The Berlin Borough Buying Out Private Landlords

To stop landlords from hiking up rents, one Berlin borough is taking drastic action: blocking the sale of a building and buying it up for the government. Earlier this week, the inner-city borough of Friedrichshain-Kreuzberg announced that it wouldn’t allow a privately-owned tenement to be sold to an international investor. Instead, officials are directing the sale toward a state-owned independent housing association committed to affordable rents.

The move came after tenants campaigned to block the sale, fearful that the prospective buyer, a shell corporation registered in Luxembourg, would raise rents beyond a level they could afford. The borough’s move—blocking a building’s sale simply because it fears potentially extreme rent rises—would be illegal in some places. In Berlin, it’s possible because of national “neighborhood protection” laws that give boroughs a right of pre-emption if the sale of a building in an area of high housing stress risks displacing its tenants. The move is not just possible, in fact, but increasingly common.