Expropriation and Berlin

There's a short paragraph in the German Basic Law (the Constitution) that says "Land, natural resources and means of production may, for the purpose of socialization, be converted into public ownership or other forms of public service by a law governing the nature and extent of the compensation."  It's Article 15 of the Basic Law.

In simple terms, it means that the government, the 16 states, and the cities of Germany....have the right to 'seize' or expropriation a piece of property or a building, in the interests of the people.

Berlin has reached a stage where they (the political players) believe that a housing crisis is unfolding. One can look over the past forty years, over various urbanized cities (Berlin, Frankfurt, Hamburg, Munich, etc), and realize that affordable housing has spiraled into a major mess.  There are numerous factors to this, but I'll lay the blame to three central features:

1.  From the end of WW II to the 1980s....public housing was built at a hefty rate by city governments.  You could say that it was turboized in the 1950s, and grew at a lesser nature in the 1960s/1970s.  Cities didn't really want to be the mover or shaker (the permanent landlord) over this regional empire.  It meant you had to update/modernize/renovate, and frankly, the cash flow from 'rent' wasn't ever going to fix this problem.  So to a great extent....the cities (having the right and ownership) sold properties to real estate holding companies.  Those companies continued to rent the apartment buildings but the complaints to modernize continued on, and they renovated....passing the cost onto the renters, and escalating prices.

As you might imagine, some of the properties doubled up in rent prices, easily going from 450 to 700 Euro a month.....on up to 1,000 to 1,500 Euro a month.  Naturally, people moved out, and looked for better affordable places.  This escalation triggered competition, and fewer affordable places were to be found.

2.  Added to this chaos....land speculation in the inner cities really took off in the 1990s.  People bought lots and held onto them for ten to twenty years.  In a city like Frankfurt, you can probably find 300 separate lots or older empty buildings.....waiting for speculation to reach some major profit.  Without access to those properties, affordable housing simply won't be built.

3.  Around twenty years ago, neighborhood groups and housing associations thought that they could 'force' cities to go and build affordable apartment housing.  You can't find any major German cities who are enthusiastic about this idea.  Sales taxes and property taxes are all limited in money-generated across the nation.  So a city has limited options in getting loans to build major buildings like this, and if you say it's an affordable-rent project.....just how much money will you turn in....each month?

So where does this Article 15 lead onto?  Well, there's this initiative in Berlin, where an association wants the city use legal means to seize housing.  The number being discussed?  200,000 apartments.

You'd present a judge's order to some company (the owner of the building) and just say......your ownership just ended, and it's now city property.

But there's this compensation angle to this.  German law also says that you can't seize without compensating the first owner.  How much is this package?  There's a discussion underway....at the bottom of the estimate, the city figures near 18 billion Euro (roughly 24 billion US dollars).  The companies involved suggest it might be closer to 35 to 40 billion Euro (roughly 42 to 50 billion US dollars).

Who'd pay compensation?  The city of Berlin (not the federal government).  Course, this seizure would mean that some judge would have to get into the middle of each single building seized, and have some independent guy assess the value.   So you could have a 1958-constructed 40-apartment building worth 7 million Euro, and a 1988-constructed 40-apartment building worth 10 million Euro. Values will differ on each building, the assessment officer, and the final tally.

Has this expropriation idea ever been done before, on housing?  No.  That's been mentioned a number of times.  No one is sure if it's technically legal, and some say that bringing up one single case....might require two years minimum to go through the courts, and reach some national level.  Each case being challenged?  Well, that's been mentioned via journalists as well. So you could have well over 500 buildings seized and 500 court cases lined up.

Can the city even afford 18 billion Euro?  That's another issue which several folks have talked about via news reports.  The city does have a budget, and wing some bank loan.  But  there's a curious side to the finances here.  The intent here is to seize apartment buildings, and then suddenly drop the rent (say from 900 Euro for a 2-bedroom, to 500 Euro).  If you show up at a bank and demonstrate the numbers, suggesting that you need 18 billion, but that your rental 'profits' will never pay for more than 4-percent of the loan amount each year....bankers will just start laughing.

