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Berlin approves 5-year rent freeze

reuters.com

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Re: Berlin approves 5-year rent freeze

#581

Post by thirdsun »

majewsky wrote: post #561
thirdsun wrote: post #528

Earlier quoted context omitted.

> But if anything it matters more, since every minute spent idle (e.g. travelling to meet someone) has a higher associated cost due to the opportunity cost of lost productivity. Which sounds like another vote for remote work instead of clumping and clustering. Why care about proximity and the time it takes to travel when everyone you'd want to meet, regardless of location, is a message, call or video conference away…

Speaking as a German, a big part of why this decentralization isn't happening is that Germany's internet infrastructure is a fucking joke. I'm sometimes even having trouble with getting consistent 3G coverage in large city centers. When driving around the countryside, it's frequently 2G or no service at all. And it's looking similarly bad for broadband internet access in homes. My parents don't have any broadband ser…

As a fellow german, I'm aware. In fact I'm living in a quiet, rural place about 45 minutes from a very large city. My only broadband option is LTE, which thankfully has very good coverage here (steady 50 Mbit) and features an unlimited plan (Telekom Magenta Hybrid), but up until a few years ago everyone around here was limited to 1 Mbit DSL.

Of course the problem goes deeper than raw infrastructure - the mindset for a digital life isn't there yet. This appleis to businesses and particularly to official government bodies. Think about your interactions with the government, simple errands like renewing your ID or registering your car - there are awfully complicated and outdated processes everywhere. I've said it before but I look with envy to competent, easy to navigate portals like https://www.gov.uk/.

Re: Berlin approves 5-year rent freeze

#582

Post by andy_ppp »

ido wrote: post #243
codedokode wrote: post #231

Earlier quoted context omitted.

I doubt that. In old cities like Berlin the best places are in the center because everything is there and there is good public transport access. And new houses are probably built somewhere in suburbs where there is no good transport, no subway, no train stations, nothing except for houses.

have you ever been to berlin? plenty of new construction in central areas. either by razzing older, lower-rise, buildings or by filling in unbuilt or blighted areas (fewer of those as time goes on but there were vast areas where the walls & no-mans zones used to occupy).

Berlin is a weird city isn’t it; when I was there Mitte really wasn’t great because of the wall and there being effectively a West and East German centre to the city or rather it felt like every region had its own charm say.

Re: Berlin approves 5-year rent freeze

#583

Post by dorgo »

majewsky wrote: post #562
v7p1Qbt1im wrote: post #536

Earlier quoted context omitted.

I was living in Berlin in 2015/2016 and believe me in no way at all are people coming here begrudgingly. Pretty much everyone between 20 and 35 wants to live here. And I can't blame them. I wanted to go and I still love the city to bits. There is nothing you can't to there. Tons of very interesting people to collaborate on projects with. Extremely good food and cultural attractions. Pretty much the most progressive p…

> Pretty much everyone between 20 and 35 wants to live here. Well, since you were in Berlin, that's probably survivorship bias. I live in Dresden, a city of 500k inhabitants about 200km south of Berlin. To me, Dresden is just the right size. Not as vast as Berlin, where it can easily take over one hour to get to the other side for a meetup, but still large enough to have enough interesting stuff going on in it.

> that's probably survivorship bias.

What? Is every other Berliner dead and can't tell their story?

Re: Berlin approves 5-year rent freeze

#584

Post by anoncake »

gwright wrote: post #577
anoncake wrote: post #519

Earlier quoted context omitted.

That's how you get an overbuilt construction industry and (even more) unemployed construction workers during the next recession. The "free" market is adequate for allocating resources to consumer goods but not for allocating them to entire industries.

I gather you are asserting that real estate developers are incapable of determining when they are too late to the party and are constructing extra space that will never be occupied. Presumably you also believe that government bureaucrats are somehow better able to ascertain exactly when to stop issuing building permits so as to avoid "overbuilt" construction. And of course they will know when to resume issuing buildi…

> Presumably you also believe that government bureaucrats are somehow better able to ascertain exactly when to stop issuing building permits so as to avoid "overbuilt" construction.

Strawman. That is not the question here.

Re: Berlin approves 5-year rent freeze

#585

Post by majewsky »

dorgo wrote: post #583
majewsky wrote: post #562

Earlier quoted context omitted.

> Pretty much everyone between 20 and 35 wants to live here. Well, since you were in Berlin, that's probably survivorship bias. I live in Dresden, a city of 500k inhabitants about 200km south of Berlin. To me, Dresden is just the right size. Not as vast as Berlin, where it can easily take over one hour to get to the other side for a meetup, but still large enough to have enough interesting stuff going on in it.

> that's probably survivorship bias. What? Is every other Berliner dead and can't tell their story?

Survivorship bias can apply to things other than literal survivors.

What I mean is that, since they're in Berlin, they're mostly interacting with other people who live in Berlin. They're not going to hear from people who don't want to live in Berlin, even if those exist.

Re: Berlin approves 5-year rent freeze

#586

Post by pizza234 »

alisonatwork wrote: post #485
jimmaswell wrote: post #482

Earlier quoted context omitted.

