The Federal Government intends to prevent the socialisation of private rental properties through legislation at state level in future. The CDU/CSU and the SPD had already agreed on such plans in the summer; following The Left’s election victory in last Sunday’s Berlin state election, Chancellor Friedrich Merz (CDU) has now announced their swift implementation. This could send an important signal to Berlin’s property market, particularly with regard to investment security. This is because The Left, which, with 25.7 per cent of the vote, emerged as the largest party in a Berlin state election for the first time, had made the socialisation of large private housing companies a central theme of its election campaign and intends to implement the plan should it join the government. In recent days, WELT, Tagesschau, rbb24, Tagesspiegel and Immobilien Zeitung, amongst others, have reported on the conflicting plans at federal and state level and their potential impact on the housing market.
At the heart of the debate is Article 15 of the Basic Law. In principle, this allows land, natural resources and means of production to be transferred into public ownership or other forms of public management in return for compensation. However, this provision has never been applied in practice. The Federal Government now wishes to introduce legislation to prevent the federal states from nationalising private rental housing stock on this basis. The CDU had already stated in July that the coalition had decided that the nationalisation of private rental housing through state legislation should no longer be possible in future, and had announced a federal law to this effect. Following the Berlin election, Merz reaffirmed this plan.
This means that, following the Berlin election, two opposing political agendas are now coming into direct conflict. The Left Party’s lead candidate, Elif Eralp, had already announced during the election campaign that, if her party joined the government, she would seek to bring about the socialisation of large housing companies. Following her party’s election victory, she reaffirmed this position and stated that The Left would pursue socialisation from day one. The party also refers to the 2021 referendum on ‘Expropriate Deutsche Wohnen & Co’. At the time, 57.6 per cent of voters had voted in favour of the Berlin Senate taking steps to transfer the property portfolios of large private housing companies into public ownership.
Five years later, however, public opinion among Berliners now presents a markedly different picture. According to an exit poll by Infratest dimap, 51 per cent of Berliners now oppose the socialisation of large private housing companies in return for compensation, whilst 37 per cent are in favour. The BerlinTrend survey in early September had already shown, for the first time since the referendum, that a majority were against such plans. It is also noteworthy that, in the post-election survey, only among Die Linke voters was there a majority in favour of nationalisation of 72 per cent. At the same time, 57 per cent of Berliners were in favour of developing vacant land more intensively to create additional housing.
A study by the German Economic Institute (IW) in June 2026 had also warned of the potential economic consequences of nationalising private housing companies in Berlin. The report was commissioned by Berliner Sparkasse, Berliner Volksbank, Deutsche Kreditbank and Investitionsbank Berlin. The authors identify Berlin’s fundamental housing-market problem as supply failing to keep pace with demand. Nationalisation would do nothing to change this, as it would not create any additional housing. From a social policy perspective, too, the authors consider the measure to be of limited effectiveness: more than 40 per cent of tenants in the housing stock potentially affected have a household income above the median income. A change of ownership of existing flats would also do little to help people looking for housing.
Furthermore, the IW highlights potential implications for investment and Berlin’s status as a business location. Drawing on international examples, the authors point to the risk that socialisation – particularly where compensation is below market value – could lead to higher risk premiums and a withdrawal of capital. For Berlin, they anticipate that such a scenario would not only affect the property sector, but potentially also other sectors that could fall within the scope of Article 15 of the Basic Law. The BBU (Association of Berlin-Brandenburg Housing Companies) also warns of investment risks that could already arise from the ongoing debate on socialisation. BBU board member Maren Kern therefore calls for a reliable regulatory framework that provides certainty beyond individual legislative periods, as well as for the continuation of the measures introduced in recent years to promote faster housing construction.
“It sends an important signal to the Berlin housing market when long-term legal certainty for private investment is established at federal level. The latest figures also show that many Berliners now view socialisation of housing much more critically than they did at the time of the 2021 referendum. The real problem facing our housing market remains the massive shortfall in supply. A change of ownership of existing flats does not create a single additional flat. Berlin therefore needs, above all, a reliable framework for investment, faster planning and approval procedures, and significantly more new housing construction. Only by increasing supply can lasting pressure be taken off the housing market,” says Jacopo Mingazzini, CEO of The Grounds.
