Berlin's coalition government has failed in its radical promises

While accusing landlords of speculation, Berlin's politicians played their own game of speculation, and everyone lost.

Klaus Lederer (left, Die Linke), culture minister, Ramona Pop (centre, Die Grünen), economy minister, and Michael Müller (SPD), our mayor. If he had covered his ears this picture would be perfect.
Klaus Lederer (left, Die Linke), culture minister, Ramona Pop (centre, Die Grünen), economy minister, and Michael Müller (SPD), our mayor. If he had covered his ears this picture would be perfect.Photo: dpa/Bernd von Jutrczenka

Berlin-The Mietendeckel rent cap was the Berlin government's biggest promise. The coalition of the leftwing Die Linke, the centre-left SPD and environmental Die Grüne wanted to halt the excessive financial strain on tenants by aggressively intervening in the market.

State governments usually like to hide behind the federal government and blame their bigger siblings for any shortcomings. The Berlin government, formally known as the Senat, on the other hand, decided to make itself bigger than it is - and failed. On Thursday, the second chamber of the Constitutional Court ruled on a complaint filed by members of the conservative CDU and business-friendly FDP and declared the rent cap null and void.

According to the court, the state of Berlin is not responsible for rent legislation and shouldn't have passed the law. Tens of thousands of households are now facing high bills for back rent. And it's unlikely that all of them heeded the advice to put aside the savings from the rent cap until the law was challenged - many presumably couldn't because of the pandemic-related economic crisis.

Die Linke, the SPD and Die Grüne accuse landlords of speculating with housing - at the expense of economically weak inner-city residents. But the politicians themselves speculated politically at the expense of the same group. They wanted to prove - at great risk - that they were pushing the envelope to protect their constituencies. But it was precisely this constituency that they put in jeopardy in the process. And that is a serious mistake.

From innovation to damage control

Instead of revolutionising the housing market with radical policies - and becoming a model for the rest of the country - the coalition can now only do damage control. A hardship fund is supposed to help anyone who is overwhelmed by the back payments. But who can trust this plan after the "November corona aid" wasn't even fully paid ... in March?

The red-red-green coalition, as it's known, now has a hard fight on its hands until September's elections - and especially Die Linke, which is responsible for housing policy. In recent years, instead of a simple mantra of "build, build, build," it focused primarily on preventing displacement. In the future, it wants to take an even more radical approach and has therefore tied itself closely to the popular initiative of expropriating Deutsche Wohnen. But why would anyone trust it to successfully implement such policies in the future?

The coalition parties will now have to muster a great deal of political skill to at least conceal their defeat. But it will be difficult for them to bring lustre to the upcoming election campaign. In dealing with the corona crisis, the Senat's flip flopping has not been encouraging.

The transformation of mobility, another of the Beriln government's big promises, is a generational project, and quick wins have been few and far between.

Follow the money

An extraordinary economy has so far kept the coalition cohesive. Year after year, tax revenues have exceeded expectations, and there were surpluses to hand out. This was also important for housing policy: The red-red-green coalition was able to generously endow the state-owned housing associations with capital so that they could build new apartments or buy up private portfolios.

And in Berlin's boroughs, politicians were able to exercise their right of first refusal, spending lots but also gaining lots of publicity. 

All of that will disappear following September's elections. The appeal of radical political experiments has faded with the Constitutional Court's decision. The financial framework will also become much tighter because tax revenues will be lacking, but immovable investment needs for roads, schools and other public buildings will continue to rise.

It will simply be much tougher to govern Berlin. Whether the red-red-green coalition will have the strength to do so for another five years after the squabbles of the current election period is not certain.

The original German version can be found here.