“Rental sharks” are a favorite topic of left-wing journalists. Now the “Spiegel” has uncovered a case that apparently involves subsidy fraud on the Berlin real estate market. Left-wing journalists are accused.
The case as reported in the “Spiegel” and other media: journalists who have been employed by the “Süddeutsche Zeitung”, the “taz”, “Zeit”, the “Berliner Zeitung” and the “Spiegel” over the years , bought an apartment building in Berlin in the early 1990s. They received state subsidies of 3.4 million Deutschmarks for the renovation.
Such subsidies were common in Berlin at the time, and the deal was very simple: you get subsidies from the state, but you have to offer the living space at a reasonable price. The rents are capped. There were also special funding programs, such as those where the recipients were “self-help groups” who were supposed to move in there.
According to “Spiegel”, the journalists violated many funding conditions. In other words, they received the full amount of the subsidy, but did not comply with the rent cap, for example, but instead demanded double the rent, whereby the excessive rent had to be transferred in cash or to another account. And they would not have adhered to the conditions for the self-help groups.
These are the allegations. If they are correct, this is a clear case of subsidy fraud, which is probably time-barred. And what does this story teach us? Do left-wing journalists generally have a double standard? Of course not. It is true that examples of double standards on the left are not uncommon, if you consider, for example, that members of the Green Party are currently demonstrating in Lützerath against things that they themselves helped to decide. The behavior of some socialists in the EU Parliament, who are now being accused of corruption, is an example of double standards. Nevertheless, generalizations are forbidden.
Rainer Zitelmann is a real estate investor and author of numerous books, including “The Society and its Rich. Prejudices about an envied minority.
Are many left-wing journalists “hire sharks”? Unlikely. But many journalists believe that the only way to get rich in the real estate market is to behave like this: cheating others, exploiting tenants. Anti-capitalists adhere to zero-sum beliefs. What is meant by this is that they believe that the rich can only become rich if they take something away from others. People who are in prison also believe that – and unfortunately so do many anti-capitalist humanities scholars and social scientists.
There is much to suggest that the accused journalists – who spoke out against “public failure and private greed” in their articles – thought the same way. It is said that they now want to sell the house they bought in the early 1990s for 1.2 million Deutschmarks (adjusted for inflation, that would be almost 1.2 million euros today).
The selling price that can currently be achieved on the market is estimated at twelve million euros. Even taking inflation into account, the sale price would be ten times higher than the purchase price. The capital used for the renovation must be taken into account, but most of this did not come from the company’s own funds, but was subsidies paid for by the taxpayer. The profit would probably be even higher because part of the purchase price was certainly financed by third parties.
Some media have also criticized the fact that the property is now obviously being sold at a high price. Is that worthy of criticism? It would not be worthy of criticism if the journalists had adhered to the funding conditions. In this case, it would not only be legal, but also legitimate, because they renovated the property and, moreover, would have had to do without collecting the rents that could be achieved on the market for many years. But that’s exactly what they didn’t want to do without, if you can believe the “Spiegel”. What do you call such behavior? Greed.
In other words, exactly what left-wing journalists often all too carelessly accuse real estate owners or even investors and entrepreneurs in general.
The victims were the tenants who had to pay too much rent. The victims were the taxpayers who were cheated. And the left-wing journalists were also, in a way, “victims” – namely, of their business-agnostic, anti-capitalist resentments, according to which one must behave in this way in order to make one’s fortune.
The point: If they had behaved as was legally and morally required, namely not only claiming the subsidies, but also adhering to the public requirements, they could make a lot of money selling the property. If the allegations are confirmed to be correct, the journalists should now be fair enough – even if the fraud has become statute-barred – and pay back the excessively high rents and subsidies to the tenants and the state of Berlin, with interest and compound interest.
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