Resistance is forming from the startup and business scene against the possible expropriation plans of a red-red-green state government in Berlin. With a public appeal, the initiative of the Berlin regional group of the startup association and the startup movement BAD1 (“Berlin on the 1”) are calling on the SPD, the Greens and the Left to refrain from socializing large real estate holdings, as the startup magazine Gründerszene reports.
The supporters also include well-known founders and entrepreneurs, including Finn Hänsel, CEO of the Sanity Group, headline investor Christian Miele, The Delta founder Julian Teicke and of course startup association leader Verena Pausder. They warn of serious consequences for the investment climate and the attractiveness of the capital as a business location.
“We reject the planned associations!” says the appeal. Their concerns extend far beyond the real estate industry. The political debate about interference with property rights could shake the trust of investors - and thus affect the very industry that plays a central role in Berlin's economic future. “Threatened mergers scare off investors and cause founders and talent to avoid Berlin in the future,” says Chris Rehse, spokesman for the Berlin regional group of the startup association.
The warning comes from a part of the economy that is particularly reliant on private capital. Startups need investors to develop new products, build their companies and grow internationally. The signatories fear that the socialization of housing stock could send a deterrent signal.
“Discussions about this alone create uncertainty and damage the investment climate, far beyond the real estate industry,” the letter says. “That would be fatal for Berlin’s entire economic dynamism.”
“The socialization plans are cutting into the branch of economic growth on which Berlin itself sits,” says Pausder. Julian Teicke explains to "Gründerszene": "The term 'expropriation' alone is poison for international investors. Investors will not be interested in the details. If fundamental rights such as ownership are questioned, then no money will be invested there. With these political developments, there is a risk that we will become a startup province and the city's rapidly growing economic factor will disappear."
The signatories see a fundamental economic policy conflict: How reliable are the framework conditions for private investments in Berlin if politicians are also considering the socialization of property?
Founders acknowledge problems in the housing market. The initiators do not deny that Berlin has a significant housing problem. On the contrary: Affordable housing is a crucial location factor, also for attracting and retaining skilled workers. The city has not yet found sufficient answers to the rapid growth and the associated need for additional housing.
That has to change quickly. But expropriation is the wrong instrument for this. “Socialization does not create a new apartment,” it is said.
They warn that the compensation payments required for socialization could burden the already strained Berlin state budget with additional debts amounting to tens of billions. The result: inability to act. Money that would have to be spent on compensation would no longer be available for schools, infrastructure or the construction of additional housing.
The founders criticize particularly sharply what they see as a fundamental contradiction in the economic policy announcements of the SPD, the Greens and the Left. In their exploratory paper, the three-party alliance promises to further develop Berlin as a leading startup and start-up metropolis with a “responsible and forward-looking economic policy”. The declared goal is to make the capital the “number 1 innovation location in Europe”. At the same time, the parties announced: “We are giving the Berlin economy planning security – with reliable framework conditions and clear commitments.”
For the signatories, this promise is in direct contradiction to the considerations of socialization. “It doesn’t fit together,” is her short answer. Anyone who actually wants to improve the economic conditions for companies must offer investors security instead of raising new doubts about how to deal with private property. They are calling on the three parties to give up their plans: “Anyone who is serious about announcing that they want to strengthen the conditions of startups, scaleups and the economy as a whole must stay away from socialization!”
