German constitutional court scraps Berlin rent cap: fight back!

The German federal constitutional court has ruled the rent cap in Berlin as unconstitutional, bringing to an end the Berlin rent cap experiment. This means that Berlin tenants will have to dig deeper into their pockets to be able to afford a roof over their heads. The German left-wing party DIE LINKE and the German Trade Union Confederation (DGB) with its eight member unions now have to go on the offensive!

Political context

On 26 September 2021 the general election will take place in Germany. After 16 years, the Merkel era will come to an end. It is unclear at the moment who the German conservative party (CDU/CSU) will choose as her successor. A hidden civil war of political backstabbing is raging in the CDU/CSU, during a historic crisis of the party. After reaching a peak of 40 percent in public opinion polls when the coronavirus pandemic gained momentum in early summer 2020, their support has plummeted again and is back at around 26 percent – the level that the CDU/CSU reached in 2019. Their catastrophic crisis management; the constant restriction of private life, while people are mandated to continue to work; debacles over testing; vaccination chaos, as well as corruption scandals with dodgy deals for surgical masks are all the factors that have shaken the public image of the CDU/CSU in large layers of society.

The deep crisis of the party now revolves around the question of who will be the next candidate for chancellor: Laschet (CDU) or Söder (CSU). While within the party Laschet has more support, the general conservative public is significantly more in favour of Söder. We cannot know now who will win the race, but we can say for sure that the crisis of the CDU/CSU will not be over in either case. Furthermore, it is not decided yet which party will lead the next government. The German green party Die Grünen are catching up with the CDU/CSU in the polls. In the end, they may have the possibility to appoint the chancellor.

Regardless of who ends up leading the government, it will be a government of crisis. The economic crisis is hitting Germany very deeply. Many people still have to work short-time (Kurzarbeit - a government scheme that allows companies to reduce the working hours of their employees with the state paying 60 percent of the resulting loss in wages). In spite of this, in the industrial sector and in many other sectors, there have been layoffs and closures. The living and working conditions of broad strata of the working class and youth have been stagnating or declining for decades. Many simply can no longer afford their rent or cannot find housing at all. Politicisation and radicalisation are steadily increasing in these layers, even if they have not yet found expression in the mass organisations of the working class or through mass movements.

The Berlin rent cap

Berlin Aerial view 2016 Image AvdaThe Federal Constitutional Court declared the Berlin rent cap unconstitutional following a lawsuit by members of the Federal Parliament from the CDU/CSU and the German liberal party FDP / Image: Avda

In this situation, the Federal Constitutional Court has declared the Berlin rent cap unconstitutional following a lawsuit by over 280 members of the Federal Parliament from the CDU/CSU and the German liberal party FDP. This provocation could represent a decisive turning point in the class struggle and have a huge impact on the outcome of the September elections. But for this, the German left-wing party DIE LINKE and the DGB unions must now take the offensive and organise a fight back against the diktats of the capitalists and the bourgeois governments.

On 20 February 2020, the Berlin government coalition of the DIE LINKE, the social democratic party SPD, and the green party Die Grünen legally capped existing rents for 1.5 million apartments in the German capital at 2019 levels. This decision affected nine out of ten rental apartments and was initially temporally limited to 2025. Excepted were all new apartments that were ready for occupancy by 1 January 2014, as well as council flats with fixed rent and apartments in dormitories.

According to the Senate of Berlin (the government of the Berlin state), around 340,000 apartments were affected by the reductions in existing tenancies. A survey by the German bank “Sparkasse” showed that just 22 percent of Berlin residents were able to reduce their rent costs. Furthermore, landlords avoided the rent cap in various ways, as stated by Berlin Housing Senator Sebastian Scheel (DIE LINKE).

