Housing groups: more power, more inequalities. One comment – economy

The boss of Germany’s biggest landlord recently uttered a crazy phrase. It was the merger of the Vonovia group with the competitor Deutsche Wohnen. Vonovia boss Rolf Buch said it was “in the best interests of the whole German population” for him to succeed. This statement cannot be left as is, not in this absolute.

The book alludes to the fact that many Deutsche Wohnen stocks are owned by “short-term hedge funds and speculators”. It was the loss of Vonovia’s boss in the last takeover attempt. Too many investors were betting they could get even more money at a later date. Vonovia wants to try again soon – and offer more money.

Just: Would a landlord merged with 560,000 apartments really be in the interest of the population?

Buch is right about one thing: Investors with a short-term perspective can hurt housing markets. Some cities experienced this after privatizing real estate at the turn of the millennium. These investors tend to try to take a lot of money out of homes and pay little for maintenance and renovations.

But many regions need exactly the opposite: additional living space, ideally on already sealed areas, for example by remodeling vacant homes or extending roofs. And investments in better climate protection, for example in solar cells and new heating systems. A company like Vonovia can contribute to both of these goals.

But if you are arguing with the general population, then the question must be allowed: is it in the general interest that more and more real estate capital is aggregated in the hands of a listed company? Vonovia houses have gained 4.2 billion euros in value in the first half of this year alone, without any takeovers from Deutsche Wohnen. Vonovia charges rents on average 3.7% higher than a year ago, precisely because the group is modernizing and building diligently.

Expropriate the large private owners? There is a justified frustration behind the assertion

A lot of people view this with annoyance. In Berlin, an initiative has collected enough signatures for the population to soon be able to vote on the socialization of large private landowners. You really don’t have to go that far, the billions in compensation would be extremely expensive. But the policy should take seriously the concerns expressed in the expropriation request.

Because it is fatal for the distribution of wealth and for equality of opportunity that millions of households devote ever greater portions of their income to rent – and at the same time fear never profiting from the real estate boom as owners. Interest rates are historically low, but purchase prices have also risen sharply. Since banks usually require a share of the capital, many people can no longer buy their own homes without parental support or an inheritance. This breaks the promise of advancing a social market economy.

The incumbent federal government tried to solve the dilemma with the Baukindergeld: a grant for middle-class families with children who buy property for the first time. But flat-rate subsidies always carry the risk that they may still fuel high prices anyway. More targeted aid would be preferable: for example, for first-time buyers who are giving new life to previously vacant properties. Overall, an urgent challenge in the housing market remains to connect the surrounding area to booming cities in a better and more environmentally friendly way.

Or wouldn’t it be practical if more tenants bought shares in companies like Vonovia? Regardless of whether they could afford it and shouldn’t expand their investment more widely, this thinking interestingly leads to the old idea of ​​housing co-ops.

Ideally, these organizations also generate profits that they can reinvest. But they don’t pay hundreds of millions of dividends to international investors. On the contrary, they belong proportionately to the people who live in their homes. It is therefore understandable that people in booming cities are again calling for more municipal and cooperative housing. It would really be: in the interest of the people.

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