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Berlin approves 5-year rent freeze

reuters.com

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Re: Berlin approves 5-year rent freeze

#331

Post by jordanbeiber »

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…

Thank you for such a thorough reply and your perspective.

Can you name a capital city that have a non dysfunctional system in place?

I seem to remember reading about Wienna having an interesting model in play.

Re: Berlin approves 5-year rent freeze

#332

Post by 0xffff2 »

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…

>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 corporations finally come around to realizing they don't have to waste so much money on rent. There's no need for programmers, graphic designers, reporters, and employees of lots of other professions to work in a physical office. So really, as cities become less of a necessity to certain jobs, I expect a moderate exodus to nicer areas, halting growth or even decreasing population in urban centers.

People have been saying this for decades. Personally, I'd like nothing more than for it to be true so that I can ditch my expensive Silicon Valley apartment. But it's not. Lately I've even been seeing a lot of pushback from people who feel more productive in an office setting and don't want to work remotely.

Re: Berlin approves 5-year rent freeze

#333

Post by icebraining »

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]

While I don't necessarily disagree with rent controls, portraying this measure as people vs corps is simplistic. As long as the city relies on private investors to build new residences, lower investment also means the PEOPLE who could have lived in Berlin are left out.

(The measure is also typically bourgeois; it throws some crumbs to fix the outcry so the capitalist system can remain in place)

Re: Berlin approves 5-year rent freeze

#335

Post by Roritharr »

blub wrote: post #326
Roritharr wrote: post #317

Earlier quoted context omitted.

>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 scur…

So you hope for expropriation and irrationally behaving financial investors.

I wanted to say I have a bridge to sell to you, but you already got the Airport... it just hurts that I'm paying for the punchline.

Re: Berlin approves 5-year rent freeze

#336

Post by seunosewa »

gwright wrote: post #288
odiroot wrote: post #270

Earlier quoted context omitted.

> I found the situation in Berlin to be absolutely ridiculous. I totally agree with this assessment. I've never seen a city where you struggle to get a flat even if you have the money or can pay more. The market is absolutely broken with literally everyone competing for the same pool of flats.

This is a terse comment with not a lot of context, but I think it is misleading to say the "market is broken" as it suggests that the market mechanism is at fault but in reading these comments it sounds like the government regulations are the source of the problem.

A market can be broken through the actions of private actors too. Monopolies and other anti-competitive organizations, criminals, poorly educated market participants, externalities not properly accounted for, etc can “break” a market. In this case a large number of voters seem to believe that rents should not increase even if demand vastly outstrips supply, forcing the government to create short-sighted policies to try to appease them.

Re: Berlin approves 5-year rent freeze

#337

Post by seunosewa »

baxtr wrote: post #328
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

I feel that the problem is that too many people want to live in Berlin, the solution is for a large fraction of those people to choose to live elsewhere, and the rising rents would have been a good way to achieve that outcome.

Re: Berlin approves 5-year rent freeze

#338

Post by cwperkins »

I will eagerly wait to see how this unfolds. Count me in the skeptical camp though.

From an outside perspective it looks like the Overton window in Berlin is skewed heavily because of the runaway prices. I remember just last month the huge protests against Deutsche Wohnen and people demanding the nationalization of apartments. It’s no stranger in New York City that the most inattentive landlord that had the hardest time getting things done is NYCHA, the city agency. I’m skeptical of this solution, but the alternative was scarier.

Re: Berlin approves 5-year rent freeze

#339

Post by briandear »

max_hoffmann wrote: post #249
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…

Freezing rents is not meant to be a solution for a lack of housing. It’s a solution to the explosive increase of rents of existing ones. There are lots of people where the rents of their current apartment have increased so much, that they had to move out. This solution is trying to fix that. Also freezing rents doesn’t mean Berlin will stop building new houses. If there is big demand for housing in a city one needs b…

They are necessarily connected. Supply and demand is connected. If rents are frozen, that lowers housing liquidity (because people won’t move if their rent stays “affordable,”) which reduces supply and necessarily creates a shortage. It lowers mobility as well since there is a shortage of available housing which leads to inefficiency— if someone moves to another job in another part of the city, that person would be less likely to be able to move. Then, there’s added stress on transit since people must commute less optimally.

On the issue of new housing, who would risk capital to build new housing when their returns would be subject to the whims of rent caps? What’s the incentive to improve existing housing when the revenue for doing so is limited? Basically, what’s the point of making non-legally required improvements if you can’t raise rent to cover those expenses. That’s going to result in a decline of housing quality over time.

Unless the government is also going to reduce taxes and expenses and inflation for property owners to help offset the lack of revenue growth? Property owner expenses are going down are they? That lack of revenue growth also means less future capital to build more housing.

Rent control benefits a specific group, but ends up costing the whole far more than it saves the few. It’s popular to “protect” the visible because they are visible and typically sympathetic figures. But there is a greater harm being effected that is less noticed because the face of that effect is the “greedy” property owner, but the invisible victim is the overall public.

Re: Berlin approves 5-year rent freeze

#340

Post by xg15 »

hikarudo wrote: post #303
BowBun wrote: post #280

Earlier quoted context omitted.

I don't know, there's something utopian about what you describe. If the city doesn't have housing for everyone, why should the rich get it first? Leave capitalism at the door, we're talking about a roof over your head for janitors vs. business executives. If an 'ideal' free market means the rich get the houses and the poor are on the street, because developers don't have motivation to build, then I'm happy to see eve…

The opposite of: "only the rich can get a house" is not "everyone gets a fair chance of getting a house", but "not even the rich can get a house". Think of two families that want to get the same house, both having about the same wealth, but one is desperate to get the house and therefore willing to pay more, say because of health problems, while the second family can wait for another property. You lose a lot when you…

By that logic, there would be no way at all for the poor to get a house.
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