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Berlin approves 5-year rent freeze

reuters.com

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Re: Berlin approves 5-year rent freeze

#141

Post by Vinnl »

motivated_gear wrote: post #7
NikolaeVarius wrote: post #2

Well, at the very least, will be an interesting economic experiment.

This has been tried before in a number of different flavors. Most leave people worse off. https://www.bloomberg.com/opinion/articles/2018-01-18/yup-re...

Thanks, I hadn't realised that obviously existing landlords might stop renting out a place, which would reduce supply of housing - that could be problematic.

It also mentions that apartments got transformed into condos. This might be a problem with my not being a native speaker, but: if one apartment is turned into multiple condos, isn't it able to house more people? (Though being "new" housing, I suppose they'd then be able to ask higher rents again?)

Re: Berlin approves 5-year rent freeze

#142

Post by Bayart »

Roritharr wrote: post #9

I'm so ashamed of german politics of late. We're becoming the country where Homeopathy is GAINING popularity, where policy is increasingly symbolic in the good case, outright ideological in the worst case. It's really at the point where I don't want my kids growing up here anymore, problem is, where else?

> We're becoming the country where Homeopathy is GAINING popularity

In France there's homeopathy propaganda in pharmacies, it's big business here... And we have anti-vaxers gaining popularity, of all things. There's been a big wave of obscurantism regarding vaccines, nuclear, OGM, radio waves...

Re: Berlin approves 5-year rent freeze

#143

Post by slg »

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.

These kind of moves are band-aids that don't provide a viable long term solution. But sometimes the hospital is really far away and using a band-aid allows you to temporarily protect yourself from excessive blood loss or infection while you wait to get proper medical attention.

Re: Berlin approves 5-year rent freeze

#144

Post by CPLX »

baron816 wrote: post #129
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 problem with these types of price controls is that it’s inherently unfair. If you’re on the inside and lucky enough to get a rent controlled apartment, you win. Everyone else loses.

That's correct.

Or said another way, if you have strong ties to the city and/or are a longtime resident of the neighborhood you win, if you don't you lose.

Re: Berlin approves 5-year rent freeze

#146

Post by cyrksoft »

hashberry wrote: post #31

If affordable housing is an issue, then perhaps the government should provide it for its citizens, like building huge high-rises in Berlin. I used to rent in an expensive city but bought a cheap house in the suburbs (thankfully I work remotely). Everything is cheaper out here, from gas to utilities to food. But I did experience classism from my friends and family: there is status living in a world-class city. And hav…

> Government should provide it for its citizens

And how do you expect government to pay for that? How do you decide who lives in these houses? It's not that easy. Government isn't a magic entity.

Re: Berlin approves 5-year rent freeze

#147

Post by bobthepanda »

partiallypro wrote: post #70
bobthepanda wrote: post #56

Earlier quoted context omitted.

People who disagree with rent control largely disagree with the goals, which is to keep existing residents where they are. It’s effective at that until landlords abuse the loopholes, which you have to keep closing through legislative whack-a-mole.

> 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…

People in rent-control and rent-stabilized apartments are staying in their homes, which is the intended effect of the policy.

The fact that it hurts people who might want to move into the neighborhood, or from a rent-control/rent-stabilized apartment to a different one in the same neighborhood or the same building, is not really a goal that rent control is targeting.

Does it work at housing everyone? No, which is why we say it hurts the macro goal of providing affordable housing for all. Does it work at locking people into the apartments that they have, at prices they can afford, so that they won't be forced to move? Yes. Rent control has never really pretended to be anything else.

Re: Berlin approves 5-year rent freeze

#149

Post by kaybe »

mamon wrote: post #122
wander_homer wrote: post #101

Earlier quoted context omitted.

> Why is greed so bad here? The problem isn’t greed it’s the demand in the face of the lack of supply. Greed is bad in this situation because you can make more money of luxury apartments than those suitable for people who are somewhere between the poverty line and upper middle class. Hence new apartments in major cities tend to be more and more expensive to satisfy the demand of wealthier people. Greed is also bad wh…

Upper middle class are usually not homeless, right now they occupy some pool of apartments in cities anyway. By building more luxury apartments you encourage them to move, thus leaving their old apartment behind, either by putting it on sale, or renting it out. Think of this like a domino effect: those earning $10M per year buy luxury residence, leaving their old house for those earning $1M, who in turn leave their o…

I don't think they're going to move that easily. Rent has been going so much it is eating a larger income share than before for many of them too.

So what that leaves you with is disproportionate increase of demand and prices for smaller cheaper units.

Re: Berlin approves 5-year rent freeze

#150

Post by ashtonian »

IAmEveryone wrote: post #117
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.

That's true for, say, bread . Or really any fungible good where labor makes up most of the price of the product. If you artificially suppress those prices, there isn't enough money to pay the farmers and bakers, and no bread will be made. This freeze actually exempts new construction, so the whole problem is mood. But it's still interesting to think it through, and the result is different than simple economics may ma…

Location location location.

You seem to be asserting that the land value is arbitrary simply because it's located in a different area. The value is higher because the land is a lot more useful/productive / accessible/developed. You can't just wipe all that value away.

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