By Riham Alkousaa and Matthias Inverardi

BERLIN (Reuters) -A majority of voters in Berlin wants city hall to expropriate major landlords such as Vonovia and Deutsche Wohnen (OTC:) to help reduce rents in the German capital, provisional referendum results showed on Monday.

Following Sunday’s election, Berlin government announced that 56% of voters voted for the initiative. The 39% who opposed it were only 39%.

Vonovia is the biggest German residential rental agency. It said that it reached the threshold of 50% needed to acquire Deutsche Wohnen. The result created a massive housing company with more than 550,000 apartments, worth over 80 billion euros ($93.7billion).

Berlin is experiencing a lot of anger over tenants rights and the affordability of housing. These issues were major concerns in Berlin’s traditionally left-leaning election campaign.

It was the group who initiated the referendum that declared victory. They urged the city senator to create a law to socialize and expropriate large housing communities. The campaigners believe that the city will seize control of around 240,000 apartments.

It would be an affront to the political system to ignore the referendum. Kalle Kunkel, spokesperson for the initiative said that the company will not stop until housing group socialization has been implemented.

‘MANIFOLD CHALLENGES’

Responding to the referendum result, Vonovia CEO Rolf Buch said in a statement: “Expropriations do not solve the manifold challenges on the Berlin housing market.”

For more positive solutions to be found, Buch called on the Berlin market players to cooperate more.

Deutsche Wohnen, Vonovia and others announced earlier in the month that they would be selling nearly 15,000 Berlin apartments at 2.46 billion euros to gain political support.

According to preliminary results, Franziska Giffey, the Social Democrats (SPD), retained Berlin’s control in Sunday’s elections.

Giffey recoiled from her original stance of rejecting expropriations and said that she should respect the referendum results.

According to Giffey, expropriations “do not create any new apartments or address the problem of affordable housing.” She said Monday to the ARD.

Giffey urged the Berlin government, to create a bill for legal review. The draft must be reviewed and, if not legal, we can’t do it.

Germany’s federal elections were won by the Social Democrats with just 25.7%. That ends 16 years under Angela Merkel’s conservative-led rule. But, there are still difficult coalition talks ahead.

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