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Berlin approves 5-year rent freeze

reuters.com

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Re: Berlin approves 5-year rent freeze

#231

Post by codedokode »

iagooar wrote: post #46
andy_ppp wrote: post #33

Earlier quoted context omitted.

So living in new buildings becomes undesirable even further because they are more expensive to live in than the rest of the city!

No, new buildings are desirable because they're new and will always find buyers, especially if built in a nice neighborhood.

I doubt that. In old cities like Berlin the best places are in the center because everything is there and there is good public transport access. And new houses are probably built somewhere in suburbs where there is no good transport, no subway, no train stations, nothing except for houses.

Re: Berlin approves 5-year rent freeze

#232

Post by lm28469 »

usefulcat wrote: post #4

Symptom: rents are too high Cause: insufficient housing supply Solution: disincentivize new construction?

> disincentivize new construction?

Oh but half the city is under construction work right now, they're building shopping centers, offices and hotels (I can count at least 6 10+ storey buildings being constructed in a 600m radius from my place, only one is for flats)

Investors want to max out how much money they make, tourists bring way more money than the general population, especially in Berlin

Re: Berlin approves 5-year rent freeze

#233

Post by claudeganon »

jlawson wrote: post #225
pure_ambition wrote: post #217

I think most people with an understanding of economics would agree that more supply is needed. The problem is, zoning laws are made by the cities themselves, which means they are ultimately made by the people who already live there. People who already live there don't want their neighborhoods bulldozed for luxury high rises, which is what happens when zoning is abolished. Then, there is the problem of the suburbs. A…

I wish someone with a deeper understanding would go to Japan and study how they got this so right. Their zoning laws don't separate uses, only nuisance levels, so you often see residential in commercial areas and small shops in residential neighborhoods. It's amazingly effective at reducing how far you need to go to get places, and gives the whole city a much more organic feel. Plus, there is actually housing if ther…

It’s actually pretty simple: housing isn’t an investment vehicle like it is in many parts of the West. The social and historical reasons why this is so in Japan are complicated, but the overall circumstances are not.

You can either have affordable housing that’s not an appreciating asset or let finance/real estate Capital run roughshod over everything in speculative flurries, leading to the insane state of affairs in many western cities today. You can’t have both.

Re: Berlin approves 5-year rent freeze

#234

Post by chimeracoder »

CPLX wrote: post #228
chimeracoder wrote: post #210

Earlier quoted context omitted.

> Are there any studies showing the extent to which that is true? There are actually plenty of studies that show that it's not true. Some of them are linked elsewhere in this thread. Your intuition is, in fact, correct and supported by a vast body of empirical research. This is one of the least-controversial topics among economists. It's very difficult to find a topic on which there's more academic consensus than ren…

I have a degree in economics, I'm aware of the concepts being discussed. Consensus changes. Right now many neoliberal market-fundamentalist theories are not holding up well in the context of history. Several things that are taken as gospel by economists, such as free trade is always good, or that low unemployment is too dangerous because it causes inflation, appear now in retrospect to have caused a lot of misery for…

> I have a degree in economics,

So do I.

> Consensus changes.

Sometimes, it does. In this case, it hasn't. The consensus on this topic is strong.

Re: Berlin approves 5-year rent freeze

#235

Post by bubblewrap »

johnnyfaehell wrote: post #92
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.

To be fair, this isn't their first or only response. They're building housing as fast as possible. Within a 5 minute walk from my apartment in the last year there has been 5 brand new housing towers built. They've also introduced laws to stop people from buying up apartments to rent out via Airbnb. Considering even with the law that limits how much they can raise their prices, they're just doing unneeded renovations…

They are not building as fast as possible. They actively drive investors away. Before this rent freeze, they discussed expropriate big investors.

Is there any data on AirBnB affecting the prices?

The city probably simply got more popular, which leads to rising prices.

Re: Berlin approves 5-year rent freeze

#237

Post by bubblewrap »

2tab wrote: post #184
jupp0r wrote: post #126

Earlier quoted context omitted.

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.

The curios thing about these anecdotes is that as dysfunctional as somewhere like the Soviet Union was, getting a affordable apartment in only 10 years would be a great deal for many today. In many metro areas property values have increased more the savings from the median income, meaning that the application, or aspiration, of the majority of people is going in reverse.

Prices are rising because that is what people are willing to pay. You can in fact get very cheap housing in Germany, outside of the big cities.

Re: Berlin approves 5-year rent freeze

#238

Post by tathougies »

supergauntlet wrote: post #207
cheerlessbog wrote: post #197

Earlier quoted context omitted.

As I understand it, homelessness has more complex causes than simply not having access to affordable housing.

Sure, but the majority of it comes down to "money": https://i.imgur.com/aUvpH0S.png The fact that we can't solve homelessness "just" by giving everyone easy access to affordable housing isn't an argument against affordable housing. It's an argument for better mental health services and a wider safety net.

The count in that graph also includes people living in temporary, public shelters. In my opinion, that makes it slightly less useful when attempting to determine the cause of people on the streets, which is what most people refer to as homelessness. It does seem silly to me to include those living in currently available public housing as 'homeless'. It's perfectly possible that most of those who lost jobs are currently housed in existing public options, and the majority of those on the streets are there due to addiction. Unfortunately, I couldn't find a breakdown of self-reported reasons for homelessness once those already sheltered were removed.

Source: http://allhomekc.org/wp-content/uploads/2019/05/2019-Report_..., Methodology Section, point 3, saying they include those living in shelters.

Re: Berlin approves 5-year rent freeze

#239

Post by bubblewrap »

galvin wrote: post #230
jaredklewis wrote: post #165

Earlier quoted context omitted.

Well, if that’s the issue, as a non German who doesn’t understand the situation or surrounding political environment very well, wouldn’t a much better solution then be to crack down on illegal hotel businesses? Seems like this law is only going to make things worse: the rent freeze will make renting even less appealing to owners, only increasing their desire to run their property as a hotel. No?

Rent seeking behaviour causes prices to rise making the market inaccessible to homebuyers. Making property less attractive as an investment should help curb this tendency.

People being willing to pay high prices to live in Berlin is what causes prices to rise. It has been a popular place to live in for a while.

Rent freeze will limit available housing and lower the quality of it.

Re: Berlin approves 5-year rent freeze

#240

Post by pkaye »

lm28469 wrote: post #232
usefulcat wrote: post #4

Symptom: rents are too high Cause: insufficient housing supply Solution: disincentivize new construction?

> disincentivize new construction? Oh but half the city is under construction work right now, they're building shopping centers, offices and hotels (I can count at least 6 10+ storey buildings being constructed in a 600m radius from my place, only one is for flats) Investors want to max out how much money they make, tourists bring way more money than the general population, especially in Berlin

So tax the shopping center, offices and hotels more to balance them out.
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