A historic vote in Berlin to seize homes from private mega landlords has Kiwi renters wondering if the same could be done here in New Zealand.
While there is scepticism from both the left and right, a new community grassroots effort hopes to change that.
In September, 56 percent of Berliners voted in favour of the local state government forcibly acquiring any rental property owned by a company with more than 3000 of them on its books - totalling about 243,000 belonging to 12 companies all-up.
While the referendum was non-binding, new Mayor Franziska Giffey said she would honour the results and draw up legislation to get the ball rolling - even though in her view, it won't "help to create even a single new apartment or solve the big question of affordable housing".
While home ownership rates have been falling in New Zealand for three decades, we have nowhere near the proportion of households renting as Berlin, where it's over 80 percent. Faced with growing discontent over rising rents, in January 2020 the city enacted strict rent controls on properties built before 2014.
But this was overturned by the courts in April 2021, and tenants were suddenly faced not just with massive hikes but also potentially having to reimburse landlords who had to drop rents to comply with the "unconstitutional" legislation.
By then, activists in the city had already begun collecting signatures for a referendum on the expropriation of properties owned by mega-landlords - any with more than 3000 on their books.
The campaign was named after Deutsche Wohnen, a corporate landlord with more than 110,000 apartments. Also in the activists' sights was Vonovia, which is in the process of buying Deutsche Wohnen - which would give it 550,000 properties across Germany and more than 150,000 in Berlin, leaving about 7 percent of households in the city renting from a single landlord.
The cost of expropriating all the homes covered in the referendum has been estimated at between €7 billion and €36 billion (NZ$11.7 billion to NZ$60 billion).
Before the rent control law, Berlin's rents had doubled in a decade. New Zealand's median has gone up 60 percent since 2011, rising at a fairly consistent rate regardless of what else has been happening in the property market. Auckland prices are comparable to Berlin's, if not a little more expensive.
'Attractive global city'
Renters United, a Kiwi group pushing for reform of the housing sector, said Berlin tenants are facing similar problems to New Zealanders shut out of home ownership by skyrocketing prices.
"Extremely high prices are pushing people into poverty and forcing people out of their homes," spokesperson Ashok Jacob told Newshub.
"I have been following the political struggle for rent relief in Berlin for some time now, and it's good to see this happen even after their rent control plan was defeated earlier this year."
He doesn't expect the New Zealand Government to even consider similar drastic measures, let alone carry them out.
"There are no parties in Parliament who have proved themselves willing to advocate this kind of decisive action in favour of Kiwi renters."
Oliver Hartwich, executive director of pro-free-market think tank the New Zealand Initiative, told Newshub the successful vote wasn't surprising, Berliners having experienced "substantial" increases in rent.
"Since reunification in 1990, Berlin has become an attractive global city. Inner-city areas have seen an influx of (mainly young) people from other parts of Germany, Europe and the world. Rents have gone up accordingly."
'It's possible for people to fight back' - or is it?
A new group of community housing campaigners, academics and union officials has formed to try something similar here.
"What the Berlin referendum on corporate landlords has demonstrated is it's possible for people to fight back against housing being a commodity, and for a model of public and collective ownership," said Public Housing Futures spokesperson Vanessa Cole, a housing researcher also of Auckland Action Against Poverty.
"With growing concern about a profit-centred overheated housing market in Aotearoa New Zealand, more and more people are demanding a mass public housing build programme as a key step forward, alongside greater funding of housing solutions by Māori and for Māori.
"Public housing could be a solution for the many and not just the few, providing secure, truly affordable, accessible, beautiful and healthy homes for our communities and the planet.”
Dr Hartwich said however the cost to the Berlin state government of nationalising 243,000 residences would be "ridiculously expensive" and "stretch the state of Berlin's budget for years to come".
"The referendum was non-binding - both voters and politicians know that, so voting for the initiative was in part a protest vote," he said. "I don't expect the initiative to succeed either politically or legally."
Nor could it work here, he says, due to our "much more fragmented" housing. An analysis of the New Zealand market earlier this year found landlords with four or more rentals owned less than 6 percent of the market, based on bond lodgement data. Much more of our rental stock is owned by so-called 'mum and dad investors' - nationalising a percentage of the New Zealand market equivalent to the Berlin plan would likely require taking homes off possibly hundreds, if not several thousand, of individual landlords - a potential logistic, not to mention political, nightmare.
