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Berlin approves 5-year rent freeze

reuters.com

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Re: Berlin approves 5-year rent freeze

#371

Post by jordanbeiber »

luckylion wrote: post #359
wongarsu wrote: post #271

Earlier quoted context omitted.

If the city wants something the market can't provide the solution is to do it yourself. Berlin is partially doing that. The "Wohnungsbaugesellschaft Berlin-Mitte" is a housing association owned by the City of Berlin that builds and rents out apartments. They more or less act like other investors, just with more focus on social factors than on high profits.

> just with more focus on social factors than on high profits Which is basically a political issue, because they will say "some people are more equal than others". Personally, I prefer naked capitalism over this "you need to know somebody in the party to get a good flat"-stuff.

Isn't the black market that occurs a form of naked capitalism?

Here in Stockholm a lot of the public good properties have been sold out which have left precious little for too many to contend.

Prices of labour and land are so expensive that, allegedly, profit margins are not good enough.

The "know somebody" bit goes for plain hard capitalism as well, but is less in effect in a society that actually focus on the social side of things. IMO.

Re: Berlin approves 5-year rent freeze

#372

Post by pantalaimon »

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…

That's odd because it it's pretty much the polar opposite of what I've experienced.

Everyone wants to move to the big cities, especially Berlin, as they provide culture and a sense of freedom. You are able to meet like-minded people and are able to experience culture and infrastructure that simply does not exist in rural areas.

This of course makes makes the situation for the villages worse as many young people move away. Who's left are old people and those who are not qualified to find work or education elsewhere.

The population decline in those regions also means a decline in infrastructure, economy and cultural events, which makes those regions even more unattractive, perpetuating the cycle.

There is a slight trend of dropouts creating alternative living communities in those areas as abandoned houses & property can be had for very cheap. But their isolated nature means that often they will not last as their inhabitants move back to the city were their original peer group is.

Re: Berlin approves 5-year rent freeze

#373

Post by jotm »

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?

Don't go to Eastern Europe, absolutely nothing but wastelands there, no houses, no land, no services. Just don't go. Hehehe

Re: Berlin approves 5-year rent freeze

#374

Post by EliRivers »

jotm wrote: post #362
EliRivers wrote: post #352

Earlier quoted context omitted.

Depends on what you want, I suppose. High density humanity simply makes practical and economically viable gatherings, grouping and other activities that just don't work in low-density populations. Classes, meetups, specialist stores, hobbies, clubs, shows, lectures, institutions and just plain bubbling, embryonic interactions; all of it an order of magnitude more intense in a big city. Travel even fifty miles away fr…

15 miles, 2 hours? Hmmm, maybe invest in New roads. But city living is sad, yeah you can have all the social fun, but none of the quiet, peace, living and hobby space. I like living 10 miles from the city, lots of space, quiet and green, can drive 20 minutes to the shity anytime.

15 miles, 2 hours? Hmmm, maybe invest in New roads.

Maybe invest in new glasses. I didn't say 15.

A city that has a boundary defined enough that you can reasonably say you live ten miles from it, and that you can drive into in 20 minutes? You're thinking of a town.

Re: Berlin approves 5-year rent freeze

#375

Post by acchow »

tomatocracy wrote: post #360
pgeorgi wrote: post #291

Earlier quoted context omitted.

It works reasonably well in the rest of Germany. As for it not working in Berlin, I have a hard time to come up with _anything_ that works there, so my hunch would be that the housing market in Berlin is broken not because of rent control, but because it's Berlin.

It "works" (in that it doesn't cause problems like rationing by other means like queueing, under the table payments, subletting, or any one of the myriad other problems rent control produces) because it actually does nothing - it results in rents which are equal to what the open market price would have been. Ultimately, if you want to reduce rents AND have a functioning market, you have two options (or a combination…

> it actually does nothing - it results in rents which are equal to what the open market price would have been.

Lots of people living in rent-controlled apartments around the world would disagree.

Re: Berlin approves 5-year rent freeze

#376

Post by DiogenesKynikos »

cyrksoft wrote: post #146
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.

Through a high tax on the unimproved value of the land:

https://en.m.wikipedia.org/wiki/Land_value_tax

Re: Berlin approves 5-year rent freeze

#377

Post by seunosewa »

xg15 wrote: post #343
seunosewa wrote: post #337

Earlier quoted context omitted.

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.

Well, in that case, either the rent lock will actually work - or it will increase the difficulty for everyone to get a flat, which essentially would have the same effect of driving people to the outskirts.

The people who can afford to pay higher rents are generally the most productive. They have important skills that employers are willing to pay high salaries for. They also pay more taxes and spend more money. If I ran a city, I would want more of those highly skilled workers in my city.

Re: Berlin approves 5-year rent freeze

#378

Post by evancharles »

air7 wrote: post #367
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…

My take is that from an "economics 101" perspective, a rental isn't a normal commodity. When a vacant rental is first advertised, it is essentially "put on the market" and it's price could be determined by supply and demand in a more or less fair way (assuming "gentrification" is just demand). But signing a lease and renewing it are very different. For the renter, leaving a rental incurs a very real cost (searching f…

I think you underestimate owner costs of turnover. Risking an empty apartment for even a few weeks can erase your yield for the whole year. Landlords, then, are only likely to hike rent aggressively if it's worth that risk, in other words, when the market price is dramatically higher than the current rent rate.

Re: Berlin approves 5-year rent freeze

#379

Post by moate »

lotsofpulp wrote: post #256
wander_homer wrote: post #116

Earlier quoted context omitted.

> But many people want the status without having to pay the $$$ It's not just about the status. Every city needs people who do lower paying jobs. Someone has to clean those office buildings, someone has to take care of sick people at hospitals, someone has to drive taxis, buses, ... By not supplying those people with affordable housing within the city they're lives only become worse (more money and time spent commuti…

The pay for "lower paying jobs" will rise, assuming the city actually needs them.

Right, except they don't. It's higher than rural areas, but that doesn't mean it's in line with the general cost of living in the area.

I promise you, if you go to any major world city there are people living there who are poor and barely scraping by.

Re: Berlin approves 5-year rent freeze

#380

Post by fxleach »

briandear wrote: post #339
max_hoffmann wrote: post #249

Earlier quoted context omitted.

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 l…

I agree with some of your points but I think you're misguided on a couple.

>because people won’t move if their rent stays “affordable,”

This is the issue rent control is trying to solve. There will always be rich people that can afford to live in the city, and they basically raise the bar on what developers and landlords think people can afford. They stay comfy while the rest basically pour all their paycheck into rent, forgo savings, and feel stuck. What about the rest of the people that work in the city with median income (or lower) jobs? They get pushed out further and further from city centres. In turn, that creates enormous strain on public transit and traffic congestion becomes unbearable.

That being said I don't believe rent control is the proper solution, but it's the only one most people agree on right now. I'd like to hear about more solutions if there are any.

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