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Berlin rent cap overturned by Germany's top court

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Re: Berlin rent cap overturned by Germany's top court

#131

Post by wsc981 »

jurip wrote: post #107
Asmod4n wrote: post #65

Earlier quoted context omitted.

They are building a massive amount of houses, but they are too expensive for the average Berlin citizen.

I don't know the details of the Berlin situation, but as long as someone lives in those new apartments (who would have lived in Berlin anyway), it helps with the housing shortage and prices. Someone moves to the new, most expensive apartment in the city, someone else moves to their now vacant slightly less expensive apartment, etc. At some point in the chain that means there's cheaper housing available. This is a con…

> Someone moves to the new, most expensive apartment in the city, someone else moves to their now vacant slightly less expensive apartment, etc. At some point in the chain that means there's cheaper housing available.

In The Netherlands there are actually quite a few people that don't want to upgrade from cheaper social rent housing to more expensive private rent housing. These people are called "scheefwoners", which to a Dutch person's ears make it sound like it's almost a criminal activity:

> Scheefwonen is a term that is used in the Netherlands for the living of people in a rental home despite their income being too high for that. So the tenants have an income that is too high for their type of home, so that they actually pay too little rent. With a given housing stock, the downside is that there are people who live in a rented house whose rent is high in relation to their income, which is undesirable for the residents themselves and / or socially in connection with the housing allowance. It can also play a role that the rent is low compared to the characteristics of the home. The Key Publication on the Dutch Housing Survey “Living in Unusual Times”, published in April 2013, showed that the number of households in rental homes with a rent below the deregulation threshold and an income higher than € 33,000 in 2009 was approximately 790 thousand.

Of course these people might have pretty good reasons why they prefer to keep living in cheap social housing. Perhaps these people want to save/invest more of their income, perhaps they like their neighbourhood or perhaps private rent housing is just too expensive. Either way, I feel it's wrong to say that these people "pay too little rent based on their income". That almost seems to suggest a certain percentage of income should be spent on rent or mortgage, whether one chooses to or not.

Again, this problem could be easily solved by just building more houses, but this is also very difficult to achieve in The Netherlands, due to ground speculation by municipal governments and a plethora of rules that a builder has to conform to when building new houses. This, combined with an average immigration of around 400-500 migrants a week means that for the next 15 years or so I don't believe this problem will be fixed, maybe not even in 30 years, unless some major policy changes are introduced. This situation is good for rent-seekers though, they will be able to ask a premium for a very long time.

Source: https://translate.google.com/translate?sl=nl&tl=en&u=https:/...

Re: Berlin rent cap overturned by Germany's top court

#132

Post by est31 »

DangerousPie wrote: post #95
est31 wrote: post #8

Full text of the court decision (German): https://www.bundesverfassungsgericht.de/SharedDocs/Entscheid... Shorter press release (German, too): https://www.bundesverfassungsgericht.de/SharedDocs/Pressemit... It's a classical application of the "federal law breaks state law" rule, which I think exists in the united states as well.

You mean "federal law trumps state law"?

Yes. That's probably the analogous name from the english language sphere. In German, the rule is named "Bundesrecht bricht Landesrecht". I made a more direct translation to make it more similar to the original German name. https://de.wikipedia.org/wiki/Bundesrecht_bricht_Landesrecht

The phrase "Bundesrecht bricht Landesrecht" is even part of the German constitution, as Article 31.

Re: Berlin rent cap overturned by Germany's top court

#133

Post by stareatgoats »

kuu wrote: post #74
durnygbur wrote: post #17

Housing situation in Germany for anyone born after 1980 is so fucked.

Housing situation in Germany is so fucked Housing situation in London is so fucked Housing situation in Spain is so fucked Housing situation in Canada is so fucked .... I'm not an expert, but I see a pattern there...

Sweden too. Not an expert either, but isn't the privatization of housing all over the industrialized world at the root of this, coupled with the currently ubiquitous need to crowd together in the cities? People have been able to buy properties in the city centers at fantasy prices, because of low interests and favorable mortgage arrangements and with the expectation that the prices will go on rising forever.

Which - spoiler ahead - they won't. Cities will within a decade or two have lost their luminosity, with the giant shift towards remote work that is about to take place, in parallel with the wiping out of brick-and-mortar businesses. Prices will reflect this, sooner or later.

Re: Berlin rent cap overturned by Germany's top court

#134

Post by kokey »

adrianN wrote: post #11

I wish Berlin would just build more housing instead. For example when I cross the street there is a supermarket. It's a single story building with a huge parking lot around it. Why not make it a multistory building with apartments on top of the supermarket and skip the parking space or put it underground? Why does the city give out building permits for such buildings? There could easily be room for thirty families on…

How things have changed. I remember going to Berlin around 15 years ago and was surprised how cheap the property was there. At the time it was a city where the population wasn't growing for a very long time, but had good infrastructure and more supply and demand especially to the East. Large apartments in established neighbourhoods were the norm. There was also not much in the way of jobs going for working in tech, or else I would probably have moved there as soon as I landed an opportunity to do so. The tech jobs and the young talent found each other there and the rest is history and this spike in demand keeps luring in more property speculators. It's a difficult situation to fix, the real fix here is a policy to increase housing supply dramatically. Unfortunately the financial incentives against this is very strong, because a critical mass of people have an interest in even higher prices. Putting controls on the trade of existing properties (e.g. making mortgages less accessible) or taxing landlords higher results in a shortage of rental properties and makes the prices rise even further. Rent control to try curb this leads to further shortages.

