Berlin approves 5-year rent freeze • Hacker News Board

Re: Berlin approves 5-year rent freeze

#401

Post by cyrksoft » Tue, Jun 18, 2019, 9:30 PM UTC

claudeganon wrote: post #311

codedokode wrote: post #272

Earlier quoted context omitted.

Then it should be skilled, talented workers who should live in a place without public transport, buy expensive cars and gasoline and spend hours in traffic jams?

No. Cities should be invested in and planned to make themselves affordable and accommodating to all of the labor they need to exist, instead of “skilled, talented workers” shoving off all of the misery onto lower wage workers just because they can get away with it. It’s not zero sum. Look at cities in developed countries like Japan, Austria, Singapore, or the less Capitalist parts of Europe.

If you want socialist paradise see Cuba, Venezuela and the rest of Latin America. Come live here and you’ll see how well it works. Government doesn’t have a special power with future vision, nobody does. Let people decide their life, where to live. Move to other places if you want cheap living costs.

Re: Berlin approves 5-year rent freeze

#402

Post by dymk » Tue, Jun 18, 2019, 9:31 PM UTC

SomeOldThrow wrote: post #351

dymk wrote: post #215

Earlier quoted context omitted.

Homelessness is a problem of addiction and mental illness. Cheap highly regulated housing in the middle of expensive cities don't fix that. Social workers and detox programs help, but there is no easy fix (other than "finance their life") for people who can't kick a drug habit, or are mentally incapable of holding down a job.

> Homelessness is a problem of addiction and mental illness. Have you never spent time with homeless people? You are delusional.

I spend time with them every day. Hello from Seattle!

Re: Berlin approves 5-year rent freeze

#403

Post by llampx » Tue, Jun 18, 2019, 9:32 PM UTC

bpfrh wrote: post #305

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…

While it is true, that there are simply not enough apartments the rest of your argument is wrong. In berlin, the rent limits don't work, because of various reasons, one for example is that companies simply rise the costs that are not rent for appartment, force the people living there out and then raise the rent. The rent limit is not the only thing that has to be done but it is a step in the right direction. I always…

> In berlin, the rent limits don't work, because of various reasons, one for example is that companies simply rise the costs that are not rent for appartment, force the people living there out and then raise the rent.

Do you have examples of this happening? Nebenkosten are controlled by the government or the responsible agencies as well, and you get a detailed invoice of any costs so the landlord can't just bill whatever they want.

Re: Berlin approves 5-year rent freeze

#404

Post by toper-centage » Tue, Jun 18, 2019, 9:33 PM UTC

pantalaimon wrote: post #372

jimmaswell wrote: post #309

Earlier quoted context omitted.

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…

Young people want to go to Berlin but people with money want to settle away from it.

Re: Berlin approves 5-year rent freeze

#405

Post by llampx » Tue, Jun 18, 2019, 9:33 PM UTC

nerfhammer wrote: post #397

seunosewa wrote: post #377

Earlier quoted context omitted.

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.

So, you're actually in favor of higher rents. Why not mandate rent increases?

This is silly. Your counter-argument is basically also meddling in the market.

Re: Berlin approves 5-year rent freeze

#406

Post by fzeroracer » Tue, Jun 18, 2019, 9:34 PM UTC

seunosewa wrote: post #337

baxtr wrote: post #328

Earlier quoted context omitted.

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.

That is exactly what happened with San Francisco though. Then those fraction of people in Berlin become entrenched in local politics, prevent any further housing or development and the end result is a city that's nigh-unlivable. Last I checked, SF gets a lot of criticism for that reason.

Re: Berlin approves 5-year rent freeze

#407

Post by nielsole » Tue, Jun 18, 2019, 9:35 PM UTC

username444 wrote: post #246

nielsole wrote: post #167

Earlier quoted context omitted.

The georgist approach. I was pondering a high annual ground tax instead of a capital gains tax

Otherwise known as "property tax". Something neat I've noticed locally is that condos with high property management fees have proportionally lower selling prices. If all 2 bedroom units in an area/city are $3000/month and one building had property management fees of $1000 instead of $500, the unit's value is $500/month lower (approx. $100,000 selling price). I'm not sure how that would be implemented on a city scale…

Yes. But The tax needs to be high enough to capture most of the value not created by the landlord. As I am no property owner I am not too deep into this, but right now I think we are far from that.

