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

#581

Post by skohan » Wed, Mar 03, 2021, 7:13 AM UTC

selectodude wrote: post #526

skohan wrote: post #516

Earlier quoted context omitted.

First of all, it's Vienna, not Venice. And you don't need a counterfactual Vienna to compare it to cities of similar size and economic characteristics. > the best they could do would be to get rid of the (actually quite small) cut that landlords take for themselves Again, I think this claim is easily contradicted by the success of Vienna's housing market. The thing is, if you took the market as it is today, and the g…

>If you treat housing as a public good, you make decisions to keep rent prices stable, and you build more housing to serve the need rather than the profit motive. This argument strikes me as the tail wagging the dog. Vienna has no motive to limit housing since they build such an enormous percentage of it. If rents go up because the government of Vienna doesn't build enough housing, they will be removed from office. P…

So would you advocate that there be no zoning/building regulations? The article you linked has a slightly misleading title; it would be more accurate to say: "with today's zoning laws, 40% of the buildings in Manhattan would have been replaced by slightly smaller buildings which allow more light to reach the street." I already find Manhattan overly dense, and I can imagine those regulations were put in place for good reason.

In Berlin, we have had laws on the books forever which prevent tall buildings and excess density, and I'm glad because if developers had their way, they would build high-rises where all the parks currently are, and this would not be a city I would want to live in.

In general I'm not a fan of over-regulation or excess government intervention, but when it comes to housing, I think it does make more sense to treat it as a public good. Government is not perfect, but people should have some voice in how their community develops, and this will not be the case if housing development is left only to private interests.

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

#582

Post by ivan1783 » Wed, Mar 03, 2021, 7:14 AM UTC

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…

Really? I just looked on immowelt and the prices are higher than here where I live (Stuttgart, DE) which is already incredibly high.

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

#583

Post by cycomanic » Wed, Mar 03, 2021, 7:14 AM UTC

kelnos wrote: post #517

CydeWeys wrote: post #455

Earlier quoted context omitted.

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.

That's the downside of rent control. Rent ends up being stable and predictable for tenants, but it reduces the landlord's incentive to fix thing when they break and to make improvements (though many rent control laws, including SF's, still allow landlords to pass some of the cost of capital improvements to renters). Even when rent control continues to be active, landlords have an incentive to want to get their tenant…

That that has anything to do with rent control is an absolute myth. Two counter examples are Sydney and Melbourne, both don't have rent control, Australia has big incentives for investing in housing (tax reductions if you don't live in the house). Both cities have seen an explosion of rents (10% year on year is not uncommon) and a building boom of cheap apartments that are only rented out via Airbnb. I can tell from experience that landlords do the absolute minimum they are legally required (mostly even less) and tenants are afraid to complain because they need the references when moving.

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

#584

Post by kelnos » Wed, Mar 03, 2021, 7:15 AM UTC

kmeisthax wrote: post #566

stale2002 wrote: post #473

Earlier quoted context omitted.

> you can't do #2 without doing #1 Of course you can. The law can be that normally rent control applies, but if you are building a new building, that doubles the amount of housing supply on the land, you can kick out the existing residents if you pay them a large payout. This would allow new housing to built in the obvious places where it should be, and the obvious cases where a huge amount of new housing is planned…

I'd actually totally love to see this proposed in more left-leaning city councils. This is sort of the idea I've had in my head for how to short-circuit the left-NIMBY trap, but I have no idea how good or bad it would actually be at moving the needle in favor of growth. Part of the problem I could see right off the bat would be the fact that owners and occupants are inherently antagonized to one another; as in, the m…

Another idea might be to require that the developer first offer to rent a unit in the new building to all the old tenants, at their old rent, if they want to move back after construction is complete. A side-effect is that this doesn't encourage the developer to build something nicer than what was already there. But in some cases that might actually be a good thing.

But yeah, these sorts of things generally reduce the amount of money available to do the new development in the first place. But maybe that's ok too?

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

#585

Post by kelnos » Wed, Mar 03, 2021, 7:23 AM UTC

jdxcode wrote: post #259

vkou wrote: post #186

Earlier quoted context omitted.