Then the issue of renovation comes up.  Do you, as the city management, want the responsibility of renovating some building, but never get any real pay-back over the renovation done?  I can't think of too many city government who'd want that responsibility.

The political punishment angle?  Well, that's another part of the story as well.  If you have 200,000 apartments under this city-game, who is the chief housing director, and just how political will that job become over a decade?

If you do go and grab the property.....what happens to potential future apartment construction projects?  Are they now dead in the water?  More than likely, no one will want to build any buildings for apartments for the next decade because you can't be sure about the future.

So just how likely is expropriation likely to occur?  I suspect that a test-run will occur, and a dozen properties will be selected to see how the legal system will handle it, and how expensive this idea can get.  From the start to the finish, I would speculate five years will be involved, and the price-tag for the buildings will shock a number of housing associations and banks.  After that, it'll be dropped as a major project....just my humble opinion.

If this did go through, with 35-billion Euro flowing to the companies owning the properties?  This is curious question left with this story.  They might actually go and buy up property on the far outskirts of Berlin, and entice the middle-class with medium-value condo development. 

Ten Rules on German Toilets

First, when you board a German train or stop at a German train station....if you expect anything other than sandpaper-style toilet paper....you are kidding yourself. Buy some soft stuff and carry it with you when you travel via train. Why do they maintain this standard? Cheapness throughout the Bahn world.

Second, when you travel on these cheapo bus tours, and Huns pulls up with the 3-star bus to carry you and your forty buddies on a day-trip to Mannheim....don't expect much of the bus toilet. If it flushes....you should be happy enough. If it's big enough for you to actually lower your pants without knocking your head against the door....that's a great feature. If Huns actually left some nice smelling soap there, that's a plus.

Third, ADAC (your friendly car club) has a rating system for autobahn rest stops and toilets. Naturally, you'd laugh when this is mentioned but after you've been to twenty of these....you realize that there are some one-star autobahn toilets where it's fairly nasty and you should avoid these. So joining ADAC and reading up on these statistics might be helpful.

Fourth, when you buy a house in Germany....the first thing after you get settled in....is to get a relationship with a local plumber you can trust. Some Germans will stick with their plumber for forty years....just to ensure he comes over in an emergency when you desperately need his help in the toilet.

Fifth, if you've gotten use to US-made soft toilet paper....no matter how far you look over your local German shop....you will never find the same quality stuff. So either accept the number two quality or start looking for an American who has access to the military commissary system on US bases.

Sixth, German women are awful particular about what smell you leave in their toilet. If you visit a neighbor and have to unload a foul smell in their toilet....it's best to spray as much as you can....open the windows....and just hope her anger isn't raging. You may never be invited back. It's best to leave early and do your business in your own toilet.

Seventh, typically your friendly bar toilet in your village pub is cleaned once a week and kept in good condition. One out of every three toilets in a pub are likely unheated. In small restaurants....it's just as bad. It's best to do your business and leave as quickly as possible.

Eighth, when you see a lady sitting at the entrance of the hall for autobahn or county fair bathrooms....she's the cleaning lady. You will notice a plate in front of her with change. It's the custom that you toss in 50 cents minimum. She is ensuring some sanitary customs are maintained. Don't sit there and think this is a free deal.

Ninth, when you've been at a fest of some type and the vast number of folks are fairly drunk and you notice dozens of men just walking outside and leaning against some building or wall to urinate....no, it's not the custom or accepted by the locals. The cops will apprehend you for some charge, if they feel like it.

Tenth, German guys have no issue in just pulling over by the side of the road and relieving themselves right there. Folks will drive by and just notice....saying nothing. Everyone hates this image, but half of the German male population readily accepts this as OK.

E-Rollers in Germany

I spent five days in Barcelona over the past week, and one of the significant things I noticed there...is the use of E-Rollers (basically the kid's push-cart, with batteries and an electric motor 'pushing' it along).  The curious thing is that you could see the bigger types which got up to 30 kph (18 mph), but the max sizes go up to 65 kph (roughly 40 mph). 

Germany has been rather slow on 'authorizing' the E-Rollers.  Chief reasons?  The Germans debated the idea of a license or mandatory training requirement, and they debated over where it'd be authorized to be used (the blunt push is to make it only street-useable or on bike-trails, with NO sidewalk usage). 