Property tax is just now being redone in Germany. Unfortunately it seems that it might end up depending on the square meters of the house, not the underlying property.

Re: Berlin approves 5-year rent freeze

#408

Post by Pyxl101 » Tue, Jun 18, 2019, 9:35 PM UTC

hokus wrote: post #398

Its really simple. We should tax property AND rent to the point where it becomes unprofitable to hoard it for purposes of unproductive wealth extraction. Then change all rent contracts into lease-buy contracts. You would accumulate a good percentage of madly overpriced rentals that no one wants then they go bankrupt one by one. You get those delicious market dynamics we [apparently] crave more than any social convent…

Can you clarify what problem you are trying to solve with this proposal?

No one is obligated to rent a property from someone else. You rent if you believe it's in your interest to rent, instead of buy. Why stop two consenting people from entering into rental agreements, both of whom believe it's in their interest?

Some people prefer to rent: they don't want to be obligated to live somewhere for 10 to 30 years. They prefer to be free of commitments and loans (and/or don't have enough cash to buy). I wanted to live somewhere for a medium period of time (a few years) with no significant commitment or risk, then move on. I had just moved to the city and wasn't sure where I would ultimately want to live long-term. Landlords can also rent properties to people who have far worse credit and far fewer assets than would be required to buy the same property. I was able to rent a property much nicer than I could have afforded to buy at the time, since I had income but little wealth and credit. (The landlord in that case is taking on unsecured risk that I will default on our contract.)

Landlords also provide useful services to their tenants: they are responsible for all upkeep associated with the property. When I rented, I was glad not to have to deal with any of that. Landlord takes care of all the yard, or common spaces in an apartment, and if something breaks I just call the landlord. If you own appliances and real estate yourself, then you are potentially on the hook for significant costs if something breaks. Maybe the refrigerator breaks and you need to buy a new one: the landlord needs to budget or purchase insurance for that, while a renter does not. Landlords also assume liability for their property: if e.g. asbestos is found on the land, they may be responsible for paying for the cleanup.

Property owners are forced to tie up their assets in the real estate. Renters don't have to. Let's say that I have $1 million in cash, and I want to live somewhere. I don't necessarily want to have to invest all of my cash in real estate - not even a down payment on a mortgage. Renting might be a preferable alternative so that I can use my cash for other higher-value investments or to fund a business.

Lastly, landlords assume risk. If they can't find a tenant for their property, then it sits idle and they take a loss. When you own property, you can lose a significant amount of money if the property depreciates, as happened during the last recession. When you're renting, your risk is capped - you owe the rent but that's it.

Renting isn't wealth extraction. Like staying in a hotel, it's commerce, an exchange of money (rent) for services (temporary right to occupy a property). If you want to buy a property from its current owner, instead of renting it from them in a landlord-tenant relationship, then make them an offer, and if you both agree then you can do that instead.

Re: Berlin approves 5-year rent freeze

#409

Post by leereeves » Tue, Jun 18, 2019, 9:36 PM UTC

hokus wrote: post #398

Its really simple. We should tax property AND rent to the point where it becomes unprofitable to hoard it for purposes of unproductive wealth extraction. Then change all rent contracts into lease-buy contracts. You would accumulate a good percentage of madly overpriced rentals that no one wants then they go bankrupt one by one. You get those delicious market dynamics we [apparently] crave more than any social convent…

And who would build new rental properties under those conditions?

Re: Berlin approves 5-year rent freeze

#410

Post by llampx » Tue, Jun 18, 2019, 9:37 PM UTC

walshemj wrote: post #320

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…

There isn't massive sub letting going on then?

I'm not aware of massive subletting going on but in general if you sublet without letting your landlord know about it you risk losing the apartment entirely, and most landlords won't let you sublet for longer than six months. Of course sometimes it does happen. A couple of friends of mine have been in the same sublet for the better part of a year but they're also looking to move to a more stable place. The renter has basically moved out but is keeping the flat around "just in case"