After the rent lid was tipped yesterday, thousands of demonstrators gathered at Berlin's Hermannplatz to protest against the decision of the Federal Constitutional Court
Photo: Stefan Zeitz / IMAGO
The The Federal Constitutional Court spoke about the Berlin rent cap, namely in the form of the Second Senate, whose jurisdiction was probably given by the predominance of the question of competence law. The rapporteur was the former CDU Minister Peter Huber; it was mainly an abstract control of norms that the parliamentary groups of the Union and FDP had tried. The decision was surprisingly clear and unambiguous (7: 1 in the justification, unanimous in the result). That is a problem. Once again, a deep shadow falls on the judicature of the Second Senate, which is increasingly proving to be politically and economically uninformed and naive, and from a legal point of view to be technically weak.
The Senate has become famous and notorious in the past few years primarily because of its erratic, politically and economically misguided and statist and sovereignist European jurisprudence. Occasionally this appears provincial, occasionally prepotent or inconsistent, always misguided in principle. Incidentally, Peter Huber, as rapporteur, is not inconsiderably responsible for EU judicature. In recent years, the counter-image has been provided by the First Senate, which has developed a sensible stance on EU fundamental rights through major decisions.
In some ways, the rent cover decision on the inside demonstrates what distinguishes the EU jurisprudence on the outside. Its political impact is also likely to be comparable: Just as the EU decisions are inspiring the Europafreund: inside, who (fortunately) are advancing gradually from a shift of competence via a development fund to a social and redistribution union, the rent cap decision should motivate the left-wing forces in the Berlin coalition and the Re-polarize the election campaign in terms of social policy.
The popular initiative for the socialization of large housing groups, which is fundamentally supported by the Greens and the Left and parts of the SPD, should get a boost. The idea of socialization in economic life, as it is constitutionally anchored in Article 15 of the Basic Law, could experience a renaissance. Because the rent policy problems are not resolving, the land prices are too high due to scarcity and speculation for the “free” market to solve the social challenges. Expensive new buildings hardly defuse tenants' worries about their disposable income. They don't want to be forced to move by the market either. The federal rental price brake has been tightened, but it still seems hardly to impress landlords inside. The right of the strong prevails and raises property issues anew and intensified. That is now to be expected without the court having to reckon with it. The latter is not his job either.
Has the court done its job? No!
But has it fulfilled its very own task of interpreting the constitution correctly? That is to be answered in the negative. The decision ignores the fact that, as it claims, there is not just a private and a public housing sector. At its core it operates with a revived but always wrong one public private distinction. The claim is in particular that the private, "freely financed" sector is regulated by civil law in terms of prices, while not only freely financed Housing falls within the competence of the federal states. It is correct that the BGB contains a social tenancy law for ideally presented as equal contractual relationships between “private people”. However, the sanctions are purely private law, require lengthy judicial enforcement and only have a very limited effect in practice because the “threat” behind the law is obviously not sufficient to impress the stronger contracting parties in the long term. In addition, they are based on the level of market prices in the form of comparable rents. They don't even try to influence the price level itself.
A “freely financed” housing sector does not exist, however, because the state always defines the framework conditions for economic activity - from price law to the particularly subordinate, by no means private central bank. Socially bound apartments in Germany, on the other hand, were (regrettably perhaps) often built in cooperation with private individuals. At the same time, there is a “third sector”, which is also and perhaps even more obviously closed to the private-public distinction. Today these are predominantly the cooperatives, which may appear formally private, but are currently trying to evade market forces and prices in the mode of civil society self-organization. There is also the rental house syndicate or publicly operated cooperatives. What is even more important, however, is that the non-profit housing scheme that existed in West Germany until 1990 provided for comprehensive tax advantages for housing companies - for example the “Neue Heimat” of the trade union movement, which was wrongly forgotten despite its many merits and which failed due to a scandal at the time - which the CDU / CSU / FDP- In view of the neoliberal paradigm that has been rising since the 1980s, the federal government must be buried. Are these private or public actors that the Federal Constitutional Court believes it can distinguish so clearly? This is anything but unambiguous and ultimately cannot be made in a purely formalistic manner in a satisfactory manner.
However, the formalism of the court does not help with the classification of the fixed rent price limit in old buildings that was in force in West Berlin until 1988. This strict regulation, which ostensibly had to be classified as a relic of war, was disposed of against strong resistance from social movements, which ultimately contributed to a change of government in West Berlin towards SPD / Green alternatives.
In the decisive passage of the decision, the Second Senate now claims that the title of competence for housing, which was transferred to the states in the course of the federalism reform in 2006, clearly did not refer to “freely financed” housing - state practice shows that. In the course of time, despite various regulations, this has evidently progressed in the direction of the “social market economy” - always with the “synallagma” of the Do ut des in the centre. That sounds anti-formalistic, but it is precisely not. The court found that the title was underestimated in terms of price law in its origin. On the other hand, there is much to suggest that prices naturally belonged to housing (and not only to “civil” law), even if a neoliberal state practice in the 1960s, with the inclusion of artificial-ideological distinctions between the private and the public, turned away from it and tried to restore some early liberal conditions . The fact that the court perpetuates this false opposition is to be regretted as a formalistic aberration. With regard to the state of Berlin in particular, this must be irritating, because precisely there, “freely financed” housing with in principle “free” pricing hardly existed for decades. The judges therefore seem to have succumbed to a competence question of market ideologies in their apparently so technical assessment.
Got into the formalism trap
It is true that the threat of administrative sanctions through the annulled law or the urbanistically motivated fight against segregation is not per se establish a significant difference to the social tenancy law of the BGB. But once again one should not have fallen into the formalism trap. The administrative arrangement and enforcement make a big practical difference, so that the Berlin Administrative Court recently correctly recognized the constitutionality of the rent cap. In particular, however, it would be constitutionally necessary and logically consistent been to generously interpret the competence in housing on the one hand with a view to Art. 70 GG - the primacy of the states - in view of the doubts regarding the original meaning. It is a recognized rule of interpretation to judge competence titles in this way (1) country-friendly and (2) origin-related. The price law should therefore clearly have been included in the housing sector. As shown, this is further supported by the fact that the “housing sector” (especially in Berlin) did not have a clearly defined “free” sector in terms of its importance under federal law until the federalism reform. With this, however, the supposedly evident assignment to "civil law" also falls. And that in a double sense.
The Senate could and should have saved itself the instruction about an impending legal fragmentation, because in reality there are no collisions or contradictions of regulatory concepts. Since the chamber decisions of the First Senate of 2020 left the question of competence open, they were implicitly more sensitive to the fact that it is not up to the court to declare the public to be private or to devalue “compulsory management” compared to “social market economy”. The Federal Constitutional Court has exceeded its rule of law defined role with both in the rent cover decision. Defining crises in the supply of housing and saying when there is less market and more “coercion” is a matter for the state (as well as the federal) legislature.
Ultimately, nothing is as simple as it appears to the Second Senate: not German sovereignty and not civil law.