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Rent controls have split housing in Berlin into two distinct markets

bloomberg.com

611–620 of 724 posts

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

#611

Earlier quoted context omitted.

> we basically displace everyone living in the city eventually to make way for larger buildings that can house more people In theory, this is true. In practicality, at least in America there's enough land with very little density, that a new building could be constructed while displacing basically no one (because the previous occupant of the land is already willing to move, it's just that the new seller isn't allowed…

I almost want to agree with you on the displacement point, but the problem is that building on empty land is how we got Phoenix. The ROI on dense buildings isn't great unless you're closer to the center of an already developed city, and then all the problems with displacement and NIMBYs apply. Also, building out to avoid zoning laws isn't great for the local environment. That being said, displacement almost certainly…

> I almost want to agree with you on the displacement point, but the problem is that building on empty land is how we got Phoenix. The ROI on dense buildings isn't great unless you're closer to the center of an already developed city, and then all the problems with displacement and NIMBYs apply. Also, building out to avoid zoning laws isn't great for the local environment.

I think you misunderstood my point. What I meant is that are many empty/available lots ready for development in the city, which could be redeveloped with minimal to no displacement. The problem is that zoning laws (and in many places like SF, community reviews/objections) prevent building there.

For example, in Sunnyvale, a developer bought a empty mall, so they could redevelop it into housing/offices. However, that project took years to get started because of lawsuits and red tape. In New York City, a proposal to replace a parking lot with 300 units of housing in South Seaport was rejected for not fitting the character of the community. Why worry about displacement if projects without displacement take forever to build, or are not allowed?

More generally, most cities have plenty of neighbourhoods that are currently zoned for single family housing. Increasing density there would lead to minimal displacement, because the density is so low that you'd displace on the order of 10s of people per project, which is not a massive amount to deal with.

And if we redefine displacement as being forced to leave against your will (which I think is what left-NIMBYs and I really care about), you could probably get that number down to 0, because I'm sure there are many owner-occupiers who would be willing to sell their property to a developer and move out; they just can't because zoning law forbids increasing density.

> then implement policies to ameliorate that pain while still promoting density

Many efforts to increase density take this into account, and are designed to minimize displacement. For example, the upzoning bill in CA (SB 50) disallowed rebuilding properties that had renters occupying it for the past 5 years, which means that only owner occupied units would be rebuilt (and thus causing no displacement under the definition I used above).

Eventually, we'll run out of empty lots and owner occupied properties in cities to upzone, at which time, we'll have to decide how to make the hard tradeoffs around displacement. But right now, we're not close to that point, so there's no need to muddle the waters with future concerns. Let's just build.

> Just dismissing left-NIMBYs as crypto-Trumpist won't dismiss their otherwise valid concerns

I think left NIMBYs do have valid concerns, and I don't think they're "crypto-Trumpists". My opinion is that they're just "useful idiots" [0] for existing property owners and landlords, because they don't have a good understanding of land economics and how their proposed policies will interact in the real world, which just leads to homeowners and landlords getting richer at the expense of those without property.

[0] - Sorry for the harsh phrasing. I don't mean this in a super derogatory way, I just can't think of another word for this.

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

#612
post #136

Earlier quoted context omitted.

> you're benefitting at the direct expense of less affluent people who want to move into bigger apartments Aren't you forgetting about the even less affluent people who wouldn't be able to afford a bigger apartment even at the same price per area as their current apartment and who'd be priced out of the market (a.k.a. forced to move out) by rising rents? > and who want to move into your city from outside of it I thin…

"Aren't you forgetting about the even less affluent people who wouldn't be able to afford a bigger apartment even at the same price per area as their current apartment and who'd be priced out of the market (a.k.a. forced to move out) by rising rents?" What? No... the whole point is the answer is supply, not rent control. Supply keeps prices down, rent control pushes prices up (for those units that hit the market, whi…

> the answer is supply, not rent control. Supply keeps prices down

Supply requires construction, which takes time, which limits the speed at which supply can be created. Meanwhile, demand has been growing much faster. So far, supply has not succeeded at keeping prices down, while rent control has.

