Berlin Housing Crisis Gets More Interesting

 One of the things you want to watch for on the 26th of September....is the Berlin City election (same day as the national election).  

This city parliamentary election will open up the next bit of chaos for the city in terms of the call for a referendum on the expropriation of large housing companies.  In simple terms....various groups are now calling for around 240,000 apartment around the city.....to revert back from private holding companies to public housing run by the city.

The general talk right now?  If you follow RBB (public TV in Berlin), most of the story is explained.

The groups who are pushing for expropriation....think they can force this issue to occur (over the 240k apartments) with a compensation package of 8-billion Euro (roughly 10.5-billion US dollars).

Where would the money come from?  Well....if you go digging....it'd be a bank loan that the city would take. My humble guess is that it'd probably take at least a dozen years...if not twenty....to accomplish such a loan.

But here's the thing....most of the experts (even members of the city senate itself) say that the true market value comes to 36 billion Euro. That's four times the value that first group is chatting about.

Where this leads onto?  The German Constitution (Basic Law) says in blunt direct language....when conducting exportation, the companies involved MUST be compensated.  It'll shock the pro-exportation folks when they learn that they can't just make up a number for a value of something.  

When the game starts up and the grabbing is conducted....a legal authority will be drawn up and judges will state the obvious....you can't offer a quarter of the true value.  My suspicion is that about six months into this 'adventure'....judges will ask the exportation crowd if they did any homework, and grasp that the true value 36 billion Euro....is what you need to come up with.

What'll occur next?  Some attempt by this crowd to get the Bundestag (the federal folks) dragged into this and just 'gift' them the remaining 28 billion Euro.  I don't think they will be that agreeable (meaning the gift will probably be less than five billion).  So the city of Berlin will be tied up to a loan deal of roughly 30 billion and face decades of financial issues in paying back the loan.

Any hopes of rents in Berlin really decreasing over the next decade?  I'd ask the question....how?  The odds of any renovation projects over the next twenty years.....how?  

There's going to be a big mess occurring in Berlin in 2022, and the current housing crisis will only deepen and widen in this period.