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Berlin approves 5-year rent freeze

reuters.com

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Re: Berlin approves 5-year rent freeze

#321

Post by iso-8859-1 »

pgeorgi wrote: post #304
tschellenbach wrote: post #51

Why does the national government allow the city of Berlin to implement such short sighted and destructive policies? There should be some guidelines set by the national government about what you can and can't do in terms of housing supply.

Because Germany is a federal republic. There's stuff the federal government just has nothing to say about. I mean, in case of Berlin, they could help by moving back to Bonn. Lots of real estate, both office and residential, would free up immediately.

There is fresh federal legislation on this subject: Mietrechtsanpassungsgesetz (MietAnpG). Here is an overview: https://www.etl-rechtsanwaelte.de/aktuelles/mietrechtsanpass...

Re: Berlin approves 5-year rent freeze

#322

Post by masterofpuppets »

zanny wrote: post #292
jordanbeiber wrote: post #221

Earlier quoted context omitted.

It’s an interesting catch 22. The housing you make margins off are expensive housing in expensive locations. The reason to keep rents affordable is that it’s generally a good thing in terms of keeping gentrificarion and segregation in check. Cap on rent can’t be the only policy though. I see the exact same situation in Stockholm, and there’s a concensus that profit margins are not good enough. How to solve it? Either…

The solution is pretty basic and was proven to work for centuries before extreme zoning intervention by governments happened at the behest of property owners wanting their gentrification. To fund the program you institute luxury property taxes on units larger than what you want your average citizen to afford and actually property tax businesses (which many cities do not do, because they bribed companies to locate the…

This all relies on central planning by the city to implement?

Re: Berlin approves 5-year rent freeze

#323

Post by baron816 »

CPLX wrote: post #144
baron816 wrote: post #129

Earlier quoted context omitted.

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.

So cities should be walled off gardens that don’t let new people fair access the opportunities to be had within?

Re: Berlin approves 5-year rent freeze

#324

Post by icebraining »

JanSt wrote: post #100
tmalsburg2 wrote: post #6

Earlier quoted context omitted.

Nope. New buildings are exempt.

Would you use your savings to build property in a city with policies like this? How long will new property be exempt? 5 years? What then? Nearly no one will build anything anymore.

This is essentially a tax. People still buy and sell things that have taxes levied on them. Yes, too big a tax could spell very real trouble (I've seen it happen in my city), but as long as rents are allowed to rise with inflation, construction should remain profitable.

Re: Berlin approves 5-year rent freeze

#325

Post by TremendousJudge »

jimmaswell wrote: post #309
zanny wrote: post #269

Earlier quoted context omitted.

Pretty much every western nation has systemically failed to recognize or support the insanely high demand for high density living in the 21st century. That is where the future of economics is, where the future of humanity in general pretty much is, and every democracy is consistently demonstrating the total inability for legislatures to sacrifice the advantage of those lucky enough to inhabit cities as they exist now…

I don't buy any of this. Growing up everyone around me saw the city as somewhere you begrudgingly went out of necessity and only lived there if you had no choice, and I'm inclined to agree. In virtually every aspect I find more countryside-ish living much more pleasant. Consider virtual reality and remote work. I imagine much of the workforce will move to virtual offices in the near to medium-far future when corporat…

>Growing up everyone around me saw the city as somewhere you begrudgingly went out of necessity and only lived there if you had no choice

I assume you grew up in the United States?

Re: Berlin approves 5-year rent freeze

#326

Post by blub »

Roritharr wrote: post #317
blub wrote: post #298

Earlier quoted context omitted.

What do you call the chicanery that companies like Vonovia are doing except evil speculation? Yes, heavy demand with slower increasing supply will result in higher prices, but we're talking about homes here, not iPhones. People can't afford a home any more, it's inhuman to just let them be bled dry or get kicked out in the name of real-estate profit. Your critique's puzzling especially because this law only applies t…

>What do you call the chicanery that companies like Vonovia are doing except evil speculation? What these companies are doing is despicable, but how do you imagine this rent-freeze will change their behavior? They will go looking for their margins via other means if the market is the way it is right now. >Your critique's puzzling especially because this law only applies to existing buildings Do you really think that…

1. It will take away one of the ways they abuse people. Who knows, if they keep it up, maybe they'll be expropriated next :)

2. Investors touching the Berlin real estate market right now are anyways demanding exorbitant rates just because they can. Normally, this would at some point reach an equilibrium, but so far it's going up and up with no end in sight, pricing out most people.

And I bet not all of them will scurry away. Any economic measure will not have a perfect effect, there will always be those that break ranks.

Re: Berlin approves 5-year rent freeze

#327

Post by 6cd6beb »

deanCommie wrote: post #316
2T1Qka0rEiPr wrote: post #22

As much as I can sympathise with the predicament, this decision, and the Berlin housing market in general, absolutely baffles me. When I moved here I was warned of 100 people turning up to a flat viewing, and laughed it off as some hyperbole. Only later did I find out that it actually happens , albeit the maximum viewing I went to was around a meagre 50. Having come from the UK, I found the situation in Berlin to be…

[flagged]

>A successful society is not just a rampant pursuit of economics and profits at the expense of everything else.

Right, but people are incentivized by the profit motive and generally do what they can to meet it.

To just say "think of the people" is swimming upstream; you're more likely to succeed by finding a way to modify the system to drive people towards actions that benefit each other.

Unfortunately it is not very human to forgo money, power, fame in exchange for what they think is the right thing to do. That's why we've had to create economic or political systems that saddle the drive for those things and steer it towards things that benefit society.

Re: Berlin approves 5-year rent freeze

#328

Post by baxtr »

2T1Qka0rEiPr wrote: post #22

As much as I can sympathise with the predicament, this decision, and the Berlin housing market in general, absolutely baffles me. When I moved here I was warned of 100 people turning up to a flat viewing, and laughed it off as some hyperbole. Only later did I find out that it actually happens , albeit the maximum viewing I went to was around a meagre 50. Having come from the UK, I found the situation in Berlin to be…

I am not sure if building houses is the solution. Wealthy people from around the globe will still buy them to rent them out for a profit or let them just sit there empty to visit for 2 weeks a year. There is even a name for that effect, it is called "induced demand".

See: https://en.wikipedia.org/wiki/Induced_demand

Re: Berlin approves 5-year rent freeze

#330

Post by DiogenesKynikos »

vtail wrote: post #125
johnnyfaehell wrote: post #92

Earlier quoted context omitted.

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…

People buying apartments to rent out via Airbnb is not inherently a bad thing - it just indicates there is existing unsatisfied demand for short term rentals, which cannot be fulfilled by hotel industry. And guess what - hotel industry is another example of an industry heavily regulated by government (zoning laws, construction permits etc.). So the Airbnb problem most likely has the same underlying root cause.

AirBnB allows housing stock that would otherwise be inhabited by long-term residents to be reappropriated for tourism and business travelers. That puts local residents in direct competition with tourists/businesspeople for housing, and predictably increases the price of housing for long-term residents.

By regulating the hotel industry and restricting the supply of short-term housing, local governments favor long-term residents over visitors. AirBnB is great for travelers, but long-term residents pay the price.

> it just indicates there is existing unsatisfied demand for short term rentals

Yes, but allowing the market to satisfy that demand is not necessarily a good idea. This isn't a case where the unrestrained market will solve all problems. It will solve a problem for travelers, but create problems for long-term residents.

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