GERMAN housing campaigners have vowed to resist an “unconstitutional” ban on taking housing into public ownership.

The Christian Democrat-Social Democrat coalition government included the ban in a sweeping reform package unveiled on Thursday.

The Friedrich Merz chancellery’s plan shifts power to employers and asset-owners and away from workers and citizens, including by loosening regulation of temporary contracts, banning employees from taking sick leave without a doctor’s note from day one, deregulating Sunday trading and raising the pension age (currently 65-67) over time.

The inclusion of a ban on taking private housing under public ownership is intended to permanently block a Berlin scheme — approved by city-wide referendum in 2021, but not yet implemented due to prolonged political and legal obstruction — to take hundreds of thousands of rental properties owned by large corporations (those letting more than 3,000 properties) into municipal ownership to lower rents.

The companies would be compensated, but below market value and gradually via bonds. Huge companies like Vonovia, which lets over half a million flats, play a major role in the German housing market.

The Berlin plan has raised nationwide attention as a test of the power of Germany’s individual states to take control of housing provision. Federal Association of German Housing and Real Estate Companies president Axel Gedaschko praised the federal government’s decision to outlaw it, saying it had “massively unsettled” the housing sector. Christian Democrat MP Jan-Marco Luczak told the Morning Star’s German sister paper Junge Welt that Mr Merz had shown “socialist expropriation fantasies” must come to an end.

But Berlin Tenants’ Association managing director Wibke Werner told the paper the ban interfered with Germany’s Basic Law (its constitution), which guarantees state rights to take land into public ownership.

“The right to maximum profits in the housing market is essentially being declared a matter of national interest,” his colleague Rainer Balcerowiak said, saying housing campaigners needed to gear up for a fight to defeat the new law.

Berlin’s Greens and Left Party oppose the ban, arguing states need more power to cap rents and that the big rental companies prioritise profit-extraction over house-building.