451–460 of 594 posts
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> 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.
And it screws over anyone who wasn’t lucky enough to win that lottery.
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…
Prices aren't just arbitrary numbers attributed to goods. They convey information. Information that cannot be captured by any one group alone. That's the point of prices.
Freezing rents will create a lot of unintended consequences, as price controls normally do. I imagine that apartments would be poorly maintained as landlords won't need to attract new tenants. Many people will illegally sublet their homes and capture market rents. Landlords will be suspicious and begin treating their tenants with contempt. Investment in building real estate will reduce considerably. The city would be less vibrant and it will be harder to attract young talent or new businesses.
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 p…
That's a pretty weird statement to make.
Do you really believe that everyone (or even a majority) of people who currently rent are in a position to buy a place to live if they wanted to?
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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.
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This has been tried before in a number of different flavors. Most leave people worse off. https://www.bloomberg.com/opinion/articles/2018-01-18/yup-re...
I'm a bit confused, this article seems to only look in depth at rent control in San Francisco? San Francisco and any city in California is a major anomaly compared to other cities in the world. For example, rent control in Montreal works fairly well for renters and has kept the city affordable for the middle class while residential construction still booms.
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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…
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…
While I agree that we have an unsolved problem here, isn't a city's government mainly responsible to do good by the people who inhabit that city and make up its electorate? That's how western democracies work, so no surprises there.
I know of many people all over the world who would like to move to the US and still the 'insanely high demand' has not been supported.
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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.
Why, exactly? Does the person who runs the city with the highest per capita tax receipts get some sort of award? I assume his/her rent would get driven up with the rest.
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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 re…
If you artificially depress the price of a commodity, you induce a scarcity. Apartments are slightly less liquid than say apples, but the principle still stands. It should express itself in demand outstripping supply. If supply and demand were in equilibrium, there would be no point in rent control.
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It is at least clearly like that with roads (see Wikipedia link). With housing I can imagine a similar effect.
So why not actually destroy roads and housing then? Won't that make things better?
Without that a solution is difficult to find. Just to give you an example: one major trend is that people live by themselves. Is that a core driver? Another is that there are huge amounts of capital flowing in buying properties. Another could be the that people’s expectations how sqm per household person have increased dramatically. Yet another is that with 1 mio refugees entering the country in 2015/16 the pressure on housing has increased, etc. Is it all of them? Another ones?
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…