81–90 of 594 posts
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.
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
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…
That rationale is also how wars get started.
Not that I disagree with you, per se: lethal "cures" and excessive pollution were killing people in the early 20th century in the US and government intervention was required. But the Korean and Vietnam wars were also the result of people thinking that the spread of communism was also untenable.
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
You're assuming the high prices are a result of high demand. Speculators and other bad actors are also driving up prices.
In Berlin only 1.7% of housing is empty, of which 41% is because of ongoing modernisation, 31% because of renter currently changing and 12% because of mold or other damages.
So only approx. 0.27% of housing is empty in hope of higher prices or because of other reasons. [1]
The demand is real. No living space is created by this policy. Much will not be build because of it.
[1] https://www.morgenpost.de/berlin/article214572349/Nur-1-7-Pr...
Does this mean that five years of natural price increases will just happen all at once when five years have passed?
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
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…
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
That’s a simplistic view of the problem (simplistic as in introductory-economics-textbook-simplistic), and you have no idea what you’re talking about. Demand is obviously a factor (duh), but the main reason for the terrible, pathologic inflation of the real estate prices in Berlin is called speculation, together with government incompetence and, in some cases, blatant corruption. This rent cap is an emergency measure meant to stop evictions and give people around here a break. Of course it’s not going to solve the problem in the long run. No one is expecting that.
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
> Raising prices = Demand > Supply That’s a simplistic view of the problem (simplistic as in introductory-economics-textbook-simplistic), and you have no idea what you’re talking about. Demand is obviously a factor (duh), but the main reason for the terrible, pathologic inflation of the real estate prices in Berlin is called speculation, together with government incompetence and, in some cases, blatant corruption. Th…
Earlier quoted context omitted.
Genuinely curious: what do you think would be a better response?
If there is a 'market abberation' find it, and deal with it. For example, if tons of foreigners are buying homes, this might be a problem. Regulate it. If tons of people are buying 2-3 homes and renting, thereby driving a wedge between home-owners/non-home-owners, regulate that. If the issue is low interest rates, which are necessary for the regular economy, consider building in housing prices into the inflationary i…
case in point: Los Angeles requires that new construction include parking for a certain number of cars per housing unit. usually this means placing the new building on top of a subterranean parking structure, which costs a lot more than a building on a normal foundation.
and new construction must also include a certain amount of outdoor space per unit which also reduces the number of units which can be built into a given lot.
all of this overhead is passed along to new tenants/buyers.
How I imagine it to go down would be like this:
Today the politicians pat themselves on the back for their progressive stance on this topic.
In year 2 of the rent freeze most of the property investment will have seized, new construction is going to be mainly be occuring by entities that are forced to construct in this market, which are mostly government backed.
In year 3 the pressure on the city council will be so high that some emergency funding will be requested by the city to support the government backed property developers (degewo, GESOBAU, GEWOBAG, HOWOGE, WOGEHE, WBM) in their quest to buy expensive property from "evil" speculators to build more housing, as obviously the private markets have failed to do so.
In year 5 after two years of campaigning the funding is granted by a then black/green coalition in the Bundestag.