> rent control pushes prices up (for those units that hit the market, which are the only ones that matter in this case)

First of all, units that hit the market are not the only ones that matter. There are already people living in those apartments who don't want them to hit the market because they'd like to continue living there, thankyouverymuch.

Secondly, the Bloomberg article shows that rent in rent-controlled apartments fell and the price for apartments that are sold, not rented, fell as well. The price increase is concentrated in the unregulated market for new construction, where it at least serves the useful purpose of incentivizing increasing supply, although still not quickly enough.

> Having a lot of supply on the market is what those people need, and rent control is what drives them out.

What? No... their landlords raising the rent to a level they can't afford is what drives them out, and rent control prevents that.

> The reasoning is always to help people who aren't well off financially, not to keep outsiders out of your city.

The reasoning is that poor people shouldn't get evicted from their apartments just because someone else is willing to pay more, and if that limits the ability of some outsiders to move there, that's an acceptable tradeoff. If those outsiders are willing to provide for their own supply by paying for the construction of new housing, they're very much welcome. I wouldn't call that xenophobia.

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

#613
post #345

Earlier quoted context omitted.

And then, of course, California decided to pass Proposition 13 [1] which made sure that owners who got in early also "win" vs more recent buyers. There are owners of identical homes on the same block in San Francisco who pay 10x what their neighbors pay due only to when they bought (and the resultant purchase prices). This is unlike saner places in the country which reassess property values regularly. [1] https://en.…

That’s definitely picking winners and losers, but not inherent to the real estate itself. Just shows that populist polices are not new. EDIT: also, why prop 13 applies to non-residential real estate is another issue.

Even without Prop 13, this problem still applies, and is inherent to real estate.

Buying land is essentially buying a monopoly (since land is in fixed supply), and getting access to its rents for perpetuity. Prop 13 gives you even more of the rents, but in places with Prop 13, property taxes are low enough that most of the rents still go to the landowner.

You can compare land to taxi medallions, and see that all the reasons taxi medallions are bad also apply to land. Allowing indefinite ownership of the rents from a scarce resource essentially gives a slice of the future productivity of the community to those who were lucky to buy early enough.

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

#614

Earlier quoted context omitted.

>"The second category is the overpriced apartments, the "landlords" (mostly the same three evil companies) are asking stupid amounts of rent for small apartments (1100 - 1200 cold rent for 50sqm ??)." Which companies are these? >"The first category are mostly expats, who are being screwed by landlords who do not want to rent to foreigners (especially if you are not from Europa)," Unless I'm reading this incorrectly d…

> Which companies are these? Pretty sure they are talking about Vonovia [0], Degewo [1], Deutsche Wohnen [2]. [0]: https://www.vonovia.de/en [1]: https://www.degewo.de/ [2]: https://www.deutsche-wohnen.com/en/

Don't forget Akelius

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

#615
post #531

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 live in Berlin. What you're describing in "10 or 20 years" is already the case. That's why these actions are being taken now . I waited 6 months for an apartment here when I first moved. Pretty much everyone who doesn't want to spend insane prices on a unit has to. And even then, I'm still paying 500-600 more than I should be. It's insanity. The main problem is that there are immigrants (primarily from one country…

You don't need the slightly racist comment, biggest problem imho is that house ownership is very low in berlin (last time I read about it was around only 15% of people live on their owned houses) and really hard to change that. You have to think that everytime you're looking at buying a place you're competing with Blackrock, Deutsche Wohne and other not so nice funds with much more room for negotiation than you. That's why even if you and your partner makes top 10% salary you're probably not rich enough to own a house.

