591–600 of 724 posts
Yes why build an apartment in Berlin if they will just inevitably move the date for rent controlled buildings forward eventually.
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If rent increases are capped at 7% per year, landlords will have an incentive to increase it at the max, because that gives them more flexibility the next year. For example, let's say the free market would raise rents 5% this year, and 8% next year. A cap of 7% means the rent will rise 7% this year, as the landlord won't want to have caps permanently reduce future rents.
They already had an incentive to increase it at the max, because it's more money in their pocket. For this to be true, they would have to either (1) under present conditions, not be raising the rent to maximize profit or (2) under the scenario, raise the rent past maximum profit Neither of those seem likely to me.
In the presence of a cap this strategy becomes riskier so it forces landlords to think about a shorter term horizon.
There's also a signalling effect of the cap which may mean tenant reactions to an increase at the cap are different.
Earlier quoted context omitted.
You can flip this argument on its head so easily, though: "why should a person be able to keep out others who want the property more, in an arrangement that both the newcomers and the person who has poured their money into the property, solely out of their own selfishness in not wanting to move." When you frame the motivations of individuals with such simplistic motivations as natural market forces being entirely dri…
Real property is a limited resource. We accept that buying a piece of land often doesn't give you the legal right to do literally anything you want with it. You can't open a store on land zoned for residential use, for example. From there it's just a matter of deciding what is and isn't allowed. I happen to be viscerally against the idea that a person's basic need -- a stable home -- should be overridden by another's…
I mean, that's painting with a pretty broad brush. Nobody said anything about legalizing doing anything you want with land. You're never going to have a perfectly stable arrangement when renting someone else's property: I don't own a car or exercise equipment; if Uber or my local gym raise rates, I'll be bummed, but I don't begrudge them for doing it (even if it means I have to move to a less convenient gym.) I have empathy for those Uber drivers and workers at the gym.
I can absolutely empathize with those living through increases in rent, I just happen to believe that the solution to that problem is not to implement policies that make those renters beholden to their current landlords forever (even if their circumstances change and a new home would be more convenient). And just as I have empathy for those renters who want to stay in their homes, I have empathy for those renters who got a new job across town but can't afford to move, because they've lived in the same home for fifteen years and can't afford market rate at a new place.
As far as landlords go, I see no reason why they shouldn't be able to raise the cost of rent to keep up with cost-of-living just like anyone else. My current landlord own a house or two on my block, and they make their living off of the profits they earn by renting and maintaining these houses. Just like I want to get a bump in pay every year, it seems eminently reasonable (and not greedy of them) to grant that to them as well. I have empathy for the landlords who provide me with my home, and provide repairs and maintenance.
If the problem that we're talking about is that people can't afford their homes because the rate that others is willing to pay is higher than they can afford, the solution is not to form isolated bubbles that ignore what's going on in the rest of the market and create indentured renters. Just one of many better solutions would be subsidized rent assistance: give the renters the difference they need to make rent, straight up in cash. If costs in the city have gone up by 10%, that's just evidence of the fact that there's a ton of demand fighting for not enough supply. Artificially restricting supply even further is an unsustainable solution for the city as a whole, and far better solutions already exist for keeping people in their homes.
I guess my big point is that if you boil down a complex issue like this to good people vs. bad people, you're not being honest to the actual issues at hand. To assume that landlords increase rent solely out of greed, or to assume that being okay with rent increases implies a lack of compassion, or to assume that support for policies that lock-in rent are the only empathetic stance to hold don't seem to leave a lot of room for discussion or understanding.
