Populism’s New Rallying Cry Is ‘Expropriation’

After the German far right’s victory in regional elections earlier this month, the Sept. 20 vote in Berlin offered a startling rebuttal—but also a new set of political questions for Germany’s political system. The far-right Alternative for Germany (AfD) party scored a record high in the city, but the clear winner was the Left party and specifically Elif Eralp, its candidate for mayor. Having won an unprecedented 26 percent of votes, Eralp is now in position to lead coalition talks with Social Democrats and Greens to cobble together a left-of-center “red-red-green” government. But the moment that Berlin’s election results lit up screens citywide, German media swooped down on Eralp, demanding to know whether the 45-year-old lawyer of Turkish descent would stick to her headline promise: socializing corporately owned apartment buildings. “I’ve always said: If the Left enters government, socialization will happen too,” Eralp answered, turning serious for a moment amid her party’s jubilation. Expropriating corporate landlords, she continued, is “legally possible, financeable, and one of the best tools for keeping housing affordable.” According to the Guardian, Eralp received campaign guidance in Berlin from one of Mamdani’s advisors; more broadly, the Left modeled their campaign after those of U.S. Sen. Bernie Sanders. But the Left party’s populist promises to expropriate housing from private owners goes farther than any promises Mamdani made in New York. The Left has made the policy a nonnegotiable condition for any coalition. But while expropriation may be the key to the Left’s electoral success, by signaling its discontent with the economic status quo, it’s not clear how the party plans on implementing it—and whether it risks courting backlash as a result. In a growing city acutely short of housing, the Left’s stated mission is to “socialize” housing. Unlike predecessors, who addressed the shortage with modest rent-controlled construction and tweaks to tenancy law, this means buying up existing stock and transferring it to common ownership. The Left has said that it’s responding to popular will: In a 2021 citywide referendum, 59 percent of voters called on Berlin to draft legislation expropriating the housing stock of large real-estate companies. The measure’s legal basis is the German Constitution’s never-before-used Article 15, which permits the “socialization” of land, natural resources, and means of production against compensation. “It could be one of the biggest economic experiments ever in Germany,” a co-editor in chief of the leftist newspaper taz, Ulrike Winkelmann, told Foreign Policy. “This is about nuts-and-bolts urban policy, and it packs enormous explosive potential,” she added, referring to stressed housing markets in major cities across Germany. The Left’s housing campaign stands for something larger, too: a rejection of the commodification of basic needs—and of cutthroat capitalism more broadly. Socialization in Berlin could offer a blueprint for turning public services into democratically managed common goods, and it carries the message that regulatory tweaking no longer suffices to fix a broken system. German progressives see it as a means to instigate systemic change—and a way to address the despair that drives some frustrated voters toward the far right. Matthias Bernt, a sociologist at the Leibniz Institute for Research on Society and Space, said that like the surge of democratic socialist ideas in the United States, the arrival of the Left’s socialization policies reflects an ever-larger networked left in German cities that operates beyond party politics. He points to tenants’ rights campaigns, self-managed housing networks, and climate groups advocating socialized energy production—civic organizations that overlap with the Left’s call for “no more business as usual” and a shift away from treating social goods as financial assets. The housing units in Eralp’s sights belong to several large, profit-oriented real-estate companies that are considered partly responsible for driving up Berlin rents. In exchange for just compensation, these apartment complexes would become publicly owned, initially under the state of Berlin. The Left doesn’t foresee long-term government control but rather the emergence of collectivist models: public-benefit housing corporations, cooperatives, or municipal companies with public-interest mandates. The Left says that its focus is narrow: for-profit landlords owning more than 3,000 apartments in Berlin—that’s about 220,000 apartments, or roughly a sixth of the city’s rental stock. Squarely in the reformers’ sights is Vonovia, Germany’s largest residential real-estate company and one of Europe’s biggest housing landlords. Among the city’s eight largest corporate landlords, it owns more than half of the stock in question. Socialization, according to housing activists, wouldn’t just lower rents in the newly public housing—it would also pull down rents citywide, through a mechanical link in German rent law. A large enough block of newly cheaper units could pull down a district’s official rent index, a statistical average of local rents that caps how much landlords can raise rents. A lower index would constrain what private landlords in that district could legally charge; rents across the entire city would drop, proponents say. Objections hail from many corners, not least from one of the parties that the Left needs in a ruling coalition: the Social Democrats, which scored a meager 12 percent in the election. They argue, along with German conservatives and landlord associations, that socialization doesn’t create a single new apartment. Fina fhncing the Left’s ambitions could also exceed the enormous figure of 30 billion euros ($34 billion), they warn, which amounts to two-thirds of the 2026 city budget. (Berlin also faces a spending gap of about 5 billion euros ($5.7 billion) that the next government will have to remedy.) The Left promises that taxpayers won’t foot the bill. The city will sell bonds to finance it—in other words go into debt. The rental income would then go toward paying back the borrowed money. But it would be the taxpayers who back up the debt, should worse come to worst. Critics point out that the city would also have to hire a staff responsible for running them: collecting rent, handling repairs, and carrying out the maintenance and modernization that Vonovia and its peers now do with their own staff and contractors. This, they say, is much too much for a city administration that in the past has failed to accomplish much simpler tasks. At the very least, use of the obscure Article 15 will face legal challenges from the expropriated landlords. Chancellor Friedrich Merz has said he wants to ban socialization outright on the national level but hasn’t said exactly how. Other critics suggest the policy will undermine the country’s reputation for liberalism, violating fundamental property rights in a way that could spook Germany’s partners abroad. But, for proponents of the policy, the challenge the policy poses to the country’s basic political commitments is part of the appeal. The Left admits that new housing is required too, as many as 20,000 apartments a year, a pace (and price) that no Berlin government has managed in decades. Left-aligned experts put the cost at 8 billion euros ($9.1 billion) to 17 billion euros ($19.3 billion). Aware that “expropriation” carries the ugly echo of Soviet asset seizures and postwar land reforms in Eastern Germany, the Left prefers the word “socialization” over “expropriation,” and stresses that an independent agency would determine the housing blocks’ value—compensation that the state would pay in full. Experts have said that the leftist program could work. In a new report, the Macroeconomic Policy Institute, a center-left think tank, concluded: “Socialization permanently increases the stock of rent-controlled housing and thus makes an important contribution to making life in Berlin affordable for low- and middle-income earners.” It could quickly open housing policy to new progressive options, according to the authors, “for example, in terms of rents, renovations, neighborhood development, and social diversity.” The economists estimated that compensation payments to real estate companies would total 13.5 billion euros ($15.3 billion), arguing: “The transfer of housing stock to public ownership is economically and fiscally viable.” German leftists beyond the Left hope that Berlin’s experiment spreads to other cities and other sectors. Even some national-level Social Democrats back renationalizing electricity and gas supply, while other groups point to transportation and healthcare. The whole project could still falter, though, on resistance from mainstream Social Democrats (SPD) such as Berlin party leader Steffen Krach. It’s a dark irony that the constitution’s expropriation article was inserted at the insistence of the early postwar SPD, to keep the door open for socialization down the road. In the decades that followed, the party veered away from old-school socialism. Now, the Left and like-minded social movements have resurrected that forgotten article to pursue the kind of socialism that the postwar SPD once dreamed of—and that many disaffected German citizens evidently still do.