Part of this discussion involved limiting the E-Rollers to strictly bike trails or streets.  As I noticed in Barcelona....E-Rollers were everywhere.  People got themselves to a subway station...boarded the train with the E-Roller, and then rolled off to work at the destination station.  The Spaniards had no real regulations over the E-Rollers.

The cost factor is what gets me.....you could go fairly cheap (with a battery pack/motor) and spend near 800 to 900 Euro ($1000 to $1100).  You could buy the full-up 65 kph E-Roller for 1,700 Euro (meaning $2000).

A public hazard?  Germans are quick to jump onto this topic, and I suspect in an average year.....at least 3,000 injuries will be reported, and at least ten folks will die via some E-Roller accident (either the user or the street pedestrian).  Bottom line?  Expect to see more in the general future. 

Terror Act Prevented

Late today in Wiesbaden, a story came out via the local news.....some 'kid' (18 years old) had attempted to go onto the Darknet and purchase a gun....to kills locals.  In this case, cops were monitoring things, and intercepted the deal.....delivering a fake gun to the 'kid', and stopping a potential shooting.

The 'kid' in this case?  Cops only say that he's a dual citizen situation (German-Iranian).  They add, in some cryptic way.....they suspect he has mental issues.  In what manner, is an unknown.

Again, I emphasize how the German cops are aggressively monitoring the internet and preventing terror acts before they occur. 

Growth Expectations Cut by 50-percent for 2019?

According to German news reports today.....five different financial organizations have lowered their expectations for the German economy in 2019.  Growth?  Cut by 50-percent, with the numbers they came out with at the end of 2018, and looking at expectations for 2019.  Chief cause chatted on by the five? BREXIT.

Recession chatter?  For around six months, if you follow the German business news people.....they've been talking more and more over a recession starting in 2019. 

Blame to shift around by fall over job losses, BREXIT failures and a start-up of a recession?  Yes, more than likely.  Three state elections occur in the fall here in Germany, and various opposition parties to both the CDU and SPD.....might come out in full-force with the blame-game.

So the negative talk for months over the UK and how they need to just accept the one and only EU deal?  This might come back to haunt Chancellor Merkel and the pro-EU crowd within the German government. 

The Lack of a German Asylum 'Path'

You can go back to 2013, when all the asylum and migration 'troubles' started in Germany, and virtually every part of the problem relates to no clear 'path' (policy).  Even going into the sixth year of this....the CDU-CSU-SPD coalition stumbles along and cannot find a policy that is mutually agreeable.

In the news this morning, if you follow German public TV, there was a meeting last evening between Chancellor Merkel and the various 'players' of the CDU, CSU and SPD parties.  The topic?  Deportation policies and the ease of skilled-labor immigration.  Yes, you'd think that various policies would have existed over the past three decades for both situations, but no.....they need to invent an agreeable policy.

If you read through everything....the CDU-CSU crowd wants a strict policy on deportation.  If you get the papers to deport, and aren't agreeable to deportation.....then they'd like to put you into a special circumstance, or a controlled atmosphere.  The SPD?  They oppose that method because in various ways, you are punishing the asylum requestor. 

You would think, that the minute that you failed the visa process....the title or wording for asylum requester....ought to end.  At that moment, you ought to be called a deportee. 

The second topic concerned skilled or educated folks, who want an entirely different path into Germany.  Most German companies will say in public statements that they need this type of doorway to exist.  The chief problem?  If you watch enough of the interviews and chats, it comes down to what types of skills or education you are talking about, and if you are arranging the door for certain nationalities that will gain favor over other nationalities.

An example of this.....there are a fair number of Russians who have a degree in science or engineering, and they'd like to resettle into Germany.  Finding the same number from Middle Eastern countries?  Not quiet as much.  The same might be said for people from India....that they might have a plus-up chance to enter. 

So the political folks argue over this, and how to meet in some common ground is virtually impossible. 

A German 'Drama'

I sat and was reading through various news media reports today, and there's this one report on a pro-asylum German rescue vessel organization in the Med (called Sea-Eye).  At some point last year, Italy started to toughen up port entry situations, and disallow any vessel trying to bring in rescued migrants from the African coast. 