"For that reason alone, a Berlin-style solution (not that it is a real solution) would not work here," said Dr Hartwich.
'Really interesting idea'
It's one of the few things he and Green Party co-leader Marama Davidson agree on.
"It's a really interesting idea," she told Newshub, speaking from her rented home in Manurewa.
"This is pointing clearly to the rental crisis in particular as part of the broader housing crisis, and the unaffordability issue is massive. I think the idea is really interesting. I also noted... they were targeting a particular real estate agent, and I wonder if we've got any similar context here. We may not have."
She said exchanging a private landlord for a public one probably wouldn't fix the underlying causes of the international housing affordability crisis anyway.
"We have to really get to the roots of the housing crisis and the unaffordability, that is wealth or land or capital and/or taxes to immediately curb the speculation... Investment and speculation, both of them are ruining things, but the return on investments is what is forcing people to be kicked out of their homes so they can increase the rent; the speculation stuff without the capital gains tax etc, is causing the on-sell and on-sell. We haven't curbed any of that stuff.
"What that means is we are still operating as if houses are primarily a tradable commodity. What we need to get back to is homes for people to live in and housing as a public good. The Berlin situation for me, I think it's trying to address some of the issues but I'm not convinced that it will really make life better for people who rent in the long-run. That needs those other levers as well as rent control."
She said New Zealand is one of only a handful of OECD countries without some kind of rent control. While landlords here are prevented from hiking the rent more than once a year, there is no limit to how much they can go up (though tenants can challenge excessive hikes through the Tenancy Tribunal).
Davidson said she's increasingly hearing from ex-tenants whose former landlords have found a loophole in the system - find a reason to evict them and relist the property for a higher price.
"They'll just kick people out and shove it up again. It's ridiculous, and it's making life unbearable and unacceptable - in my opinion - for people who rent."
"What the referendum vote clearly was about was sending a clear message - they want housing for people, not for investors and speculators," said Davidson. "That's absolutely the right message... I'm just not convinced that it's the magic bullet that we need here in Aotearoa."
Lessons on rent control from Berlin
Like most economists, Dr Hartwich is opposed to rent controls. Rents in Berlin reportedly dropped for those living in eligible homes about 8 percent, prompting tenants that would otherwise have moved to stay put. This forced a massive increase in demand for newer, more expensive apartments that weren't covered by the cap, driving overall prices for those up faster than elsewhere in Germany.
The fear new apartments also might one day be rent-controlled has also reportedly discouraged new construction in the city, adding to its woes.
While construction in New Zealand is at a near five-decade high, Davidson said per capita it's still well behind where it needs to be. She said in the meantime there is a place for rent controls as part of a wider effort to make housing more affordable.
"We make it really, really clear in all of our discussion documents not one rent control option on its own will do all of the things. It's about context. We address that in our research and our policy... there are overseas examples also - we might be one of the last OECD countries not to have introduced some form of rent control. Overseas there are examples of rent control making a difference."
Jacob of Renters United said Kiwi renters are probably in a "worse-off" position than their Berlin equivalents right now.
"The crises are similar in that extremely high prices are pushing people into poverty and forcing people out of their homes. However the causes are slightly different- in Berlin a handful of large companies control the private rental market, but in New Zealand ours consists of many more small-scale landlords.
"The effect is the same though, and in some ways it's worse for us here because our rental sector is seriously unregulated to begin with. We're starting off from a worse position, from a systemic point of view."
Willpower lacking?
And he's pessimistic the present Government will do anything substantial about it. The effects of a brief rent freeze as the pandemic hit last year were quickly wiped out, with rent hikes making up for lost ground as soon as it was lifted. And efforts to make rental housing a better long-term option - such as making it harder for landlords to evict them, and allowing minor alterations to be carried out - have been met with stiff resistance from landlord groups.
"From what we've seen so far, they lack either the creativity, willpower or urgency to actually respond to the crisis with measures substantive enough to actually make much of a difference."
Finance Minister Grant Robertson earlier this year said rent controls weren't "on our agenda at the moment, but we will keep an eye on what happens".
Newshub contacted Housing Minister Megan Woods for this story, but did not receive a response.
