Earlier quoted context omitted.
why did landlords take their units off the market in berlin? because renting out is no longer interesting?
Because a law called "Mietpreisbremse" makes it entirely unattractive to rent out. That's a strict regulation on how much rent you are allowed to take. And that's just the direct financial aspect. Once a tenant lives in your place, it's really hard to get rid of them. Even if they act like total scumbags, trash the place, disturb the neighbors, pay their rent late. No reasonable investor finds it attractive to build…
First of all: the problem at the core is that Berlin is pretty much built out, there is not much space any more to expand to. Yes, skyscrapers could be a solution, but everyone seriously thinking about this gets invited to look at Frankfurt am Main and then forget about the idea because that city is simply hideous. Skyscrapers are very unwelcome in Germany because of that example, not to mention they need some seriously solid ground to make a proper foundation... and Berlin doesn't have that.
Second: that law was enacted because people were fed up with rents going up all the time - including absolutely ridiculous practices like "kalte Entmietung" (aka having construction crews in allll the time to drive out tenants) or charging ridiculous prices and raising rents while the property devolves ever more because the profits from the raised rents are clearly being siphoned off instead of being used to keep up maintenance.
Third: People were especially pissed off about the large landlords (Vonovia etc.) which bought their stock at fire-sale prices (literally - the 90s CDU government under Diepgen had left a veritable banking scandal and the Senate was forced to sell everything it had in the early 2000s for cheap) and now raised rent like there was no tomorrow. It was naked and utter greed that turned the public opinion so bad.
> Once a tenant lives in your place, it's really hard to get rid of them. Even if they act like total scumbags, trash the place, disturb the neighbors, pay their rent late.
Paying rent persistently late is grounds for termination, it's easy to grab an eviction order at a court. Disturbing neighbors... well let's keep it at "having illegal hotels aka AirBnBs as neighbors is way worse".
> No reasonable investor finds it attractive to build new rentals in German cities. Result is a shortage.
People build like mad wherever they still can and that is the problem. Land values in urban areas exploded - Munich for example had land values double in four years [1] - and the result is that because the land is so expensive, the resulting rental price are going to be exorbitantly expensive as well.
In the end the solution is not the market, as the market will over time only serve to evict the weakest of society - and as a result, as we have seen in Berlin and with the Yellow Vests in France, this has the potential to erode trust in democracy itself.
The solution is to revitalize the rural areas. Public transit and high-speed Internet access are the key points where the suburban and rural areas across the West have the worst issues - fix that and people will actively move towards these areas instead of all being forced to compete for urban quarters!
[1] https://www.sueddeutsche.de/muenchen/muenchen-grundstueckspr...