Berlin is tackling the housing crisis, buying 6,000 apartments from a private company

Berlin – Berlin will buy back 6,000 former social housing units from the private Luxembourg company ADO Properties SA for 920 million euros (23.8 billion CZK), which the city sold 15 years ago. This is a response to public pressure, which is rising against skyrocketing rental prices. According to Berlin Senator Katrin Lompscher of the Left Party (Die Linke), this is the largest such buyback in the history of Germany's capital. The opposition criticizes the move.

"The aim is to maintain stable rents in Berlin and give tenants assurance," said Berlin Mayor Michael Müller (SPD) in a statement. "At the same time, we will continue to build new apartments and legally secure the freezing of rents," he added. The municipal company Gewobag will take over thousands of apartments located in the Spandau and Reinickendorf districts in the western part of the city this December.

According to analyst Thomas Rothäusler of Jefferies, the city purchased the units too expensively. Rothäusler told Bloomberg that, in his estimate, the apartments were overpaid by about ten percent above their book value.

According to the German opposition party Free Democrats (FDP), the Berlin authorities are contributing to real estate speculation with their actions. FDP stated this on Twitter today. The protest party Alternative for Germany (AfD) labeled the move a "waste of money."

Already in mid-July, Gewobag reacquired 670 apartments on Karl-Marx-Allee in Berlin, as recalled by the weekly Der Spiegel on its website. The price was not disclosed by the council at that time. The dispute over the apartments on the former exhibition avenue from the GDR era was accompanied by protests and made the front pages of German newspapers. It became a symbol of the pressing situation for tenants in large German cities, the paper reported.

The German capital was once renowned for its low living costs and low rents. However, in recent years, it has gained attractiveness. According to AFP, rental prices have doubled over the past decade, making it difficult for some residents to find affordable housing.