Rent controls have split housing in Berlin into two distinct markets • Hacker News Board

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

#331

Post by renewiltord » Tue, Mar 02, 2021, 10:18 PM UTC

edbob wrote: post #313

Schiendelman wrote: post #253

Earlier quoted context omitted.

For the most part, our high housing prices are purely a matter of supply and demand. If you own a piece of land, and you want to build housing, you're not allowed to build as much as you want. NEARLY EVERY building proposed builds to the maximum currently allowed on that land. The market wants to supply more housing. We don't let it, based on laws that originally were created to keep black people out of neighborhoods…

> The market wants to supply more housing. We don't let it, based on laws that originally were created to keep black people out of neighborhoods. Those laws continue to be very effective at that goal. Why does this continue to be such a problem in deep blue areas?

Go on, mate. I think we both know why that's the case. Poor people and rich people make poor neighbours for each other. Maybe you can afford the house, but you can't afford the car, the motorcycle, the road bike that costs more than your annual daycare.

That is a pleasant breeding ground for justification for crime.

So there's the anti-poor angle that rich deep-blue neighbourhoods take and that ends up being racially discriminatory because of the underlying demographics.

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

#332

Post by nullserver » Tue, Mar 02, 2021, 10:19 PM UTC

JPKab wrote: post #322

el_nahual wrote: post #152

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…

There is plenty of scientific denialism on the right. Along with anti nuclear, the belief that rent control is a remotely good idea is an example of scientific denialism on the left. There are some decent arguments to be made against nuclear but rent control has always always caused more harm than good everywhere it's been tried.

Parents city decided to rent control all the mobile home parks. They changed there mind after thousands of people received eviction notices.

Owners would rather let the land sit empty then deal with the nightmare it would create.

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

#333

Post by slavik81 » Tue, Mar 02, 2021, 10:20 PM UTC

latchkey wrote: post #316

e40 wrote: post #289

Earlier quoted context omitted.

I experienced exactly this in the early 1980's. In Berkeley, CA. Apartments were scarce because of rent control. I had a coworker that lived in his apartment from late 70's until late 90's. He paid less than $300/mo. It was great for him. He saved a ton of money and bought a house in Berkeley in the late 90's. But, as a student I had to live in Oakland and was never able to find an apartment. Every time I went to loo…

Around 1994/5 I wanted to move to Berkeley. I had a very hard time finding a place. I looked at so many attics turned into bedrooms and other crappy places. Eventually, I found an ideal (relatively) place and there was a good 50+ people looking at the same apartment during a showing... I walked up to the landlord (who was a lawyer in his day job) and said... "I know you can't pick favorites, but I have a good salary…

If there was no rent control, why didn't he just raise the price up to market value when your lease came up for renewal?

I live in a city without rent control, and your experience is entirely foreign to me. Heck, my current landlord has offered to pay for things that I don't think are even really his responsibility. He's just happy to have good tenants paying market rate.

Switching tenants will probably cost a few thousand dollars in lost rent, and it won't earn him any more income, so he treats us well.

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

#334

Post by koolba » Tue, Mar 02, 2021, 10:20 PM UTC

vitno wrote: post #327

JPKab wrote: post #322

Earlier quoted context omitted.

There is plenty of scientific denialism on the right. Along with anti nuclear, the belief that rent control is a remotely good idea is an example of scientific denialism on the left. There are some decent arguments to be made against nuclear but rent control has always always caused more harm than good everywhere it's been tried.

calling this "scientific denialism" seems like a huge stretch to me. It's not a science, it's housing policy.

It's a policy that is intended, or at least marketed, to lower the price of housing in the interests of the general public. The science denial aspect is refusing to look at every single instance of these policies leading to negative outcomes, some sooner than others.

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

#335

Post by Robotbeat » Tue, Mar 02, 2021, 10:25 PM UTC

asdff wrote: post #274

el_nahual wrote: post #152

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…

If people could move en masse out of cramped expensive rent controlled housing in manhattan, they would. Moving requires upfront capital that a lot of people don't have. Banning rent control doesn't move these working people into more space in some suburb on the outskirts of town, it moves them into a tent under an overpass.

