The Berlin Senate and its state-owned housing companies have become a horror for real estate dealers since they bought “what is not nailed down” with the right of first refusal. This is also felt by internationally active investors such as the Scandinavian Heimstaden, as can be seen from a request from the FDP parliamentary group leader Sebastian Czaja to the Senate.
This also shows: If the country snatches houses from under the noses of investors in social conservation areas by means of a right of first refusal, it will cost the budget tens of millions.
The Senate spent 28.5 million euros on the purchase policy to combat the rise in rents in the past three years (2017 to 2019). The state treasuries transferred this amount to state-owned companies so that they can buy residential buildings and private individuals do not have access. This happened in 42 cases, so 42 residential buildings went into municipal ownership.
According to the Senate, the purchase price for the property was around 220 million euros. The state companies paid this money plus notary and other ancillary costs from their own coffers and by getting into debt.
The millions of the country are added and correspond to a grant of almost 13 percent of the purchase price. Without this money, the business would not have been worthwhile and would be forbidden. Country companies are set up under private law and are therefore not allowed to enter into unprofitable deals because that endangers the company.
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This is becoming increasingly difficult because of the high real estate prices in Berlin. Especially since the state companies themselves have to rent cheaply. In addition, there are social obligations that cost them income. In the cooperation agreement with the State of Berlin, the companies declared that they would not accept rents that amount to more than 30 percent of the net household income of their tenants.
There were also failures in the tug of war with Heimstaden
So it happened that the state-owned Degewo did not take over a residential building with the right of first refusal, although the Senate and the district would have liked to see it. There were also failures in the tug of war with Heimstaden. According to the Senate, “the right of first refusal was examined on three properties in Friedrichshain-Kreuzberg. It was not exercised as no pre-emptive beneficiary was available ”. In Pankow, too, “no third party was available”, ie a state company to buy a house.
However, this is not always necessary, as the bulk purchase in Heimstaden shows. The Heimstaden Senate snatched “only” three of the nine houses in a “first tranche”.
However, the threat of further pre-purchases could have strengthened the country’s negotiating position for the larger “second tranche” with 82 houses. There, the ten affected districts at least enforced an avoidance agreement with Heimstaden for tenant protection: waiver of the division into apartment and partial ownership, waiver of dismantling, waiver of energetic construction work (except where there is a legal obligation).
