities, and called on the CDU and CSU to distance themselves from it. The Junge Union says it has about 90,000 members. Markus Söder called for a Brandmauer and spoke of "Honecker 2.0", while political scientist Albrecht von Lucke called that a "fatale Relativierung der DDR-Diktatur".

In Berlin, SPD state and parliamentary group leader Steffen Krach ended exploratory talks with the Left and Greens, but on Friday, 16 October, members of his own local branch, Abteilung Südende, passed two motions against a coalition with the Left and called for a membership vote. Krach had lost as a direct candidate in that district. The Reinickendorf district association also backs a membership vote, and the branch wants the SPD to take a constructive opposition role after 36 years in government.