Berlin approves 5-year rent freeze • Hacker News Board

Re: Berlin approves 5-year rent freeze

#131

Post by quakenul » Tue, Jun 18, 2019, 5:53 PM UTC

WkndTriathlete wrote: post #83

quakenul wrote: post #73

Earlier quoted context omitted.

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…

> 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 them. 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…

Nope. Just like physics is exactly not how an atom bomb got dropped -- in an extremely important distinction between physics and atom bomb dropping -- there is a very important distinction between government intervention and going to war.

In a complicated world things will correlate. I hope this neither makes a generalised case against physics nor government intervention.

Re: Berlin approves 5-year rent freeze

#132

Post by refurb » Tue, Jun 18, 2019, 5:53 PM UTC

SomeOldThrow wrote: post #94

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.

Anyone who looks at regulations like this and sees the Soviet Union is themselves a lunatic. This is not a planned economy, and people do not need to profit from housing to build it, and housing should be a human right.

OK, then look at NYC in the 1970's. Severe rent control resulted in crumbling buildings. Price controls are bad policy.

Re: Berlin approves 5-year rent freeze

#133

Post by mixmastamyk » Tue, Jun 18, 2019, 5:54 PM UTC

mantas wrote: post #104

mixmastamyk wrote: post #91

Earlier quoted context omitted.

Agreed except for last part. Devs want to build homes, as that's what they do.

Nah. Build too much and your margin gets slimmer and slimmer. Build less and get same profit with less work while keeping the market hungry for the future.

> Build too much…

Thankfully, that's not a problem anywhere in places with skyrocketing rents.

Re: Berlin approves 5-year rent freeze

#134

Post by kaybe » Tue, Jun 18, 2019, 5:54 PM UTC

innocentoldguy wrote: post #106

SomeOldThrow wrote: post #94

Earlier quoted context omitted.

Anyone who looks at regulations like this and sees the Soviet Union is themselves a lunatic. This is not a planned economy, and people do not need to profit from housing to build it, and housing should be a human right.

If you take the monetary incentive of profit away, what other motivator exists for people to take huge financial risks and expend vast amounts of money to purchase land and construct houses and other living structures? I guess you do have the right to wander into the forest and build yourself a fortress out of pine cones and moss, but if you want to live in a modern house with modern amenities, there's going to be a…

> I guess you do have the right to wander into the forest and build yourself a fortress out of pine cones and moss..

Is there anywhere where this would be legal? Certainly not in Germany.

Re: Berlin approves 5-year rent freeze

#135

Post by Rebelgecko » Tue, Jun 18, 2019, 5:54 PM UTC

CPLX wrote: post #113

partiallypro wrote: post #70

Earlier quoted context omitted.

> People who disagree with rent control largely disagree with the goals This is absolutely false. They just understand, by economics, and history, that it has failed. The best way to decrease rents is to make housing more affordable through supply. Unfortunately it sometimes takes time for supply to catch-up and you get price surges...but you also have special interests, especially in the US (aka real estate firms) t…

> rent controls are damaging To whom? Rent controls redistribute the value capture from gentrifying neighborhoods away from landlords and towards longtime residents. That's what they're intended to do, and they do that.

Anecdotally, I know multiple people that have turned down better paying (and arguably better for society) jobs because they would have to move but don't want to give up on their current rent-controlled apartment.

What seems to always end up happening is that new residents subsidize the rent controlled ones, which creates this weird lock-in dynamic because people can't afford to move into equivalent housing literally next door. Rent control also gives landlords an incentive to encourage older residents to move. Sometimes they do this with big payouts to people that are willing to leave (I know someone that got offered $10k to leave his current place, but I've heard of payments as high as $50k). Less scrupulous landlords try to accomplish the same thing by letting the living conditions deteriorate to the bare minimum level that code enforcement will tolerate (or lower than the bare minimum, because they know that certain groups of people such as undocumented immigrants are reluctant to contact the authorities).

Re: Berlin approves 5-year rent freeze

#136

Post by baddox » Tue, Jun 18, 2019, 5:55 PM UTC

rchaud wrote: post #65

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.

I wasn't aware the Soviet Union allowed rich investors to buy up chunks of the housing supply and rent them out as hotels without a business license, while also bypassing the numerous regulations that hotels have to abide by.

If that is the problem, could it be that regulating that would be a better solution?

Re: Berlin approves 5-year rent freeze

#137

Post by clarkmoody » Tue, Jun 18, 2019, 5:56 PM UTC

supercall wrote: post #36

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

You're assuming the high prices are a result of high demand. Speculators and other bad actors are also driving up prices.

Price is where supply meets demand. So prices moving up means either:

1. Demand is increasing faster than supply can keep up

2. Supply is shrinking faster than demand falls

For housing in large cities, it's usually (1) above.

Easy money policies stoke artificial demand by making money cheaper (lower interest rates). That makes speculation in housing easier than it otherwise should be. Don't blame "speculators." They are simply responding to conditions created by central banks and the fiat money system.

Re: Berlin approves 5-year rent freeze

#138

Post by CPLX » Tue, Jun 18, 2019, 5:56 PM UTC

chimeracoder wrote: post #120

CPLX wrote: post #111

Earlier quoted context omitted.

The goal of rent stabilization is to make neighborhoods more stable. The concept is right there in the name, and that's exactly what it does. It's not built to stop shortages, or to increase the availability of apartments for people moving to the city.

> The goal of rent stabilization is to make neighborhoods more stable. The concept is right there in the name, and that's exactly what it does. No, it's not. Rent stabilization is, purportedly, about ensuring that poor or low-income residents specifically aren't pushed out of neighborhoods or New York City entirely due to gentrification and rising rents. In terms of making housing affordable for those people, rent st…

That's really not actually why these laws have been created.

Their intent has always been to protect existing residents.

Not poor or low income, necessarily, in fact for the most part the original idea was to protect the middle class, not so much the poor. Which should be unsurprising if you have any basic concept of who wields political power in cities.

The key distinction is between people who are already there and people who aren't. Your assumption is a very common one but it's a misconception, and the difference is pretty crucial. It's not that hard to figure out: having massive rent increases possible upon vacancy, as well as almost no means testing (only in one special case) are two of the several obvious tells.

Re: Berlin approves 5-year rent freeze

#139

Post by vtail » Tue, Jun 18, 2019, 5:56 PM UTC

jupp0r wrote: post #126

rchaud wrote: post #65

Earlier quoted context omitted.

I wasn't aware the Soviet Union allowed rich investors to buy up chunks of the housing supply and rent them out as hotels without a business license, while also bypassing the numerous regulations that hotels have to abide by.

No, they just declared housing to be affordable (in the $20/month ballpark region) and people had to apply 10 years in advance to move to a larger apartment. This is my parent's experience in east Germany, should be similar to Soviet Union.

It was! Also, in early 1990s we had food shortages and long lines in stores for basically everything (in Moscow! things were much worse in the regions), which was a direct result of the government controlling the economy for many years through directives and completely ignoring the basic laws of economy.

Sadly, the examples of economies of Soviet Union, and Cuba, and Venezuela, and North Korea etc. are somehow not sufficient enough for people to realize the danger of such control.

Re: Berlin approves 5-year rent freeze

#140

Post by jordanbeiber » Tue, Jun 18, 2019, 5:57 PM UTC

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.

Soviet and planed economy truly sucked, so an anarchy style laissez fair market is the only other viable option?

Why do something equally retarded in the other direction?

Reasonable regulation is the only way we can hope to achieve a decent balance in a social democracy.

Something that arguably works pretty well here in parts of the west.