Live data from Hacker News

Rent controls have split housing in Berlin into two distinct markets

bloomberg.com

241–250 of 724 posts

Re: Rent controls have split housing in Berlin into two distinct markets

#241

Earlier quoted context omitted.

not just in 10 or 20 years, more like in 9 months! The supreme court will probably rule that the Mietendeckel is unconstitutional in November, which will lead to a nasty situation for many renters with old contracts. If the tenants are lucky the landlord will just ask for the money "saved" to be paid back, but the unlucky ones will be evicted, as being in arrears of more than one month is grounds for termination rega…

It's extremely unlikely that the court will strike down the law in a way that this situation arises. It's not like everybody starts to pretend that a law has never existed if it's ruled unconstitutional. Usually arrangements will be made for those that relied on it. Especially in a case like this, where another basic right is affected. (It's two months btw)

perhaps, but if MietenWoG is struck down that leaves only the BGB.

yes you're right, two months not one.

Re: Rent controls have split housing in Berlin into two distinct markets

#242

Earlier quoted context omitted.

Giving people "incentive to move" – aka forcing them out of their homes – doesn't increase supply. Unless they're "moving" onto the streets in which case you did free up a flat.

"I'd like to move out of my rent-controlled apartment in SF because my job is in Mountain View, but I don't want to walk away from this rate."

You would be able to if apartments in Mountain View were also rent-controlled.

Re: Rent controls have split housing in Berlin into two distinct markets

#243
post #46

I think this article is getting the interpretation of the facts all wrong. They point to the predictable drop in supply in the regulated market as if it was a bad thing, but they ignore where that supply is coming from. Those are not newly-built apartments, because the price controls don't apply for new construction. When an old apartment becomes available, it's because the previous occupant moved out, e.g. because t…

The thing I'm curious about is the impact of rent controls on traffic and commute times. This is a big deadweight loss of rent control, I think - people will often move because where they work changed, so if person A gets a job in person B's neighborhood and vice versa, the efficient outcome is for them to swap apartments rather than have opposite commutes. Rent control effectively locks people into their current apartment, which means some combination of longer commutes and taking worse jobs in lieu of an excessive commute that cannot be ameliorated by moving.

Re: Rent controls have split housing in Berlin into two distinct markets

#244
post #56

Earlier quoted context omitted.

Why? That argument doesn’t address the fact that many cities have an absolute limit on supply in the form of space, and no amount of construction that starts today will bring prices down today. Here are some arguments to refute if you want to oppose rent control, particularly the first one (copied and pasted directly from investopedia): “Rental prices in many U.S. cities are rising far faster than wages for moderate-…

Berlin has 4,227 inhabitants/km², Hong Kong (widely considered to be a very livable city, and also one with hard geographic constraints on expansion) has 6,300. So we have existence proof that Berlin, if it chose to, could support an increase in housing of 50% or so, which would certainly drive rents way down. Edit: Not sure why I looked so far away, Paris is at 21,000. Like virtually every housing story, this is an…

> Berlin has 4,227 inhabitants/km² [...] Paris is at 21,000.

These numbers aren't comparable: The municipality of Paris is just the small urban core of a much larger metropolitan region. Berlin has about 3.7 million inhabitants on 890 square kilometers, Paris 2.2 million on 105 square kilometers.

A fairer comparison is with the Petite Couronne consisting of Paris + the innermost ring of its neighbors (https://en.wikipedia.org/wiki/%C3%8Ele-de-France#Petite_Cour...), which has 6.7 million people on 760 square kilometers. Still denser than Berlin! But the ratio is far less extreme than you made it look. For an alternative approach, take Berlin's densest districts: Friedrichshain-Kreuzberg, Mitte, and Neukölln add up to about 100 square kilometers (like Paris) and a bit over a million people. So about 2x less dense than Paris rather than 5x.

Re: Rent controls have split housing in Berlin into two distinct markets

#245

Earlier quoted context omitted.

not just in 10 or 20 years, more like in 9 months! The supreme court will probably rule that the Mietendeckel is unconstitutional in November, which will lead to a nasty situation for many renters with old contracts. If the tenants are lucky the landlord will just ask for the money "saved" to be paid back, but the unlucky ones will be evicted, as being in arrears of more than one month is grounds for termination rega…

The tenants are not in arrears. In the common case rents were lowered officially by landlords, with a footnote that the difference is due in full if the law is striked down.