This was resolved temporarily by France and a few other European countries on the Med, but their resolve in this involved the EU coming to order a dispersal of rescued members to various EU member states.  That hope dissolved over the past six months because the EU can't 'order' nations to accept migrants.  So almost no country in the Med wants to entertain rescue vessels.

Well....this Sea-Eye group....being a German-flagged vessel, says now that they just might entertain the idea of taking their 60 rescued migrants all the way out of the Med, around the coast of Spain and France, and dock in Hamburg.

The word 'drama' appears with the story because it has implications on the port of Hamburg, the Hamburg state government (it's a state by itself) and the German Interior Ministry.  The port wouldn't really care one way or another.  The city of Hamburg?  It's a pro-asylum region for the most part, and they'd likely make a big positive PR moment out of this.  But the federal government's Interior Ministry?  No, they wouldn't really entertain this idea or accept the idea of this being an acceptable rescue. 

Making a bigger mess out of this?  Go and figure the travel time, from the Libyan-Italian region of the Med, and you are talking about ten days for the craft to make this journey.  If this were to be proven successful, and migrants could be 'dumped' into Germany this way.....you'd likely see older passenger vessels rented out by the migrant-rescue crowd, and a 500-to-1000 passenger situation occurring on a weekly basis. 

The pressure on Germany?  Well, it'd mean that the Chancellor, the CDU-CSU-SPD coalition, and the Bundestag would have to go into some stall act, and just pretend no one was in charge....allowing frustrated Germans (the anti-asylum groups) to side with the AfD Party, and inflate their numbers even more.  Yes, the word 'drama' is appropriate in this case.

Pro-Asylum Chatter

It came up in the German media today that roughly 250-odd pro-asylum groups have signed up to a letter that is to be sent to Chancellor Merkel.

The topic?  Three requests: (1) stopping the repatriations to Libya, (2) the creation in the 'EU' of 'safe harbors' (meaning Italy, France, Spain, Greece, etc), and (3) development of an plan for 'boat people'.

Why target Merkel for the agenda plan?  Well.....more or less....the EU's 'magnetic north' position is calculated mostly by Merkel and her insider crowd to the EU.  If you can convince her to establish a priority, the belief is that the EU would move that direction.  This was logically correct up until the last two or three years.  Presently, I would say that Poland, Czech, Hungary, Austria, and the UK were a counter-balance to that logic now.  Although in a matter of days, the UK's position in the EU won't matter.

So you look at the three requests.

First, if you stop the repatriations to Libya....where do you deposit the rubber raft crowd, if rescued?  The pro-asylum folks want it to be a European country.  If the EU came up with Tunisia, or Algeria....it'd just infuriate the pro-asylum folks.  Presently, the EU has some kind of payment plan (cash) which helps their position with the Libyans on repatriations.

Second, this safe harbor discussion?  They basically want the EU to 'order' Italy to accept any rescue vessel with migrants rescued from the rubber rafts.  Even if Merkel did get the EU to order Italy into that position, I would doubt that the Italians would comply to this order.

Finally, you come to the rescue plan for the 'boat people'.  To be honest, most of these rescues occur with rubber rafts, although older fishing vessels have been used (mostly dragged out to some point and left for the rescue boat to pretend that they found them).  What the pro-asylum folks want is a document which says a hundred folks get rescued, and then they get dispersed to the members of the EU. Five here, one there, twenty here, etc.  So far, even though Merkel has chatted on this subject for five years now.....the members of the EU are skeptical of how this would work, and some want the right of refusal (something that the EU cannot allow in the talks).

What'll happen with the request?  It'll be brought up and discussed at various EU meetings, but frankly....it's difficult to see how the EU mechanism can be made to change the attitude of various countries on this topic.  If this were a one-time situation of 10,000 migrants, then it'd be discussed....but no one can ever say that it's a one time, or one-year project.  You would be opening the door to potentially a million to ten-million migrants per year, and no one sees that being acceptable. 

So this is all for show and PR-hype?  Yes, that's the simple side of the story.