In a referendum held in Berlin, Germany, residents have voted in favour of socializing over 240,000 rental properties that are currently owned and managed by private real estate firms. This is the latest attempt to combat rising rental prices in a city where residents earning the average salary must spend up to 62 per cent of his or her net income on rent.
Despite being over 30 years since German reunification, the country continues to suffer from an east/west divide. The average salary in Berlin is lower than other major cities yet rental prices have increased markedly in recent years. According to the findings of the ‘Deutsche Wohnen & Co enteignen’ Referendum study, 17 out of 19 Berlin’s neighbourhoods are considered unaffordable to the average earner.
Meanwhile, the city of about 3.7 million is comprised of a huge contingent (80%) of renters vs. homeowners, which has made Berlin an attractive market to property investors. Berlin’s property market is dominated by large real estate firms, some of which own tens of thousands of the city’s rental units.
Contributing to the affordability challenge, Berlin is in the grips of a housing shortage with estimates suggesting the city needs about 100,000 new dwellings per year, a number it is currently nowhere near producing.
If approved, Berliners’ vote to take public ownership of private rental properties could have worldwide ramifications and set a precedent for similar initiatives in other cities struggling with affordability issues.
For more information on the Berlin referendum results, click here: https://sweetspotpr.com/