Five months before the parliamentary elections on 26 September, the flagship project of the Berlin coalition government between the DIE LINKE, SPD and the Green Party has now been declared illegal – even though the rent cap was widely supported, as in Berlin rents have been skyrocketing for years now. Between 2008 and 2018, rent prices for new tenancies went up by 104 percent. Therefore, it is no wonder that the rent cap was also popular among the voters of the CDU and FDP.

The German constitutional court: a pillar of capitalism

Still, 284 members of the German federal parliament from FDP and CDU/CSU initiated a review of the rent cap through the Federal Constitutional Court, which they submitted in a joint application, to determine whether the state of Berlin is entitled to legally intervene in determining the level of rent prices.

The German Constitutional Court published its decision on 15 April 2021 in a press release. According to the verdict, the rent cap is now null and void. It is incompatible with the German constitution, because, according to the German civil code, the legislative power lies exclusively with the federal government. In other words, the rent brake legislation introduced by the German federal government in 2015 – which had hardly any effects, as one can see in the dramatic increase in rent price everywhere in Germany, especially in large cities – cannot be replaced by single federal states’ regulations.

The verdict is a slap in the face to millions of Berlin workers, students and pensioners. They often have to give over half of their income in rent, or cannot find adequate housing at all. Evidently, the German Federal Constitutional Court does not care about the welfare of the working class. This is hardly surprising, since the court is part of the German bourgeois state – which has primarily one job: securing the private property and profits of the capitalists. The safety of private property is incorporated in the German constitution and is a central guideline for the courts. This has become particularly obvious at this point.

Democracy only for the rich

Lenin wrote that the bourgeois state and the capitalist class are connected by a thousand threads of legal and illegal corruption. This becomes obvious when one looks at the members of parliament and their parties. Last year, for example, 1.5 million euros in donations from the real estate industry flowed into the coffers of the CDU. Of this amount, the Berlin real estate investor Christoph Gröner alone donated 800,000 euros to the party. How can this be understood any other way than a reward for the review application of the Berlin rent cap which the CDU/CSU submitted?

Unfortunately, the working class, students and pensioners lack the money to bribe members of parliament. They also lack the important direct links and relationships between party leaderships, high-ranking public officials, and the capitalists by means of their education, memberships of students’ fraternities, golf clubs, etc. These doors are closed to the working class. Therefore, we cannot rely on our “democratic” state to be “neutral” in asserting the interests of the majority of society against the real estate industry. This democracy, as one can once again see, is a democracy only for the rich.

The capitalist class is delighted

Landlords’ associations, real estate companies and their political representatives are delighted by this decision. They once again go on the ideological offensive. The Bundesverband Freier Immobilien und Wohnungsunternehmen and also the Dachverband Zentraler Immobilien Ausschuss (both lobby organisations of the real estate industry) are in a celebratory mood. After the announcement of the verdict, the stock prices of German real estate company Deutsche Wohnen went up 6.8 percent to a five-month high. Other real estate companies like the Adler group’s stocks increased by 7.6 percent and Vonovia by 2.9 percent. Investors are looking forward to cashing in on dividends from the rising rent prices.

Horst Seehofer Image Michael LucanDisgusting right-wing demagogues like Horst Seehofer have gloated about the end of the rent cap / Image: Michael Lucan

The Building and Housing spokesman for the FDP parliamentary group, Daniel Först, went on about how the Berlin senate abused Berlin tenants for an ideological experiment – which “went flat-out wrong”. Also, the leader of the Berlin FDP, Sebastian Czaja, said that it will take a long time for the city to recover from this “artificially created conflict between tenants and landlords” – as if the sky-high rent prices were not the cause of this conflict. The chairman of the Berlin CDU members of parliament, Jan-Marco Luczak, voiced how, with its verdict, the Constitutional Court showed that “ideology can never precede the constitution”.

Statements like these underline which side these political bloodsuckers are on when they brand the provision of affordable living space as an ideological question. Even worse, Luczak’s party colleague, the chairman of the Berlin CDU and top candidate for the upcoming election to the Berlin House of Representatives, Kai Wenger, stated in a demagogic fashion that the senate deceived Berlin tenants with their rent cap. He also put the blame on the senate should tenants now lose their apartments because of rising rents or repayment claims. But it was precisely his party that played a central role in scrapping the rent cap in the first place.