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I'm not sure those are the amenities that would signify a high end apartment; which probably tracks with the dilution of the brand. Those amenities are pretty standard for most corporate housing, (ex. Avalon's 55 9th[1] has those amenities, but doesn't market itself has luxury). Compare that building with the 181 Fremont[2] in SOMA which has a several private lounges, a doorman, a building concierge, and valet parkin…
Maybe we have different opinions of what qualifies as luxury. My example is in a trendy location and above a whole foods. Based on the price (and the units sold quickly) there are no middle or lower class folks living in those apartments/condos. Like zero. Contrast that with the more spartan apartment buildings building 30-40 years ago. Basic construction, laundry in the basement was the main amenity. These were clea…
Rather than contrasting it to living standards 30 years ago, it makes more sense to contrast it with living standards today in real estate markets that aren't insane. A comparable apartment to 38 Dolores, with similar amenities is Chicago's Jeff Jack apartments[1] which has much of the similar amenities at a fraction of the price (~$1,000/mo for 1bd) - still likely targeting yuppies but in a different tier than Chicago's high end offerings. However something like a building in Chicago's Gold Coast (which has pricing of around ~3,500/mo for bd) includes features that are in 181 Fremont - pool, lounges, concierge, dry cleaning and even larger floor plans than you would typically find [2].
Alternatively you could say that a lot of apartments in SF get away with charging luxury prices for what really should be standard fan-fare apartment because demand is so high. The GP mentioned more succinctly, a lot of units in SF are cheaply constructed building that are actually rented at luxury rates.
[1] https://jeffjackapartments.com/building/ [2] https://www.twowestdelaware.com/amenities-and-features/
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…
That's correct and can be observed in Stockholm, for example: > https://www.bbc.com/worklife/article/20160517-this-is-one-ci...
It's not as nice for young people or other newcomers without capital and a couple of decades in the apartment queue. They still have to pay market prices to rent, but have to make do with second or third hand renting where they have no protection and can be forced to move on a very short notice. Meanwhile, the difference in rents is pocketed by someone that is probably using it to pay down a mortgage on their actual home.
Earlier quoted context omitted.
If only the state could heavily tax empty apartments and cap resell price to counter that. But wait, it actually can. Pushing renters and speculators out of the housing markets in favor of people who actually want to settle in the city is probably the best you can do as a municipality.
I must absolutely thank you. I derive personal enjoyment from broken systems and the mass suffering that they produce. Everyone is happy. Isn't that nice?
Earlier quoted context omitted.
On that basis, I’d be interested to see more grand buildings like those on Frankfurter Tor. While the insides of Soviet era buildings are the targets of German jokes [0], the outsides are grand, and they are more than 6 levels high. [0] IIRC “if you come home to find your wife has changed her hair and redecorated, you went into the wrong apartment”, according to the DDR museum. I’m sure it lost something in the trans…
That's interesting that Soviet era buildings there have a reputation for being grand outside. In Prague, buildings built in the Czechoslovak Socialist Republic era have a (well-deserved, IMO) reputation for being brutish, simply, and inelegantly built on the outside, especially as compared to the beautiful buildings from the earlier eras.
[0] DDR? I’m not actually sure who made the decision, now I think about it
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…
Also 10-20y down the line, the incentives to invest into and maintain a rent controlled unit being very small, they will be in a really poor state.
Even without these specific rent controls, most rental contracts have either "staffelmiete" or "indexmiete", that is, fixed points at which the rent will increase or an index against which rent is pegged. There are very strong laws supporting renters.
I live in a somewhat newer apartment, so it's not subject to the discussed changes. My rent increases were agreed with the landlord when we moved in, they are fixed in my contract, and after the built in increases are done, the rent won't go up anymore.
The issue with housing and prices is Berlin is not the same as other places in the world. For years Berlin was an economic wasteland. Just now it's become desirable to live here, and there are jobs and an economy to support it. The rent in Berlin is, despite increasing 5-10% per year every year for the past decade, still less than that in Munich or Hamburg. This isn't a case of a speculative bubble or outlier system, just a historically depressed economy returning to the mean, and fast.
Yes, it's unfortunate, that people cannot afford to live in Berlin as they did in 1996. But Berlin is not the city it was in 1996. To alleviate this price pressure, more housing needs to be built than demanded, and that has not been the case for a long time now; place is limited.
Earlier quoted context omitted.
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.
However, human needs have an expiration date and often cannot wait for the market to make sense.
| That assumes rational actors in local government
No it doesn't, if you can build enough power you can force local governments to enact these kinds of reforms.
All politicians can be pressured if you know where to push.