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Rent controls have split housing in Berlin into two distinct markets

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

#451

Post by refurb »

rsj_hn wrote: post #439
refurb wrote: post #415

Earlier quoted context omitted.

Ellis Act is different than Owner Move-In (which covers family members too). Ellis Act, named after the law, was created as the govt can’t compel you to rent - you have the right to remove your home from the rental market. ” The Ellis Act (California Government Code Chapter 12.75)[1] is a 1985 California state law that allows landlords to evict residential tenants to "go out of the rental business" in spite of desire…

You are correct! I mixed up the Owner movein and Ellis. Thanks. https://andysirkin.com/tenancy-in-common-tic/san-francisco-r...

The only reason I know is because I thought the same thing! The rent control laws in CA are an absolute rabbit hole you can go down if you have the time!

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

#452

Post by CydeWeys »

freyir wrote: post #423
Xylakant wrote: post #312

Earlier quoted context omitted.

A counterexample is Vienna, which utilizes a well balanced system of rent-control and social housing to have incredibly low rents and still a stable supply of flats. One tweak they apply is that rent-control does not apply to new developments, so creating new flats is more lucrative than turning old buildings into luxury developments. The city also acts as a competitor, driving prices down by offering cheap flats. Th…

San Francisco also applies rent control only to older buildings. The effect is that developers only build top-of-market “luxury” housing (often cheaply constructed it rented at luxury rates). This helps them recover their development costs, which they couldn’t recoup on affordable housing.

How are you defining "luxury" here? The land in SF is inherently expensive; any newly constructed apartment building is likely to have rents meeting your definition of "luxury". The land is expensive and so too is building buildings on top of it! The granite countertops and stainless steel appliances are a tiny fraction of the overall cost.

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

#453

Post by ProfessorLayton »

sudosysgen wrote: post #371
ProfessorLayton wrote: post #337

Earlier quoted context omitted.

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 sing…

https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us... The average hourly US wage has not increased or barely so. Therefore, the inflation adjustment done above corrects for it. If you want rent increases to stay in line with wages, they will need to be held off entirely.

Nobody was talking about nationwide averages, because the housing crunch is local, not an average of what's going on throughout the country.

Wages in [U.S.] metropolitan areas have increased much more than what was referenced in your source [1], while housing in many of those areas has not kept up with that growth.

Just look at the wage growth at top metros, many of which have grown a lot recently, but have failed to increase housing supply to correspond with that growth.

Affordability crisis in these metros are the result of restrictive zoning policies that greatly restrict supply. The ones holding the bag are those that need to move, or had the unfortunate timing of being born more recently and are stuck paying recent market rates.

Rent control adds even more fuel to the fire by artificially constraining supply even further through reduced liquidity. People will stay longer than they otherwise would in their rent controlled unit because moving to a new one means paying market-rate on a different unit.

This is playing out similarly in Berlin.

[1] https://www.garnereconomics.com/images/reports/Metro_and_Non...

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

#454

Post by refurb »

austhrow743 wrote: post #441
freyir wrote: post #423

Earlier quoted context omitted.

San Francisco also applies rent control only to older buildings. The effect is that developers only build top-of-market “luxury” housing (often cheaply constructed it rented at luxury rates). This helps them recover their development costs, which they couldn’t recoup on affordable housing.

I don’t understand how those things impacts each other. Are you saying that if old buildings didn’t have rent control then developers would build less profit maximising buildings?

If you only have 15 years of free pricing, then build the housing with the highest short term margins possible.

If you have free pricing in perpetuity, then you can build housing that might have a lower margin near term but an overall high NPV over its lifetime.

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

#455

Post by CydeWeys »

filoleg wrote: post #426
jtbayly wrote: post #424

Earlier quoted context omitted.

In other words, it was still rent controlled.

Yes, but only until the current tenant leaves. Which gave that landlord all the incentives to make the current tenant leave, as evident by the half-assed repairs and other slumlord-like behaviors that the parent comment mentioned.

Yeah, so it actively incentivizes neglecting maintenance duties and driving out the current tenants rather than offering them to renew their lease at the market rate. Sounds like a terrible law.

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

#456

Post by heterodoxxed »

zamfi wrote: post #444
heterodoxxed wrote: post #434

Earlier quoted context omitted.

| I take a very SFBA perspective here I don't know how useful an SFBA perspective is, given that area is dealing with factors that very, very few other places in America are: Namely, an historic single industry boom and a lack of expansion area. The only real comparable place in America is Manhattan.

Yeah, you're right that there are a number of SFBA-specific factors that don't apply elsewhere. But people aren't really making the rent control argument about Peoria, IL. Any place that caps both rents and housing supply through policy amid increasing demand (like Berlin, the titular locale), is going to have a ton of politics around rent control, density caps, etc., because they are choosing to allocate scarce reso…

| people aren't really making the rent control argument about Peoria, IL.

We are more than you think. Rising rents due to speculation or just plain landlord greed have become an issue country-wide. Even in places like Peoria. Especially in relation to stagnant wages.

I advocate a combination of strong rent control, aggressively subsidized housing and consistent growth (especially vertically) where possible.

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

#457

Post by CydeWeys »

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 economics, which is sort of a science.

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

#458

Post by mandelbrotwurst »

readams wrote: post #448
foota wrote: post #403

Earlier quoted context omitted.

Rent control, when coupled with other means of ensuring housing is built for those that can afford it, is a reasonable way of ensuring housing for those that can't afford it at the market price. That is, globally applying a cap on rents would be a bad idea, since there would be no incentive to build new housing. However, when coupled with restrictions such as requiring only some fraction of new housing construction t…

Below market rate housing is, by definition, always in short supply.

This isn’t true if the government generates more via subsidies.

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

#459

Post by Red_Leaves_Flyy »

exporectomy wrote: post #432
foota wrote: post #403

Earlier quoted context omitted.

Rent control, when coupled with other means of ensuring housing is built for those that can afford it, is a reasonable way of ensuring housing for those that can't afford it at the market price. That is, globally applying a cap on rents would be a bad idea, since there would be no incentive to build new housing. However, when coupled with restrictions such as requiring only some fraction of new housing construction t…

> Imo we should just solve this issue once and for all by supplying government housing to anyone at a low price, but there seems to be little political will for that. Where would that end? If you always build more to accommodate any poor or homeless people, they'll come from other cities to enjoy the cheap housing.

This is a national problem requiring a federal solution. Anything less will be exploited by desperate people. Don't hate the poor players. Hate the rich exploiting them for profit.

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

#460

Post by dahart »

huitzitziltzin wrote: post #179
dahart wrote: 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-…

> [edit: note here that most of the US has banned rent control, and this is happening regardless] Where do you get that idea? It is false. New York? San Francisco? California has statewide rent control as of January 1 of last year. Many of the places where people want to move still do have rent control. Rent control is not a live issue in, e.g., Tulsa, OK or Amarillo, TX, whether it is legal or not. > “Neighborhoods…

> Where do you get that idea? It is false.

From Wikipedia

"As of 2019, five states (California, New York, New Jersey, Maryland, Oregon) and the District of Columbia have localities in which some form of residential rent control is in effect (for normal structures, excluding mobile homes). Thirty-seven states either prohibit or preempt rent control, while eight states allow their cities to enact rent control, but have no cities that have implemented it."

https://en.wikipedia.org/wiki/Rent_control_in_the_United_Sta...

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