Berlin's left wants to spend €16 billion buying 160,000 flats that already exist. Not one new home comes with them.

There is a sentence in the coalition paper agreed by Berlin's Left, Greens and Social Democrats on 17 October that sums up a whole political tradition. "The three parties agree," it says, "that the application of Article 15 of the Basic Law is a contribution to expanding the municipal housing stock and to overcoming the crisis in the housing market."

Article 15 is the clause in Germany's constitution that allows land and the means of production to be transferred into common ownership, with compensation. It has never been used. Berlin's next government, if the Left's party congress approves talks on 31 October, intends to be the first.

The plan, set out in the exploratory paper "More together, more Berlin", is to take over the flats of private housing companies that own more than 10,000 homes in the city. Each may keep 10,000. Co-operatives and "public-interest" landlords are exempt, and so is anything built after 1 January 2021. Compensation is capped at €16 billion. The Left's lead candidate and likely next mayor, Elif Eralp, put the result in one line: "Berlin will thereby remove around 160,000 flats from the logic of the market," tagesschau reported.

Read the plan slowly and something odd happens. The more detail you get, the less it does.

€100,000 a flat, for the same flat

Start with the arithmetic, which the paper itself makes easy. Sixteen billion euros for roughly 160,000 flats is about €100,000 per flat. That money does not buy a single new home. Every one of those flats already exists, already has tenants and already has a roof. The day after the transfer, Berlin will have exactly as many homes as the day before. It will just have a €16 billion bill and a new public landlord.

And the tenants? Here the paper is admirably honest. The average starting rent for the transferred flats "will not be higher than the average rent" charged by the previous owner at the moment of transfer. Not lower. Not higher. After that, rents follow the rules for the city's own housing companies, whose increases the coalition wants to cap at 2% a year.

So a city spends €16 billion so that 160,000 households can pay roughly the same rent to a different landlord. That is not a housing policy. It is a change of letterhead.

Not before 2029

Then there is the timetable. A financing concept is to be fixed in 2027. The law goes to the Berlin parliament in mid-2028. And the transfer of the flats takes effect "only one year after promulgation". On the coalition's own schedule, nobody's flat changes hands before 2029, and the lawsuits the companies affected are all but certain to file, quite possibly all the way to Karlsruhe, have not even started.

Berlin voters said yes to this idea in a referendum in September 2021. Five years later, the people who promised to carry it out have produced a plan to do so roughly eight years after the vote, if the courts allow it.

A city in the red, shopping for flats

The most revealing part of the paper is not the housing chapter. It is the one on money. The coalition admits that Berlin's budget is "in an imbalance that we must fix". It wants €900 million of relief in 2027 and €500 million in structural savings from 2028. It plans at least €400 million a year in extra revenue, "in particular through tax and fee increases". It mentions possible proceedings by Germany's Stability Council, the body that watches over the finances of indebted states. It wants the federal debt brake abolished in its current form and a wealth tax brought back.

In the middle of all that, the same document caps the compensation at €16 billion "on condition that fiscal sustainability is ensured", and adds that this must still hold if borrowing costs get worse. The coalition partners have written a sentence that sounds like a safeguard and functions as an escape hatch. If the money is not there, the plan can quietly die in a footnote, and everyone can blame the bond market.

The bit the EU helps with

There is a smaller, almost comic detail. The same chapter that promises "the biggest new-build programme for affordable housing since reunification", 100,000 homes between 2026 and 2031, also commits Berlin to net-zero land sealing by 2030, so no net new concrete on open ground. The coalition notes that the EU's Nature Restoration Regulation "supports us in this goal".

You can build 100,000 homes and stop sealing new land, if you are very good at building on top of things. Berlin, a city that took fourteen years to open an airport, would be an unlikely pioneer. Brussels, meanwhile, gets a cameo as the friendly supporter of a rule that makes building harder in the middle of a housing shortage. It is a small reminder that the EU's green rulebook rarely costs Brussels anything; it costs the people waiting for a flat.

The SPD against the SPD

Friedrich Merz warned the Berlin parties that "the protection of property and trust in a functioning market" are deeply anchored in Germany's economic order: "That is the foundation of our market economy, and you don't experiment with it," he said, according to dpa and AFP. His economy minister, Katherina Reiche, said expropriations were out of the question. More awkward for the Berlin coalition, the federal housing minister, the Social Democrat Verena Hubertz, wants to bring forward a law the federal coalition has agreed against the socialisation of housing.

So the SPD in Berlin, after its worst result ever, 12.1%, is signing up to a plan that the SPD in the federal government is preparing to block. That is not a coalition. That is a party arguing with itself in two different buildings.

Who pays

None of this means Berlin's housing crisis is invented. There are not enough flats, and the paper itself says the city has more than 60,000 homeless people. The voters who made the Left the largest party with 25.7% were not imagining things.

But the answer to a shortage is supply, and supply means building, quickly, cheaply and in large numbers, on land you are allowed to build on. Every euro spent buying an existing flat is a euro not spent on a new one. Sixteen billion euros, borrowed by a city that admits it is in fiscal trouble, would pay for a lot of cranes. Instead, if this plan survives, it will pay for a lawsuit, a new bureaucracy and the satisfaction of having taken something from a company. Tenants will still be queuing. They will just be queuing for a public landlord.