DIP partner Aengevelt has presented an analysis of a political position paper by the Hans-Böckler-Stiftung. Media reports had suggested that the socialisation of private housing companies could increase the supply of affordable housing. After reviewing the documents, Aengevelt concludes that this reporting is based on a flawed interpretation of the paper. The position paper contains no justification for why socialisation should slow the rise in rents, and therefore cannot be used as an argument for it.
Last week, numerous media outlets, including Tagesspiegel, B.Z., Süddeutsche Zeitung, Spiegel Online and Focus Online, reported on a publication by the Hans-Böckler-Stiftung, described as a 'study'. This publication dealt with various options for the socialisation of private housing stock in Berlin. Many of these reports interpreted the paper as proof of a possible dampening effect of socialisation on rental increases. Aengevelt, however, points out that the document is not a study, but a 'Policy Brief' – a political position paper – from the trade union-affiliated foundation. The title of the paper is: 'The transfer of large housing stocks into common ownership - options and pitfalls'.
Analysis of the argumentation in the position paper
The position paper states that affordable housing for low and middle-income households can only be guaranteed if there is a sufficient supply of non-profit or public housing. The conclusions on page 20, however, are formulated more cautiously: 'Such a stock can thus slow down rental price dynamics (...)'. Here, a 'can' formulation is used, presenting the effect merely as a possibility. Furthermore, the authors themselves come to the realisation that the socialisation of large housing stocks of private housing companies is not a solution to the housing shortage in strained major cities. This finding can be found on page 19 of the document.
The thesis that socialisation could slow down rental price dynamics is not substantially substantiated in the present paper by the Hans-Böckler-Stiftung. The 20-page document primarily focuses on the corporate legal organisation of transferring private housing stock into common ownership, with integration into the six existing state-owned housing companies being favoured. The assumption that public housing stock dampens rental price dynamics functions as both a conclusion and a premise, without empirical data, comparative price analyses, or model calculations being used to support it. A literature analysis on this thesis was also not conducted. The only literature reference consists of an earlier publication by the same authors, which, however, exclusively presented fundamental regulatory policy positions postulating the superiority of public housing.
The only reason given as to why public housing construction should cushion the rise in rents is that it creates 'more affordable homes for the same amount of building land', as the focus is on housing below the luxury segment. Aengevelt, in contrast, refers to the situation of affordable old-build flats, which are often privately owned and where landlords, for various reasons, do not implement rent increases or do so only with delay. Furthermore, the rents for social housing, built by private investors with public funding, are set identically to those of municipal or state-owned companies by the funding body. Both public and private housing companies face the same construction costs and manage their portfolios according to the same business principles. Educational institutions in the housing sector do not differentiate between ownership forms when teaching management methods. Since the 'Policy Brief' of the Hans-Böckler-Stiftung provides no justification for a rent-dampening effect of socialisation, it cannot, according to Aengevelt, be used as proof for the media's portrayal.
Aengevelt's conclusion
Dr. Wulff Aengevelt, managing partner of DIP-Partner Aengevelt Immobilien, commented on the debate. He stated that the extensive media reporting on alleged price-dampening effects of socialisation on rental levels was based on an abbreviated and flawed perception of a political paper. He elaborated that its authors pursued an ideological preference for a state economy, yet in their publication presented neither a scientific analysis nor a justification for how socialisation should increase the supply of affordable housing. On the contrary, the authors of the paper themselves admitted that socialisation could not alleviate the critical undersupply in the affordable housing segment that has been observed for years. Political actors could therefore not refer to this paper.
