According to Marcel Fratzscher, President of the German Institute for Economic Research (DIW), the expropriation of residential real estate conglomerates in Berlin would constitute a “serious mistake.” Speaking to the newspapers of “Redaktionsnetzwerk Deutschland,” Fratzscher argued that such a socialization of housing would ultimately lead to an increase in the vast majority of rents and would create even less available living space.
Furthermore, the costs associated with the expropriation would diminish Berlin’s financial resources, resulting in less money to invest in vital areas such as schools and robust infrastructure. The DIW chief stated that everyone would ultimately bear the cost of a decline in essential public services.
This debate is currently a major talking point during the Berlin election campaign. The Berlin state association of the Left Party has committed itself to the goal of socializing large housing corporations, finding themselves ahead in a recent Forsa poll. In contrast, other political parties, such as the CDU, are strictly opposed to expropriations.
While Fratzscher acknowledges that “Berlin has a major housing problem and the rising rents are unacceptable,” he maintains that the solution lies not in government seizures, but in “smarter regulation and a significant expansion of housing supply.”