Right. Rent control has created a situation where people are stuck in cramped apartments and no one has incentive to fix the problem. And there aren’t any easy outs. Just have to relentlessly attack the housing supply crunch until rent control isn’t needed.

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

#336

Post by iav » Tue, Mar 02, 2021, 10:28 PM UTC

briffle wrote: post #160

In Oregon, they passed a statewide rent control. They pointed out repeatedly at how rent had gone up 30% over five years. The solution, is that now landlords can only increase rent 7% (plus inflation) per year. This year, its something like 9%. Apparently, someone forgot to figure out what >7% per year for 5 years is..... Its 40%, before the inflation numbers are added in.

Those policies often work through gradual tightening, rather than a sudden change. So it might start with a 7% + CPI cap, then a few years later they'll change it to 5%, then remove the CPI, and so on. Sometimes the cap is allowed to be changed by a simple committee vote or determined by a "Rent Board," which is easier than passing a new law. That way the initial law can get passed without too much opposition.

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

#337

Post by ProfessorLayton » Tue, Mar 02, 2021, 10:33 PM UTC

sudosysgen wrote: post #291

ProfessorLayton wrote: post #132

Earlier quoted context omitted.

>Secondly, studies have shown that 10% increases in supply lead to 1% decreases in price, more or less. Source? This also hand waves the fact that a 1% decrease is still great in the face of say, a 4% increase , totaling a 5% spread — even more if factoring in inflation. Sounds like increasing supply is still one of the best ways to keep prices in check.

I don't have the time to dig up the study, but it already factored in inflation. Even with a 5% spread, to hold off real rent increases for ten years, you'd need to increase housing by 116%. Which is completely unrealistic. This rent control policy had the same effect as reversing 12 years of rent increases, which would require you to multiply supply by 2.5 over those twelve years. Needless to say, this is not possib…

The affordability crisis many cities are facing are not caused by the fact that rent increases exist, it's that they're increasing faster than wage increases.

One does not need to hold off rent increases for an arbitrary amount of time, they just have to stay inline with wages to remain affordable. With that in mind, it is certainly not impossible to build enough to keep up with job/wage growth.

I agree that no single policy can fix everything, but the current status quo of pitting the haves (rent control) vs. have-nots (newcomers/movers) is not working.

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

#338

Post by ink_13 » Tue, Mar 02, 2021, 10:34 PM UTC

callmeal wrote: post #242

jdxcode wrote: post #195

Earlier quoted context omitted.

"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.

Indeed, every apartment in Mountain View is rent controlled by municipal ordinance. But it only applies to increases on existing tenancies; when someone moves out, the landlord can charge whatever they want to the new tenants.

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

#339

Post by csomar » Tue, Mar 02, 2021, 10:40 PM UTC

> If the judges nix the legislation, lots of tenants in the formerly regulated sector could get hit by huge and even retroactive increases in their rents.

Am I reading this correctly? So, these tenants might find themselves in thousands (maybe dozen of thousands) of euros of debt to their landlord. And I assume they'll be required to pay it up overnight? In this case, the politicians really screwed these "poor" people in the most unimaginable way.

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

#340

Post by rsj_hn » Tue, Mar 02, 2021, 10:40 PM UTC

thesuitonym wrote: post #280

908B64B197 wrote: post #248

Earlier quoted context omitted.

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 ups…

I don't know how it is in Germany, but in the US, rent controlled buildings can only have the rent increased if the landlord upgrades the building, so it actually incentivizes them to do upgrades, as that's the only way they can increase rent.

It does not, in fact incentivize upgrades. Because the landlords wait until the tenant moves out, then they can raise the rent to the (high) market rate and that is when they make improvements. Rent control is widely acknowledged to lead to a lower quality housing stock as maintenance and upgrades are deferred.

The provision for some capital offset for improvements is not, in practice, sufficient justification for making the improvements as the offset is only partial, and you want to encourage the long term tenant to move out so you are not going to provide upgrades to the unit.