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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

#491

Post by whatshisface »

skohan wrote: post #489
whatshisface wrote: post #476

Earlier quoted context omitted.

Rent control could technically be done by handing money to tennants to then hand to landlords, but in practice it's done by taking money away from landlords. Obviously, that's going to keep landlords from being able to give that money to construction companies. Another possible solution would be to take money away from tenants and landlords both to give directly to construction companies. That's socialized housing. H…

Wouldn't Vienna be an obvious counterexample of your claim?

Which claim, and how?

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

#492

Post by stale2002 »

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 idea that if half of all housing in a city were sitting empty (which is what doubling housing supply means) would only cause prices to decrease by a couple percent is completely ridiculous on its face.

Go look at SF housing prices lately to see how the moderate increase in supply, from people moving out of the city lately, has caused an absolutely huge rent drop of around 30% .

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

#493

Post by kapp_in_life »

davidw wrote: post #165
Kalium wrote: post #128

Earlier quoted context omitted.

The political complication is that it's very easy for people to be convinced that the short-term answer is the only one that will ever be needed. Addressing long-term problems often involves painful choices that people would rather not face.

That's part of it. The "losers" with rent control are newcomers who may have a harder time finding housing, and some landlords. They're kind of anonymous. But turn up to a public hearing on building some new housing, and the people there to yell about it are your neighbors, ordinary people who "got theirs".

The losers also include the children of those benefiting from rent control, just a decade or two in the future.

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

#494

Post by latchkey »

donarb wrote: post #389
latchkey wrote: post #316

Earlier quoted context omitted.

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…

Interesting that it took an essay contest to break the tie. Seattle now has an ordinance that they must rent to the first applicant who qualifies. This is to prevent discrimination against minorities.

Yea, I felt like it was kind of weird at the time, but I was also young and cocky and used my privilege to get the place in a highly competitive market. I don't feel good about that later in life.

In his defense, I don't think he was discriminating against minorities as much as he was just trying to find a good tenant, in a sea of applications, that wouldn't cause him a lot of headache.

One side bit of information is that he had had an accident and had lost part of one arm. He was very apt and that didn't hold him back at all, he was used to challenges.

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

#495

Post by refurb »

shuckles wrote: post #483
refurb wrote: post #454

Earlier quoted context omitted.

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.

I doubt this calculation changes whether a developer chooses $500 or $1000 countertops. New units in San Francisco are not luxury units. Few have luxury amenities like doormen.

Think more along the lines of amenities like pools, exercise rooms rather than more spartan buildings that are literally just basic apartments.

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

#496

Post by jboog »

Xylakant wrote: post #312
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…

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…

This is interesting and we can definitely learn something from the Vienna model but it isn't a super dense city so what works there might not translate as well to other cities.

Manhattan for example is about 7x as dense as Vienna. There just isn't the space for the government to be churning out cheap flats for the amount of people that want to live there.

SF is not nearly as dense and there is absolutely a lot of space to build there but unfortunately the zoning there is an absolute nightmare that doesn't seem to be getting better any time soon.

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

#497

Post by throwaway6734 »

mjevans wrote: post #490
throwaway6734 wrote: post #468

Earlier quoted context omitted.

build more housing

Also minimize middle-persons and standardize the sales and transfer and ownership contacts (preferably at a state or higher level). The goal should be to make it easier and more orderly to transfer property ownership, while also providing protection to those making the sales. The standard contacts should also include enumerations of inspection agencies and what type of inspections were performed (and when), and the v…

Sounds great.

We just refinanced and I couldn't believe how burdensome and slow the process was. I don't understand why I had to talk to a person at all.

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

#498

Post by jboog »

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.

SF also has some of the most ridiculously onerous zoning laws in the country.

A HUGE portion of the city is just giant single family homes or 2-3 story buildings and you are absolutely forbidden from redeveloping them into dense, affordable housing.

Change the zoning laws and developers will gladly build affordable market-rate housing.

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

#499

Post by jboog »

shuckles wrote: post #483
refurb wrote: post #454

Earlier quoted context omitted.

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.

I doubt this calculation changes whether a developer chooses $500 or $1000 countertops. New units in San Francisco are not luxury units. Few have luxury amenities like doormen.

"luxury" is one of the most meaningless and oft misused terms in housing/real estate.

It's not legally defined as anything so any developer can build a shoebox with a bathroom and a murphy bed throw in a nice countertop and call it "luxury".

It's also become a pejorative for ANY market-rate housing in cities by NIMBY anti-development types.

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

#500

Post by Spooky23 »

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…

Manhattan has been unchanged for 100 years. You’re either rich or poor to live there. It’s kinda bizarre that you see the ability of people to live in their home for 20 years as a problem.

Frankly it goes to show the hypocrisy of many of the cheerleaders for higher density housing, pushing for a future where as an individual you get discarded and banished to the hinterlands when your value declines.

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