Berlin expropriations would not ease housing shortage, study shows

Expropriating Berlin Landlords Won’t Ease Housing Shortage, Study Finds

Study Examines Impact of Expropriating Berlin Landlords

BERLIN, Sept 29 (Reuters) - Expropriating large residential landlords in Berlin would not ease the city's housing shortage and could make its rental market more rigid, according to a study by the Kiel Institute for the World Economy published on Tuesday.

Political Context and Proposals

Elif Eralp, the far-left leader pushing to take over as mayor of Berlin, has pledged to expropriate more than 200,000 housing units from corporate landlords in a campaign that made the party reach its best result in the German capital in this month's election.

Key Findings from the Study

Investment Alternatives and Housing Supply

• If funds required to compensate companies such as Vonovia were instead invested in construction, Berlin could build up to 71,000 additional apartments by 2045, the economic institute said. That could leave asking rents up to 8.7% below levels otherwise expected by then.

Market Value and Compensation

• The affected housing portfolios have an estimated market value of €40.2 billion ($45.6 billion), although compensation could be around half that amount, the study said.

Ownership Versus New Construction

• "What matters is not who owns the apartments, but whether new ones are being added," said co-author Jonas Zdrzalek.

Potential Market Effects

Impact on Tenants and Mobility

• State ownership would widen the divide between tenants with regulated existing leases and prospective renters, reducing mobility and worsening inefficient use of housing, the study said.

Additional Information

($1 = 0.8821 euros)

(Reporting by Christian Kraemer, writing by Maria Martinez, editing by Thomas Seythal)