Re: Berlin rent cap overturned by Germany's top court

#135

Post by truckerbill »

dna_polymerase wrote: post #99
jonathanstrange wrote: post #78

This is a catastrophe and very disappointing. Here is a little personal anecdote: I used to live in the center of Berlin Mitte when I was a student, had rented a Penthouse apartment for 450 Euro/mo incl. additional costs (but without water, gas, electricity). It was affordable. Then a Bavarian multimillionaire bought the house from the original owners. I was already abroad most of the time, so I didn't experience the…

So, the bavarian investor who upgraded his property is the bad guy here? While you spend your time abroad, blocking an apartment in Berlin's city center? Sure, low rents from decades ago are nice, but there has to be an equilibrium. Houses depreciate and if the rent is too low there won't be any money left to pay for upkeep. Unless of course, the bavarian millionaire has to take a loss and pay for that out of his own…

The op would have sublet presumably at the previous lower rate.

Re: Berlin rent cap overturned by Germany's top court

#136

Post by avh02 »

cbmuser wrote: post #21
ceilingcorner wrote: post #14

Earlier quoted context omitted.

Irrelevant unless compared to local salaries, which as far as I know, are still lower than the rest of German cities.

Berlin has less than 1% of empty rental apartments which is extremely low. This means that the rents do actually reflect the real market. And there is simply no right for a cheap apartment in the center of Berlin.

technically, yes.

but the reality is that the population is changing. I've only been here a few years but basically everybody who's been here longer says "it's not what it used to be" in that the vibe of the city has changed greatly with it's increasing attractiveness to foreign (tech?) workers.

The "original" inhabitants of the city are priced out in "favour" of expats. The "real market" itself is obviously both combined, but one segment can afford the higher prices, and there's an ever increasing number in that segment that is shifting it for everyone.

Obviously I see that I'm ironically part of the problem.

Re: Berlin rent cap overturned by Germany's top court

#137

Post by durnygbur »

f6v wrote: post #126

Berlin is a weird place. If you're an art student working as a barista, I don't think you can expect to live in a hip neighbourhood. Certainly not 15 minutes away from Alexanderplatz(city centre). And you certainly can't expect that if the city is a self-proclaimed "startup capital", with thousands of tech workers who enjoy 80k+ salaries.

> 80k+ salaries.

Last time I intensively job searched in Berlin there was a clear salary ceiling at 70-75k EUR annually for software roles.

Re: Berlin rent cap overturned by Germany's top court

#138

Post by turbinerneiter »

mattmanser wrote: post #106
tonyjstark wrote: post #59

Earlier quoted context omitted.

Same here. The city itself should build as many cheap rental apartments as possible, also in more higher-priced areas to keep the pricing there in check. Building more housing is the only way out of this soaring pricing. EDIT: not only rental apartments of course but more housing in general. A second step would be, to make sure that rental housing is used for that instead of AirBNB or any other investment. It would a…

So here in the UK, our councils used to build social housing. 300,000 per year. And then Thatcher made it illegal and said privately owned housing associations would fill the gap. In the 30 years since then, the most they've ever managed is 30,000. It's not in private landowner's interest to build cheap social housing. It reduces rents, it suppresses property values. So they don't get built. If they do build anything…

I know of some related things going on here:

* Typically in Germany, social housing is built with a time-limit built in: after X years, the house falls out of the social housing program and can be rented and sold freely. At the moment, a lot more houses leave the system then are added.

* Many cities sold their real estate after the financial crisis to give the money to the failing banks. I.e. Berlin is super-broke, in parts because of a big banking scandal of the previous government.

* In Munich they have a pretty decent system: anyone who develops land had to keep to a certain split of social housing, middle income housing and free market housing. They use the land they own and their powers over zoning to enforce that.

Re: Berlin rent cap overturned by Germany's top court

#139

Post by southerntofu »

inglor_cz wrote: post #49
mschuster91 wrote: post #39

Earlier quoted context omitted.

> I wish Berlin would just build more housing instead. The problem is: Berlin can't . There is not much free space for new construction in Berlin proper, with the exception of "Nachverdichtung" such as you propose with apartments over parking lots - and these have the downside that they are horribly expensive, simply because it costs potential developers a lot of money to acquire the land! The solution would be to bu…

Has Berlin built over all its brownfields? If so, very commendable. Here in Prague we have quite a few brownfields that could be home to at least 50 thousand people (Rohanský ostrov, Bubny, Kolbenova), but the development is extremely slow.

> Has Berlin built over all its brownfields? If so, very commendable.

Well having some undeveloped space is actually quite nice to enjoy in a city. We don't have to live packed narrowly on top of one another.

But more specifically, brownfields (previously-industrial spaces) are usually highly polluted. Some are full of heavy metals and chemicals that you really don't want to displace into the air by digging into the soil... Some people are doing it, but it either costs billions of euros in depollution, or greatly affects the health of nearby population, and often both.

Re: Berlin rent cap overturned by Germany's top court

#140

Post by jdasdf »

southerntofu wrote: post #121
dgellow wrote: post #62

Earlier quoted context omitted.

The amount of unused space is Berlin is just so massive. Even in Friedrichstraße, which is a hype neighborhood with great amount of activity, you have hundreds of square meters completely unused, with wild plants growing around and random waste accumulating. From what I understand it is very difficult to do something with that space, either because people refuse to sell or because of bureaucratic red tape.

> The amount of unused space is Berlin is just so massive. What's wrong with that? Enjoy the little green space you have left while it lasts. Have a BBQ with friends over there, maybe? The gentrifiers/developers won't be so long to remove every last bit of green and freedom in your neighborhood, as they did everywhere else.

>What's wrong with that?

...The high housing prices.

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