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Rent controls have split housing in Berlin into two distinct markets

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

#181

Post by nerfhammer »

nonsince wrote: post #113
sokoloff wrote: post #94

Earlier quoted context omitted.

Rationing bread would increase the number of people who have some bread. Regulating the price to a point well below the free market supply/demand driven price causes a decrease in the amount of bread supplied to the market (and probably increase hoarding/decrease the breadth of distribution). Think back to toilet paper shortages last spring. Rationing was arguably the best move (and was what local markets around me d…

Rental properties are inherently rationed by the fact that there is no reason to rent more than one flat in the same city.

I know at least 4 people who lucked out on a rent control unit and have essentially moved away but don't want to give it up, and so keep it as a second residence. Or in other cases, rent it out to someone else at market rates.

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

#182

Post by ben_w »

codeflo wrote: post #127
kuschku wrote: post #101

Earlier quoted context omitted.

The issue is, there's only a limited supply (Berlin can't grow forever), and as result there's already many apartments left empty today to artificially increase the prices of apartments, as they're treated as investments in a bubble, with the intention to profit from increasing value, not from rent. Not regulating the price was tried for 30 years, and led to many families unable to afford housing, or spending 80%+ of…

> Berlin can't grow forever That's not self-evident to me. Why not?

Germany is a federal system, Berlin is one of the (city-)states within it.

https://en.m.wikipedia.org/wiki/States_of_Germany

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

#183

Post by [deleted] »

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…

[deleted]

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

#184

Post by sokoloff »

codeflo wrote: post #172
sokoloff wrote: post #161

Earlier quoted context omitted.

I wasn't trying to "getcha", but I do think this genuinely is a supply chain issue. Consumer form factor toilet paper is still being rationed for me right now (in Cambridge, MA-max 1). That's a year after the start of this.

Very interesting, I guess my experience here in Germany was very different. No toilet paper anywhere for 2-3 weeks last March/April, and then suddenly supermarkets drowned in it. Do you know if these are really meaningful shortages, or if businesses have just kept the signs up to make people feel taken care of?

I don't know for sure, but even with the max-1 purchase limit, the toilet paper section of the aisle is somewhat lightly stocked on some of my visits. (Of course, if you've told me for a year that TP is in short supply, you can bet that I have a lot of it on hand in the basement, so it's hard to get a clean read. "If there's space in the cart and TP on the shelf, why not pick one up? It's $10, never spoils, and never goes out of style.")

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

#185

Post by ChuckNorris89 »

bradleybuda wrote: post #96
dahart wrote: post #56

Earlier quoted context omitted.

Why? That argument doesn’t address the fact that many cities have an absolute limit on supply in the form of space, and no amount of construction that starts today will bring prices down today. Here are some arguments to refute if you want to oppose rent control, particularly the first one (copied and pasted directly from investopedia): “Rental prices in many U.S. cities are rising far faster than wages for moderate-…

Berlin has 4,227 inhabitants/km², Hong Kong (widely considered to be a very livable city, and also one with hard geographic constraints on expansion) has 6,300. So we have existence proof that Berlin, if it chose to, could support an increase in housing of 50% or so, which would certainly drive rents way down. Edit: Not sure why I looked so far away, Paris is at 21,000. Like virtually every housing story, this is an…

>Hong Kong widely considered to be a very livable city

By whom? Ricchie McRich?

Every working class Hong Konger I talked to (even highly skilled ones) said living there is cramped and brutally expensive and would like to emigrate.

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

#186

Post by vkou »

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…

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 #1, proper city planning accomplishes #2. If you're not doing #2, complaining about #1 isn't going to solve the problem.

If you are doing #2, then #1 isn't a problem.

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

#187

Post by inglor_cz »

dahart wrote: post #56
robertlagrant wrote: post #13

> In a food shortage, for example, regulating the price of bread only trades one expression of scarcity (high prices) for another (empty shelves). This is the key statement to refute if you want to argue for rent control.

Why? That argument doesn’t address the fact that many cities have an absolute limit on supply in the form of space, and no amount of construction that starts today will bring prices down today. Here are some arguments to refute if you want to oppose rent control, particularly the first one (copied and pasted directly from investopedia): “Rental prices in many U.S. cities are rising far faster than wages for moderate-…

Berlin has a lot of empty space, including various brownfields that would look better if they were built over.

German construction industry used to be chronically overbooked, though. IDK how does the situation look now.

German bureaucracy probably does not help. When it comes to red tape, Germany is one of the most onerous countries to do anything new.

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

#188

Post by anoncake »

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…

Giving people "incentive to move" – aka forcing them out of their homes – doesn't increase supply. Unless they're "moving" onto the streets in which case you did free up a flat.

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

#189

Post by rsj_hn »

lornemalvo wrote: post #169
rsj_hn wrote: post #139

Earlier quoted context omitted.

Yes, this cogent analysis describes why communist nations are known for food security whereas those capitalist nations are known for starvation.

When I look at the list of famines in the last centuries, it does not look like capitalism provides any kind of food security.

Then you should read the list of famines rather than just looking at the page, because after the invention of fertilizer which brought an end to mass starvation (and was another product of capitalism), the biggest famines in the history of the world have been from communist nations, whereas the main problem in capitalist nations is obesity. Even the homeless here suffer more from obesity than from hunger.

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

#190

Post by droopyEyelids »

briffle wrote: post #160

In Oregon, they passed a statewide rent control. They pointed out repeatedly at how rent had gone up 30% over five years. The solution, is that now landlords can only increase rent 7% (plus inflation) per year. This year, its something like 9%. Apparently, someone forgot to figure out what >7% per year for 5 years is..... Its 40%, before the inflation numbers are added in.

I don't quite understand how you're framing this.

Oregon figured out a level of increase that would be too disruptive for its appetite, and had the legislature cap the rate to below that level.

On average over the past five years, that cap would not have been reached, though it may have been reached in any one of those years.

Is this a self own or mistake of some kind? Are you inferring that landlords will now raise rents more than they would have in the uncapped situation?

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