Die Linke wins Berlin election and renews push to expropriate 220,000 apartments

Election outcome and housing platform

Die Linke emerged as the strongest party in the Berlin Abgeordnetenhaus election, securing 25.7% of the vote ahead of the Christian Democratic Union at 18.8% and the Alternative for Germany at 16.3%. Lead candidate Elif Eralp announced plans to seek a coalition with the Greens and the Social Democratic Party, making the socialisation of large corporate housing portfolios a condition for negotiations. The policy aims to implement the 2021 "Deutsche Wohnen & Co enteignen" referendum, in which 59.1% of voters approved transferring corporate residential portfolios exceeding 3,000 units into public ownership. Under the proposed model, Berlin would establish a public law institution to borrow funds, acquire an estimated 220,000 to 240,000 apartments, and manage rents.

Federal pushback and constitutional hurdles

Federal leaders from the CDU and CSU responded by demanding federal legislation to prohibit federal states from socialising private housing portfolios. In July, the federal coalition leadership of the Union and SPD agreed to draft legislation barring state-level socialisation statutes. CSU Secretary General Martin Huber referred to the initiative as a socialist suicide mission that would deter private capital. Linke party leader Luigi Pantisano argued that the federal government will not succeed in overriding Berlin voters and called on the SPD to oppose the federal ban. Pantisano noted that public authorities routinely expropriate private property for federal motorway construction under Article 14 of the Basic Law.

The main point is to send a clear message to international investors, which is: there is no expropriation of private property in Germany.

Public sentiment and legal assessments

Public support for housing expropriation has shifted since the 2021 referendum. A post-election survey by Infratest Dimap found that 51% of Berlin voters now oppose expropriating private landlords with compensation, while 37% remain in favour, matching findings from early September. Constitutional lawyer Ulrich Battis stated that the expropriation initiative is likely to fail in court on proportionality grounds under Article 15 of the Basic Law, a provision that has never been applied in the history of the Federal Republic of Germany. Berlin SPD lead candidate Steffen Krach and federal Green Party co-leader Franziska Brantner also voiced reservations, though the Berlin Green Party continues to support the initiative.

Market reaction and corporate response

The election result put real estate stocks under pressure across German exchanges. Shares of Vonovia fell to 17.06 euros on Tuesday, marking their lowest level since the summer of 2023 and bringing the stock's year-to-date decline to over 30%. Together with its subsidiary Deutsche Wohnen, Vonovia holds more than 130,000 flats in Berlin, with an average existing rent of 8.26 euros per square metre and new lettings at 10.80 euros. Rating agency Scope indicated that while Berlin's AAA rating remains supported by economic growth, credit ratings for landlords including Vonovia, LEG Immobilien, Grand City Properties, and Heimstaden could face downgrades depending on compensation structures. Vonovia CEO Luka Mucic pointed to the company's construction of approximately 6,000 flats since 2013 with 1,000 more underway, while arguing that property seizures will not expand housing supply.

Socialisation does not create a single new flat.