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Berlin approves 5-year rent freeze

reuters.com

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Re: Berlin approves 5-year rent freeze

#71

Post by Roritharr »

closetohome wrote: post #59
andy_ppp wrote: post #26

Earlier quoted context omitted.

Land values rise to make the margins developers work within very small. Land is a problem everywhere and someone owns it and will always try to extract the best price if you have planning permission for it. So maybe capping land prices and forcing sales for desirable schemes would work better. It will of course never happen as ownership is fundamental to our thinking in the west. I actually find the idea of the gover…

The problem isn't developers at all - they make only a small margin. The people who are abusing the system are equity investors who demand a return on their investment within as little as 2-3 years, leading to unrealistically high rents. All rent control is doing in this case is forcing investors to take a longer period of return.

Did nobody think that to invest, you need to have liquidity?

It's called LIQUID for a reason. If another place has better investment opportunities, the investment will simply cease. Why would anyone take their LIQUID assets and put it into real estate (in german it's called IMMOBILIEN, meaning immovables to make it clear) in a place that actively discourages return on invest?

Re: Berlin approves 5-year rent freeze

#72

Post by mixmastamyk »

tmalsburg2 wrote: post #42
vtail wrote: post #10

Earlier quoted context omitted.

Raising prices = Demand > Supply. You can either try to curb the demand (by e.g. creating incentives for companies to build offices elsewhere, move government bureaucracy somewhere else, etc.) or improve the supply by facilitating new construction, which in most places on earth is limited by, again, local government restrictions. edits: grammar

But how well has this worked in comparable cities like London or Paris where only wealthy people can afford to live?

I understand it worked in Vancouver where it was tried. I've not heard news that London or Paris has tried.

Re: Berlin approves 5-year rent freeze

#73

Post by quakenul »

vtail wrote: post #10
tmalsburg2 wrote: post #5

Earlier quoted context omitted.

Genuinely curious: what do you think would be a better response?

Raising prices = Demand > Supply. You can either try to curb the demand (by e.g. creating incentives for companies to build offices elsewhere, move government bureaucracy somewhere else, etc.) or improve the supply by facilitating new construction, which in most places on earth is limited by, again, local government restrictions. edits: grammar

When things go bad government should intervene to protect people. These steps are always going to be extraordinary, because the situation is extraordinary, but it is the very role of government to apply necessary fixes without false pride for any economic or governmental models.

Of course, questions as to how one ended up in a bad situation have to be asked. Underlying issues should be fixed.

But when things get out of hand, when extraordinary action is deemed necessary to adjust for an untenable situation, it is not only right but paramount to take action.

As is with all issues, people will disagree with any specific course of action. By all means, vote to that effect.

Re: Berlin approves 5-year rent freeze

#74

Post by NikolaeVarius »

CPLX wrote: post #43
vtail wrote: post #3

As a person born and raised in Soviet Union, I strongly believe that whoever thinks that a proper economic response to raising prices is literally to order them to stop raising , is a lunatic.

As a person living in New York who thinks rent stabilization has been largely more successful than not at achieving its goals, I disagree.

It's achieved its goals of letting/forcing people to stay in their apts.

It has utterly failed in actually dealing with housing

Re: Berlin approves 5-year rent freeze

#75

Post by rolltiide »

vtail wrote: post #45
sdegutis wrote: post #20

Earlier quoted context omitted.

What's wrong with legally limiting artificial price hikes to prevent people from abusing Demand > Supply for the sake of their greed? [Edit] To clarify, they seem to be "artificial" price hikes because they don't in any way necessary to cover costs. People realize they can charge more and get more money, so they simply do. That's inherently avaricious and unethical. Sure, maybe prices work themselves out, so that pri…

You are using emotionally charged words ("artificial", "abuse", "greed"), which makes a bit hard to have a constructive argument, but let me try :). One way to think about prices is as a signal . When greedy landlords raise prices, they send two signals: (1) To other landlords and wanna-be-landlords, saying it's an attractive market which would justify new construction or cleaning up your spare bedroom and putting it…

remember, gentrification is typically used as a pejorative

good point in that it undermines constructive argument

Re: Berlin approves 5-year rent freeze

#76

Post by tmalsburg2 »

vtail wrote: post #63
tmalsburg2 wrote: post #42

Earlier quoted context omitted.

But how well has this worked in comparable cities like London or Paris where only wealthy people can afford to live?

And only really wealthy people can afford to stay in a 5-star luxury hotel. The underlying mechanisms are the same: when demand for a resource is greater than supply, you can either artificially limited the demand by some controlling body, or let the market bring them into equilibrium through pricing signals.

By electing a socialist government the people of Berlin have indicated that they don't want their city to become a five star hotel. Simply letting the market take control is therefore not an option.

Re: Berlin approves 5-year rent freeze

#79

Post by rchaud »

vtail wrote: post #10
tmalsburg2 wrote: post #5

Earlier quoted context omitted.

Genuinely curious: what do you think would be a better response?

Raising prices = Demand > Supply. You can either try to curb the demand (by e.g. creating incentives for companies to build offices elsewhere, move government bureaucracy somewhere else, etc.) or improve the supply by facilitating new construction, which in most places on earth is limited by, again, local government restrictions. edits: grammar

How do you know that these supply building and incentive programs are not part of the plan? Such programs take years to materialize and show impact. I would imagine that's why they voted on a 5-year freeze.
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