Berlin lawmakers have developed a draft law for Germany’s first societal ownership legislation, according to reports. The proposed law aims to directly address public needs in essential sectors such as housing and the provision of energy, water and heating.
The outline for the legislation was agreed upon by the parliamentary leaders of the CDU and SPD in late June. The initiative is a response to the successful citizen vote of the “Deutsche Wohnen und Co. enteignen” (Expropriate Deutsche Wohnen and Co.) movement and is based on Article 15 of the German Basic Law.
Raed Saleh, leader of the SPD parliamentary group, stated that “societal ownership enables social market regulation for the federal states, even without expropriation”. He suggested that Berlin could, for example, restrict profit maximization or market-oriented behavior, potentially by imposing a price cap on all landlords for a period of five years. Saleh added that the framework law provides a basis for such measures, eliminating the need for federal exceptions.
However, the CDU has a different perspective. Dirk Stettner, leader of the CDU parliamentary group, emphasized that “the new law is intended to create a legal framework; it is not intended for a rent cap”. He affirmed that the CDU would not support a rent cap.
Four years ago, the Federal Constitutional Court declared the rent cap implemented by the previous government unconstitutional due to a lack of legislative competence. The governing coalition agrees that the state could save money with the societal ownership law. While acknowledging that the effect is similar to expropriation, Saleh noted that “societal ownership allows for such measures with much lower compensation”.