Dear Reader,
In Germany, rental costs are rising sharply and so are energy bills.
The cause of both problems is supply shortages. On rents, city administrators can’t build fast enough to keep up with the number of people moving to big cities. For energy, geopolitical turmoil is restricting access to natural gas, which is key for winter heating and electricity production.
The solution to both problems is obvious enough, even if it is hard to implement. Build more houses and you will calm the rental market; source more gas and you will bring energy prices down.
Instead, solutions are being discussed that, at best, would do nothing to ease the problem, at worst, would just push bills higher.
Next month, Berlin is to hold its third state election in five years. Headlining the election is the question of whether the city should seize properties from the private sector as an alleged cure for spiralling rental costs.
A proposal to do just that won a majority at a citywide referendum in 2021. Now, the hard-left Die Linke party says it wants to enact the result of that plebiscite. A month ahead of the vote, Die Linke have a narrow lead in polling.
Under the plan, the city would expropriate around a quarter of a million rental properties from large property owners and put them into the public hand.
Obviously, in a Rechtsstaat, you can’t just seize property from a private owner.