“All power to the soviets!” ran the slogan touted by the Bolsheviks during the October Revolution in Russia. And since the days of the Paris Commune that Karl Marx admired, Germany’s left, socialists and Greens have been intrigued by the idea of a democracy based on the council system.

Lately, that fascination has inspired the idea to more or less turn control of the municipal housing companies over to so-called tenant councils. At least that is what a referendum initiative intends to accomplish. Berlin’s Senator for Urban Development Andreas Geisel already praised the proposal, while admitting to misgivings about the massive inroads the scheme would make on the state coffers. He let it be known that the Senate of Berlin is already working on many of the proposals included in the draft bill. The Greens and The Left are in favour of the scheme anyway.

In a first step, the required 20,000 signatures for a referendum application will be collected. There is not a doubt in my mind that they will get enough people to sign up, not least because they have the backing of Berlin’s tenant associations with their 100,000 members. And I am sure that the referendum has every chance of success. As a reminder: Roughly a year ago, Berlin’s residents voted against the development of the periphery of the former airport grounds in Tempelhof – willfully exacerbating the housing shortage in Berlin by doing so.

A 53-page draft bill for a “Berlin Housing Supply Act” is already on the table. It proposes that the municipal housing companies degewo, Gesobau, Howoge, Stadt und Land, WBM, and Gewobag be turned into statutory corporations.

The State of Berlin would be liable for all debts of these corporations. This means: Tenants and employees of the public housing companies will get to say whether and when to raise rents or to modernise, while the State of Berlin will shoulder the entire risk. Ultimately, tenants will treat themselves to a low rent (it is supposed to be as low as 5 euros per square metre) at the expense of the state budget.

A board of directors is to play a key role in these statutory corporations. Half of the board members are to be policymakers, the other half will be council members:

• Four members will be representatives of the general tenants’ council.
• Two members will be representatives of the advisory board composed of tenant initiatives and interest groups representing social services and welfare organisations.
• Two members will be employee representatives from the housing companies.

Naturally, the scheme will have strictly regulated quotas. The legislation will define how many council members will have to be German citizens, how many of them should have a migrant background, how many should be disabled, and so on. And yes, of course, the council members will be obliged to act along the lines of feminist gender ideology. The corporation will agree pursuant to Art. 28, Sec. 2, “to apply the gender mainstreaming strategy to all measures and on all levels,” and will have to file reports on the matter, too.

Business acumen, by contrast, is not required and probably not desired either, even though the councils will have to approve every measure taken (such as sales, maintenance, modernisations, rent increases, etc.). None of the measures will go ahead without the express approval by the “general tenants’ council” (Art. 22, Sec. 2). Implementing the law would quickly get the housing companies into serious financial trouble. Art. 13, Sec. 5 of the draft bill stipulates a de-facto right of rent-free residence for all because it says that tenants not paying their rents will not have to worry about consequences. That will naturally make it superfluous (or even illegal) to run credit checks on tenant leads before signing lease agreements. It says verbatim: “Requesting evidence of creditworthiness from a private credit reference agency as precondition for signing a lease is not permitted… Households receiving benefits under the German Social Security Codes II or XII, the Asylum Seekers’ Benefit Act, or basic subsistence income for the elderly are exempt from forced evictions for rent arrears.”

An acquaintance of mine who owns several residential properties in Berlin commented on the proposal by saying, “If a referendum is held, I will vote in favour of it. Because if it is adopted, the municipal housing companies will take all the troubled tenants off my hands, and make my life as private landlord easier.” While I appreciated the argument, I had to contradict him: That is not the way I see things. Not least because the taxpayer will have to foot the bill when everything is said and done. Moreover, I’ll bet you that the bill is only paving the way for the next demand, to wit, that such rules (ban on credit checks and on the eviction of defaulting tenants) not be limited to municipal housing companies but be expanded