Kicking people out of their homes doesn't solve the supply problem, because it doesn't create new housing. It just shuffles around who lives in existing houses. If you have a housing problem, and you want to solve it, you need to do two things. 1. Not kick people out of housing that they have. (Because it is incredibly disruptive to people's lives.) 2. Build new housing, until demand is met. Rent control accomplishes…

The major flaw in your argument is that you can't do #2 with rent control in the picture. From the economist[0]: > Rent controls are a textbook example of a well-intentioned policy that does not work. They deter the supply of good-quality rental housing. With rents capped, building new homes becomes less profitable. Even maintaining existing properties is discouraged because landlords see no return for their investme…

Well, it depends on how rent control is implemented. In California, units built after February 1995 cannot be placed under rent control[0] (and in SF, it's June 1979[1]). A new development will never be under rent control (unless the law changes; two ballot measures to make some changes have failed in the past few years), so building new homes can still be immensely profitable.

In SF the reason it's not quite as profitable is because of the byzantine planning process and the inevitable lawsuits a developer has to win before even breaking ground. This is part of the reason why nearly all new SF housing construction is fairly high-end and expensive to buy/rent.

[0] https://en.wikipedia.org/wiki/Costa%E2%80%93Hawkins_Rental_H...

[1] https://sftu.org/rent-control/

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

#586

Post by heterodoxxed » Wed, Mar 03, 2021, 7:36 AM UTC

zamfi wrote: post #572

heterodoxxed wrote: post #456

Earlier quoted context omitted.

| 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.

> Rising rents due to speculation or just plain landlord greed Well, you'd need both, not just one: landlord greed has a cap, average rents can't be much more than the cost of buying, though there will always be some folks who don't qualify for a mortgage for whatever reason. The only reason landlords can be greedy is the leverage they have because supply is constrained -- otherwise, their greed would be thwarted by…

That assumes the market is rational and the actors within are rational.

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

#587

Post by perryizgr8 » Wed, Mar 03, 2021, 7:41 AM UTC

tehjoker wrote: post #349

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…

I think you're missing a larger point: why should people be forced to move? There's no natural law that says people should be ceaselessly pushed around by market forces.

> why should people be forced to move?

I am not privy to all the complications involved in this scheme, but how would anybody be forced to move?

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

#588

Post by refurb » Wed, Mar 03, 2021, 7:53 AM UTC

u678u wrote: post #436

csunbird wrote: post #149

Earlier quoted context omitted.

I moved to Berlin two years ago and the finding a house was incredibly exhausting. As the article mentions, there are two categories, rent capped apartments and non rent capped apartments. For the first category, there are 2000+ applicants per day per apartment, making it impossible to actually have a chance to get the apartment. The odds getting that apartment as a foreigner that do not speak German is non existent,…

> stupid amounts of rent for small apartments (1100 - 1200 cold rent for 50sqm Wow that's cheap, London you'd pay double or triple that.

Yeah, that seems like a very affordable rent by US or Canadian standard.

A good 1 bed ~50 sqm in a major city (read - jobs) would run close to $2,000 with a few exceptions.

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

#589

Post by refurb » Wed, Mar 03, 2021, 7:57 AM UTC

sudosysgen wrote: post #375

ska wrote: post #240

Earlier quoted context omitted.

> If they are, then the Vancouver solution is very effective Whatever is going on in Vancouver, it isn't effective (at controlling rent prices)

Whatever was done in Vancouver wasn't done to control rent prices. It was done to control vacant buildings. It was successful at that.

Hint - those two are related. If rental prices go down, you know supply has increase (or demand has decreased).

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

#590

Post by zamfi » Wed, Mar 03, 2021, 8:00 AM UTC

heterodoxxed wrote: post #586

zamfi wrote: post #572

Earlier quoted context omitted.

> Rising rents due to speculation or just plain landlord greed Well, you'd need both, not just one: landlord greed has a cap, average rents can't be much more than the cost of buying, though there will always be some folks who don't qualify for a mortgage for whatever reason. The only reason landlords can be greedy is the leverage they have because supply is constrained -- otherwise, their greed would be thwarted by…

That assumes the market is rational and the actors within are rational.

I guess? But

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

That assumes rational actors in local government, which strikes me as even more fanciful.