The German Property Federation (ZIA) has welcomed the announcement by Federal Interior Minister Alexander Dobrindt regarding a planned Investment Protection Act. The legislative initiative envisages tying socialisation under Article 15 of the Basic Law to noticeably stricter legal requirements. According to the industry association, this proposal bolsters legal certainty for private investors and sends an essential signal for new housing construction.
ZIA President Iris Schöberl described the plans as an encouraging development for people seeking housing. She stated that reliable legal frameworks and predictable risks regarding ownership are vital for sustained commitment to housing stock and new build projects. Effective protection of private investments ultimately benefits both housing seekers and Germany as a business location.
Strict criteria for interventions under Article 15 of the Basic Law
The formulated key points of the proposal explicitly define the socialisation of rental housing as a last resort. Going forward, such a measure will require sound and comprehensible evidence of its compelling necessity. In addition, the draft requires proof that all alternative instruments to create housing and stabilise the market have been exhausted. This primarily concerns investments in new construction as well as existing subsidy programmes.
These hurdles are accompanied by clear specifications on financial redress. Should socialisation nonetheless occur, compensation under the guidelines of the act must be based strictly on actual market value.
- —Classification of socialisation solely as an ultima ratio upon proven necessity
- —Prior exhaustion of all alternative subsidy and new construction measures to stabilise the market
- —Determination of compensation strictly based on market value via an independent valuation
- —Full and immediate disbursement of the compensation amount in cash
Call for swift legislative implementation
Iris Schöberl urged that the announced cornerstones now be translated into legally sound federal legislation without delay. In the association's view, expanding new residential construction remains the most effective measure to combat the prevailing housing shortage effectively and keep rents stable over the long term.
Instead of ongoing debates over expropriation, the peak body calls on politicians to deliver tangible improvements to framework conditions. Above all, accelerating planning and approval procedures alongside targeted support for residential construction are necessary to keep the required capital reliably within the market.
