Pre-emption rights in Berlin: Senate accused of constitutional violation (2017)

Legal opinion accuses Senate of constitutional breach

The Association for the Promotion of Homeownership in Berlin (Verein zur Foerderung von Wohneigentum in Berlin e.V.) has presented a legal opinion by Prof. Dr. jur. Steffen Hindelang. The conclusion: the Senate's one-sided policy disregards the guiding principles of Berlin's state constitution. Article 28 obliges the state of Berlin not only to create rental housing but also to "promote the formation of residential property ownership."

The constitutional conflict

According to the opinion, the constitution requires a balanced support concept that considers both the rental and the ownership market. Prof. Hindelang argues that focusing exclusively on rent-policy instruments while neglecting ownership promotion contradicts this constitutional mandate. Every housing policy priority must be justified by special reasons. The association sees no such justification in current policy.

Concrete obstacles for owners and investors

Jacopo Mingazzini, the association's chairman, criticizes two instruments in particular: the condominium conversion ban and the expansion of conservation areas. This combination leads to "an ever greater scarcity of supply in the more affordable existing stock segment." Especially in boroughs like Neukoelln, Friedrichshain-Kreuzberg, or Pankow, it is becoming nearly impossible for owners to convert existing apartment buildings into condominiums. This makes selling apartments in Berlin more difficult and, according to Mingazzini, hits lower income households hardest, for whom buying a resale apartment is often the only path to ownership. The repeated increases of the property transfer tax to six percent compound the problem.

Ruling on pre-emption rights

Mingazzini points to an April 2017 ruling by the Berlin Regional Court that declared the boroughs' pre-emption rights practice in conservation areas unlawful. Until now, boroughs have frequently used their pre-emption rights to block private sales and channel properties to municipal housing companies or cooperatives. The court has set limits on this approach. Mingazzini criticizes that this ruling, relevant for the overall market development, was not made public for over six months, accusing the Senate and boroughs of concealment.

The full text of the press release is available from the Association for the Promotion of Homeownership in Berlin.