And on top of that germany has very strict laws about transparency of home ownership so there's no clear way to know the distribution of home ownership or who are the biggest landlords and where they got their money from. Which is bad because there's a lot of shady people buying whole complexes, but it's also working as intended as a lot of politicians are also big landlords.

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

#616
post #463

Earlier quoted context omitted.

The thing is, what's the alternative? I live in Berlin, and my neighbours are in their 70's. Should they be forced to find a new flat way outside the city because the rent triples over the course of a few years so young tech workers relocating from London can have a place in the cool part of town? The rental market is different in Germany than it is in other countries: less people own their homes, and getting a housi…

> Should they be forced to find a new flat way outside the city because the rent triples over the course of a few years so young tech workers relocating from London can have a place in the cool part of town? yes why should they get to stay in berlin and have their housing subsidized?

Competing for housing exclusively on grounds of wealth also doesn't benefit young workers?

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

#617
Indian living in Berlin. Can confirm. Finding a new apartment is almost impossible and the rents on unregulated apartments is now through the roof. An apartment that would cost ~800 EUR for rent is now atleast 1100-1200 (even for a good developer salary, this is insane).

Berlin is the SF of Europe at the moment. Unless you want to spend 6 months at a minimum hunting apartments I would avoid this city.

Once I get comfortable with German, I am thinking of moving to cheaper, smaller cities , probably in the south and working full time remote.

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

#618

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.

Pure lotto to get a rent controlled building. The whole problem with rent control, is there is always a limited supply and you can't use dollars to vote where more supply should be made. Market forces determine where new construction should go cause its profitable to do so. Otherwise you just have to hope you can get a house and if you can't you are out of luck

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

#619
post #602
post #506

Earlier quoted context omitted.

Coal kills thousands of people a year in the US (13,000 if you believe the extreme estimates) Less than 20 people have died in Nuclear related accidents in the history of this technologies use. And almost every single one of those were unrelated to the nuclear technology itself (electrocution, other workplace accidents that could happen in any power plant) If you want to lump in Chernobyl and Fukushima we are still o…

In complex systems accidents do not tell the whole story, one has to also look at incidents and the "safety culture" of the organization (i.e. ~ how they avoid failure and how they react to failure). Aviation for example has The Aviation Herald, where one can see that there's in fact quite many incidents that almost never result in accidents. There's lots of literature on safety engineering in aviation. What's the eq…

I'm not a nuclear engineer, although I have a couple friends that are and have assured me the risk is incredibly low. The scientific literature backs this up.

What annoys me is climate change activists that paint nuclear power as some terrible boogeyman we must never use lest we irradiate the entire United States.

They will never ever "show their work" and do the cost/benefit analysis of the ongoing thousands who die from coal and other carbon energy sources or the potential millions who will die from climate change.

No, no it's all just alarmist BS about nuclear being "dangerous" so let's just not use literally the only power generating technology that can replace almost every single fossil fuel plant in the US. Not even solar and wind can claim that!

So I think it's accurate to describe this view as "anti-science" at least for those who want to abolish the use of nuclear altogether (Green new deal types)

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

#620
post #506

Earlier quoted context omitted.

Coal kills thousands of people a year in the US (13,000 if you believe the extreme estimates) Less than 20 people have died in Nuclear related accidents in the history of this technologies use. And almost every single one of those were unrelated to the nuclear technology itself (electrocution, other workplace accidents that could happen in any power plant) If you want to lump in Chernobyl and Fukushima we are still o…

I am generally in support of nuclear technology but statements like "Less than 20 people have died in Nuclear related accidents in the history of this technologies use" don't help the cause. That's just flat-out false, and you indicate in the following paragraph that you know that. Leaving out the two most significant accidents in the history of the technology shouldn't be the default...

I was clearly talking about in the US.

Literally the previous sentence I was talking about the danger in the US of fossil fuels, then I wrote about the danger of nuclear and then move on to worldwide.

Nothing I wrote was false at all. It's almost like you're intentionally trying to misread my argument to paint me as disingenuous.

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