Something amazing is happening in Berlin. Next month, Berliners will vote in a referendum to force Germany's largest publicly traded landlords to sell 240,000 homes to the state, whereupon those homes will become publicly owned housing.

Berlin is a rarity: a semi-autonomous city whose history is overshadowed by a half-century of heavy public spending (in the west) as part of a program to prove that capitalism was a system of shared prosperity.


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The Wall's collapse and German reunification produced a distinctive legislative framework that treats housing's function as a serving the human right to shelter, not as a speculative asset that produces either capital gains (from flipping) or passive income (from renting).


The system tolerates private or commercially operated housing, but only to the extent that this serves the goal of sheltering Berliners so they can make the city live - operate its businesses, serve its people, and enjoy its amenities.

For decades, heavy regulation and publicly operated housing made being a Berlin landlord into a safe, low-return operation. Most people rented, protected from rent shocks and poor maintenance by a vigorous enforcement apparatus.


Creeping deregulation and vast sums sloshing around the world of the ultrawealthy and the investment firms that serve them has changed all that. Today, Berlin's housing market looks like most cities': a skyline of safe deposit boxes in the sky.

Today, a home in Berlin exists to provide speculative returns (from resale) or income without work (rent). If it also provides a place for Berliners to work, live, raise a family and serve out their retirement, that's nice, but it's hardly essential.


Rents in Berlin have risen by *43% over the past five years.*

Who raised the rents? Giant, multinational corporations seeking maximum returns for their distant shareholders, at the literal and figurative expense of the people of Berlin.

In an eyeblink, EUR40b worth of Berlin's housing stock has been turned into a publicly traded asset. That's more than all the institutionally owned housing in Amsterdam and London *combined*.


These rents are "financialized" - turned into monthly payouts to bondholders, spreading the risk of missed rent or eviction around, so it's not solely borne by the firms doing the investing. This allows them to convert ever-more housing from a life's necessity to an asset.


There's $5b more about to pour into Germany's housing market, thanks to pensions and other big institutionals seeking predatory extraction, and that's before we get into Real Estate Investment Trusts.

REITs are *private* equity, and they're a devastatingly effective tool for money-laundering. REITs are typically backed by anonymous shell companies from financial secrecy havens and onshore-offshore zones like Delaware, Nevada and Wyoming.


The owners of these shell companies are...other shell companies, in non-cooperating jurisdictions. The actual beneficial owners are narco gangsters, corrupt public officials, and the vast family trusts of ultrawealthy, intergenerational neo-aristocracy.


REITs are a major force behind the global housing price emergency. The REITs scooping up German homes aren't just the ones owned by Russian oligarchs - there's also a ton of money from other EU countries, notably Spain and Ireland.

REITs represent a loophole to EU tax treaties, allowing Europe's wealthy to reap huge gains in another EU country, while ducking taxes.


Berlin is a weird case. Thanks to a combination of norms and regulations, it escaped the slow transformation of its built environment from a means to serve the city into a means to serve absentee investors. When the change arrived, it arrived in a torrent, too quick to miss.

Berlin is a weird case because its laws allow the public to call a halt to this game and redistribute the tokens.


If Berliners vote Ja in Sept's referendum, the investors will get "fair market value" for these homes, and the city will assume their ownership and management.

It's quite a reminder that Steven Brust was spot on when he said that you can tell the left from the right by asking "What's more important: property rights or human rights?" The left's answer is "human rights." The right's answer is "Property rights *are* human rights."

Meanwhile, in America...


The American legend of class mobility had two paths: wage gains (largely the result of organized labor) and property appreciation (largely the result of public homebuying subsidies).

Both paths had color bars, but of the two, housing was the most racially segregated path to prosperity. Redlining and other predatory practices meant that the American journey from renter to owner was primarily a white journey.


White families accumulated wealth through their family homes, and Reagan convinced them to shut down the wage-gain path, with racist dogwhistles.

Now, 40 years on, the joke's on them - their kids are going to be renters because they have to liquidate the family home to pay for care, retirement and education - the systems that collapsed when organized labor was no longer there to defend them.


US real-estate is a criminal's playground, the world's most vigorous and thriving money-laundry.

If you are a sanctioned kleptocrat, a network of enablers - realtors, lawyers, investment advisors, and bankers - will help you turn your stolen loot into American property.


As Global Financial Integrity report in "Acres of Money Laundering: Why US Real Estate is a Kleptocrat’s Dream," "the U.S remains the only G7 country that does not require real estate professionals to comply with anti-money laundering (AML) laws and regulations"


The US also lacks pesky corporate transparency laws that would unmask the beneficial owners of US homes, malls and office-towers, which is why "82% of US cases involved the use of a legal entity to mask ownership."

Property speculation isn't just for major metros. As On The Media reports, there's an epidemic of speculation and eviction in distressed American rustbelt towns, the places where Black people found middle-class prosperity after the Great Migrations.


These cities - gutted by financialization and the offshoring of manufacturing - are now distressed assets. Everyone who could leave them has. The left-behinds have no way to go and are hostage to whatever predatory practices the wealthy and their funds can conceive of.

Property speculation would never be a stable means to broad prosperity.


As Elizabeth Magie taught us when she created The Landlord's Game in 1902, property is a winner-take-all game that eventually gathers all the assets into a few extractive hands.

(An unscrupulous salesman named Charles Darrow stole Magie's game and sold it to Parker Brothers in 1935, who rebranded it Monopoly and sold for decades it without acknowledging Magie's authorship)


We've had decades of wage-stagnation and a great liquidation of American homes to pay for necessities lost when we abandoned labor markets to individual wage-negotiations, so capital could take more and use some of it to dismantle guaranteed education, health and retirement.


Things are at a breaking point. The liquidation is racing up the economic ladder, as people who thought of themselves as middle class (and supported attacks on the rights of renters and poor people) find themselves forced to sell or reverse-mortgage their family homes.


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