Most people including me don't mind having to drive places, but there actually are a lot of places where you can walk to businesses if you live there. I'd rather have a more private house surrounded by forest on all sides. You don't need a bikeshare if you have space to store your own bike. Teenagers can get a license at 16, ride bikes around, walk around, use skateboards, lots of options, but I don't see the big dea…

I have lived and traveled a lot outside of the city, in North America, Australia and Europe. Trust me when I say the vast majority of rural areas do not have public transport that is remotely comparable to what people enjoy in large cities. I am talking buses, trains, bikes, scooters, all available within a few minutes to take you anywhere you want to go. There is a whole expanse of North America - notably west of th…

> Billions of people around the world do not want that lifestyle. They do not want to own a car. They do not want to own a bicycle. They do not want to own a house [...] they want it 5 minutes walk from their front door. [...]

You're assuming that essentially the entire world ("billions of people around the world") thinks as you do, just because you think so.

I've lived in cities of different sizes (magnitudes of 10⁴ to 10⁶), and those who don't want any personal mean of transport, not even a bike ("They do not want to own a car. They do not want to own a bicycle."), are a tiny minority.

I guess you must be in your 20s/early 30s, since something that actually happens IRL is that when people start to have children, instead of moving to more dense locations, which are more convient according to the theory you expose, move to more sparse locations (towards the suburbs), which actually require a personal mean of transport (of course, this is part of a variety of reasons).

Re: Berlin approves 5-year rent freeze

#587

Post by xg15 »

candybar wrote: post #557
tarsinge wrote: post #484

Earlier quoted context omitted.

Because the root cause is not always high demand, it’s also speculation. Real Estate is now cool again (just look at investing forums or subreddits), and foreign investor money is flowing. Look for example at Portland (OR) how the rent increase correlates with the population increase. The current urban hype alone can not explain these numbers. Also another example since a few years a lot of high earning people in Par…

This doesn't make any sense - real estate speculation would increase the purchase price of real estate but cannot directly impact rental rates. Speculation means people are bidding up prices for real estate beyond what's supportable by current demand, based on expected future demand. This generally doesn't make sense in the rental market - as a tenant, you're not entitled to benefit from any future increase in demand…

> This doesn't make any sense - real estate speculation would increase the purchase price of real estate but cannot directly impact rental rates.

Not an expert, but seems to me they could indirectly, by reducing supply of rentable apartments:

Consider district X with n rentable apartments located in m buildings.

Now some buildings get vacated and are kept empty by speculators.

The apartments from those houses are not anymore available for rent, however, the demand for rentable apartments stays the same - therefore landlords of the remaining apartments now have leeway to raise rent without being punished by the market.

Re: Berlin approves 5-year rent freeze

#588

Post by mantas »

mixmastamyk wrote: post #502
objektif wrote: post #461

Earlier quoted context omitted.

It actually is, otherwise you would have seen Manhattan skyline reach the end of earth but it does not. Premium condos demand such high prices that developers dont have incentive to over supply the market.

The housing shortage is real, discussion of niche exceptions is not a great use of time.

The problem is that there's no economic incentive to solve that shortage. Numbers just don't add up.

Existing city residents wouldn't be that happy if their municipality started building shitload of public buildings using their tax money. Those money would be redirected from other issues that are important to current inhabitants, their real estate value would plummet and they get much densier city that comes with all the associated problems. On top of that, cheap rents would make the city more interesting for more people. So rents would start raising again and we're at step #1... But with more crowded public services.

Re: Berlin approves 5-year rent freeze

#589

Post by mixmastamyk »

mantas wrote: post #588
mixmastamyk wrote: post #502

Earlier quoted context omitted.

The housing shortage is real, discussion of niche exceptions is not a great use of time.

The problem is that there's no economic incentive to solve that shortage. Numbers just don't add up. Existing city residents wouldn't be that happy if their municipality started building shitload of public buildings using their tax money. Those money would be redirected from other issues that are important to current inhabitants, their real estate value would plummet and they get much densier city that comes with all…

Doesn't need to be public investment, there are incentives for some but not others, and yes the situation is complicated.

Re: Berlin approves 5-year rent freeze

#590

Post by candybar »

xg15 wrote: post #587
candybar wrote: post #557

Earlier quoted context omitted.

This doesn't make any sense - real estate speculation would increase the purchase price of real estate but cannot directly impact rental rates. Speculation means people are bidding up prices for real estate beyond what's supportable by current demand, based on expected future demand. This generally doesn't make sense in the rental market - as a tenant, you're not entitled to benefit from any future increase in demand…

> This doesn't make any sense - real estate speculation would increase the purchase price of real estate but cannot directly impact rental rates. Not an expert, but seems to me they could indirectly, by reducing supply of rentable apartments: Consider district X with n rentable apartments located in m buildings. Now some buildings get vacated and are kept empty by speculators. The apartments from those houses are not…

This doesn't have much to do with speculation - the decision to rent or not is something that every owner can make and the economics of the decision don't depend on whether your investment was based on price speculation.

Generally speaking, wherever you have a strong rental market, vacancy is low - it doesn't make sense to keep units vacant in a strong rental market. Speculators aren't some magical creatures to whom normal rules don't apply - real estate speculators are merely investors who believe that prices will move in their favor in the future. That doesn't mean they are any more incentivized to forego rental income, which generally is a large component of the return on any real estate investment.

Edit: I'll add that if you go by classical economics, you'd predict rent to go down if price speculation is excessive, since builders respond to real estate price and if price is sufficiently above cost of construction, this leads to construction of more units, which increases supply and depresses rent.

My general understanding is that this doesn't necessarily work that way because the fundamental factors behind what makes a location attractive don't change - within reason, if you build more, in the long run, you just become a larger, denser version of what you were, which just attracts more people.

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