Berlin’s housing referendum is a “very significant moment” for affordable housing in Ireland and around the world, according to housing expert Dr Rory Hearne.
Provisional results from the referendum held over the weekend show that a majority of Berliners want the local Government to forcibly purchase hundreds of thousands of properties from institutional landlords.
The referendum is non-binding; however, those behind it have warned that it would be a “political scandal” if the will of the people is ignored.
Campaigners are now demanding that politicians table legislation that would force institutional investors to sell more than 240,000 homes to the local Government.
Any company that owns more than 3,000 properties would be forced to sell and would be paid “well-below market value” for the properties.
On Newstalk Breakfast Dr Rory Hearne, author of ‘Housing Shock; The Irish Housing Crisis and How to Solve It’ said the result is “really interesting.”
“For me and people who are concerned about affordable housing across the world, the Berlin referendum is a very significant moment and action because what it does is it shows that renters particularly can take action and say, we have had enough, and we can’t take this anymore,” he said.
He said the compulsory purchase proposal is a “complicated one” and warned that Ireland is in a different situation to Berlin when it comes to housing.
Referendum
He noted that the Irish Government has committed to holding a referendum on the right to housing – which, if passed, could pave the way for much stronger protections for renters.
“That would enable things like putting the rent freeze in place on a longer-term basis,” he said.
“Things like giving tenants life-time protections, things like putting in place the vacant property tax and the land tax.”
Warning
Dr Hearne said the Berlin result should be a “flashing red warning sign” for Ireland.
“I think what it shows us is that the role of corporate landlords and institutional landlords in a housing system make it so unaffordable, it reaches the point where citizens say we have to buy these units off them - and a majority of citizens - so it should set a flashing red warning sign for us in Ireland who are about a decade behind Berlin,” he said.
Investment funds
He warned that relying on investment funds to build housing inevitably leads to soaring rents.
“The point is that the institutional investors who are coming in here and who are developing from Ireland as well, they view property as a commodity,” he said. “They view it as an investment asset.”
“They want to make everything they can out of it. They want to charge the highest rents possible – we have seen it in student accommodation where they turn it into tourist short-term lets, we are seeing it in properties in Dublin, high-end properties that are being left vacant for three years because they don’t want rents to fall.
“We have to understand institutional investors are not in property for the good of their health, they want to make as much money as possible.
“That contradicts with people who want to buy an affordable home, people who want to rent an affordable home and the question of supply I think comes back to the State.
“The State has to build affordable housing. If we rely on these institutional investors, we will end up like Berlin.”
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