Another demagogue of the conservative party, Minister of Construction Horst Seehofer, was also delighted by the verdict against the rent cap. He, like many others, claims it hindered the construction of new or the renovation of old apartments, implying that a rent cap would make such projects less interesting for investors. But with these words, they only state one truth: that private industry has no interest at all in providing affordable housing to Berlin residents – the only thing they are interested in is the handsome profit they can make out of it.

Popular petition to expropriate real estate companies like Deutsche Wohnen

Therefore, it is crucial for the organisers behind the popular petition Deutsche Wohnen und Co. enteignen (a mass movement which calls for the expropriation of big real estate companies) to go on the offensive. As the rent cap is now nullified, the campaign must be all the more confident in advocating for expropriation. For this, DIE LINKE and the DGB unions must work together. The reactionary pro-capitalist lobbies have displayed their relentless determination to fight against the rent cap. They will attack this initiative even harder.

Therefore, it is absolutely true that we, just like DIE LINKE stated in a recent press release, want “to promote the socialisation of apartments from big real estate companies, as demanded by the petition Deutsche Wohnen und Co. enteignen”.

Mass demonstrations and rent strikes in Berlin

The movement must retake the initiative. Mass demonstrations have to be organised in Berlin. On 15 April, a spontaneous demonstration with 10,000 to 15,000 attendees showed the simmering anger in society. This must be the starting point for a broad mobilisation of the Berlin workers and tenants. If landlords now will in fact demand repayments of rent or raise the rent levels, the tenants have to be organised and able to collectively defend themselves.

It is the job of the DIE LINKE, together with the DGB unions to organise a rent strike, so no one is left alone in facing the demands of the landlords, risking eviction from their apartments. The demands for repayments may reach four-digit amounts, leaving many in an impossible position. Such demands could be an existential threat to some.

It is not enough to “continue to look for creative solutions and exhaust all legal possibilities to decrease rents in Berlin”. In order that such legal possibilities are not again scrapped by the bourgeois court system, DIE LINKE must be able to put the state and the capitalist class under so much pressure that they must step back from this attack. To do so, they must mobilise the working class.

The struggle must be organised in all of Germany

In their press release, DIE LINKE holds the German government accountable. The Federal Constitutional Court ruled that only the federal government could make rental policy decisions, the CDU/CSU and SPD would have to “finally act”. However, it is clear that we can expect nothing from the CDU/CSU. This raises the question of how a rent cap can be conquered not just in Berlin, but on the federal level.

This can only be achieved by a national campaign in all German cities. Everywhere working people, students, and pensioners face the same problems. They can only barely afford their rent as it is, and housing space is scarce. Many of them still have to work short-time, have to accept cuts in their wages, have lost their job, or fear they will be next in time to lose them.

Therefore, a huge campaign for affordable housing and a true rent freeze with a noticeable decrease in rent could become the starting point for the struggle for a socialist society. To achieve that, DIE LINKE must mobilise for such a campaign in the neighbourhoods, workplaces, and DGB unions. Appeals to the parties who actively opposed the cap – as the CDU/CSU and the Liberals – or dragged their feet and undermined the implementation of the rent cap – as the SPD and Die Grünen did in Berlin – will have no effect.

The only ones who can exert the necessary pressure and force real estate companies and bourgeois governments to meet these demands are the working people. We must now draw on the strength of the working class and organise them in this so-called super-election year for a struggle against the attacks of capital and for the struggle for a socialist society.

We need:

  • Mass demonstrations in Berlin as well as nationwide!
  • A rent strike in Berlin!
  • An offensive campaign for a nationwide rent cap!
  • A federal election campaign of DIE LINKE for the socialisation of land and the real estate industry!

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