Nope!

The rental amount agreed in the contract is to be owed by the tenant, this is not changed by the MietenWoG.

https://ikb-law.blog/2020/11/19/resume-zum-mietendeckel/

Re: Rent controls have split housing in Berlin into two distinct markets

#246
post #182

Earlier quoted context omitted.

Germany is a federal system, Berlin is one of the (city-)states within it. https://en.m.wikipedia.org/wiki/States_of_Germany

It's not like this is a hard border. It's completely feasible to live outside its limits. Sure, that's not technically Berlin but for all purposes regarding the housing market it is.

Not quite. If I understand right (as a recent-ish migrant to Germany, I expect to have half an understanding at best), different states have laws and slightly different taxes. Not as much so as American states, but perhaps more like Newark vs. NYC than Cupertino vs. Sunnyvale.

Re: Rent controls have split housing in Berlin into two distinct markets

#247

Earlier quoted context omitted.

> aka forcing them out of their homes They aren't theirs. They're renters.

"Your home" means the place where you live. It's not the same as "your house", which is a building that you own. Evicting a renter is kicking someone out of their home.

“Your” here is like with a chain - as strong as a weakest link in the chain. Creating your home in someone else’s property doesn’t really make it yours overall.

Re: Rent controls have split housing in Berlin into two distinct markets

#248

An issue that many commenters here are missing is that the problem with rent control will manifest more sharply in the future. Sure, the impact today seems relatively equitable: a windfall for people that rent today coupled with a small drop in supply. But fast forward 10 or 20 years and the situation looks far worse: everyone who got a windfall today is still living in the same apartment, whereas anyone trying to en…

The beauty of it is it doesn't matter to the bureaucrats: since the 19 years old can't live in the city he also can't vote in the municipal elections!

It also has bad impact on the type of buildings that get built. If you have to build some rent-controlled housing as part of your development project, and some jurisdictions will force developers to do that, it pushes you to build the rest of your building to be as upscale as possible to attract higher paying customers (better margins).

And it also removes the incentives of ever upgrading the rent-controlled buildings more than the minimal legal maintenance. Because any dollar is better spent on the upscale offerings.

Re: Rent controls have split housing in Berlin into two distinct markets

#249
post #151

Earlier quoted context omitted.

But you are buying an asset instead of just paying rent.

That's the point. People are forced concentrating their wealth into a single asset.

Which can be good or bad.

If land prices are increasing faster than inflation it is bad unless they can get out before the bubble pops. Obviously if they bought too high that is a bad investment. Lets ignore this and assume a sane market where values mostly are similar to inflation.

While property increases with inflation are not nearly as good an investment as investments that do better than inflation, it isn't as bad as it sounds. The whole point of buying property in this case is a place to live. So in 30 years you no longer have a rent payment at all, and in between your rent never goes up. This payment situation needs to be factored in to the calculation since you will be living someplace no matter what. (unless you would normally live in a cardboard box) As a result people who invest in property to live in need to invest a much smaller portion of their total portfolio into something else. And since this is a place to live it doesn't matter how well it performs overall since you are not selling (at least not until you go to a nursing home which you can/should insure for).

Let me point out that rent doesn't increase when you own property. So if you invest just the difference between market rent and your rent over the years you will have more money to invest. Now that money doesn't have as long to grow (since it isn't front loaded as much), but owning is still a good part of a long term portfolio.

Note that the above makes some assumptions that may not be true, or that could be true but you don't want to for lifestyle reasons. That is perfectly fine - there is no one size fits all. Every situation is different, you need to make your own decisions as best you can. The first assumption above is you live there for the rest of your life (some amount of trading is allowed, but be careful as each trade is costly), the second is you pay off the dwelling.

Re: Rent controls have split housing in Berlin into two distinct markets

#250
post #182

Earlier quoted context omitted.

Germany is a federal system, Berlin is one of the (city-)states within it. https://en.m.wikipedia.org/wiki/States_of_Germany

okay, so it can't grow out. looking at pictures of the city, it certainly looks like it has room to grow up.

Up is expensive, from what I hear.
Post reply on HN