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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

#231

Post by yladiz »

DangerousPie wrote: post #101
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…

I think it's the opposite. The rent cap (at least in the way it was implemented) achieved nothing to solve the problems that exist in the Berlin rental market. It led to a huge decrease in rental supply. Yes, rent may have been cheap for the few people who managed to get a place, but it was a lottery with dozens of applicants for each flat. This mismatch of supply and demand is exactly the kind of thing that would be…

> It led to a huge decrease in rental supply.

This was artificial though, as landlords were waiting to know the outcome of this ruling. It's not like the apartments just vanished from existence.

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

#232

Post by corty »

that_guy_iain wrote: post #224
corty wrote: post #191

Earlier quoted context omitted.

Depends. Public construction is very different from private and industrial construction. As the industry pays well, on time and demands results, their construction sites are staffed to the fullest amount possible and complete astonishingly fast. Public construction on the other hand goes with the cheapest bidder, so doesn't pay that well. Also, the state will only pay after a lengthy process of inspections and trying…

> As the industry pays well, on time and demands results, their construction sites are staffed to the fullest amount possible and complete astonishingly fast. In my opinion, compared to other countries things that would be built within 8-12 months take 2 years.

Yes, that might be the case. I'm just comparing to the average German construction site.

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

#233

Post by yokaze »

jurip wrote: post #173
phaer wrote: post #155

Earlier quoted context omitted.

That's true, but your premises are wrong for most of the luxury real estate market in European cities (and likely elsewhere). Most buyers are investors in one way or another and for them it's good enough if they believe that prices will continue to rise.

But does it matter who owns the place as long as someone lives there? I mean I assume that the investors are renting them out. If not, surely they're losing out on a very nice income stream, and it's hard to believe it's all that popular. There are probably some empty apartments — that's a requirement for a working housing market, given that people need empty places to move into — but the proportion of empty investme…

From what I've heard, the problem here is a bit with expectations.

Institutional investors have higher expectations of return of investment and are more likely willing to forego a small rent in the hope for a larger future rent. They have more deep pockets. And on top of that, expectations from an international market, which Berlin did not match. Investors are expecting that to change in the long run. And the funny thing, with a limited supply in housing and an increase of investors with such a behaviour, it is a self-fulfilling promise.

The number of empty apartments in Berlin is hard to guess. Not an expert in that matter, but from a quick search, the number is anywhere between 0.8% and 2%.

Yes, it is important to have apartments empty for some time, so people can actually move, but as I understand, that is excluded from those considerations/statistics. We are looking at apartments which are empty for more than three months (which is theoretically illegal in Berlin).

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

#234

Post by nicbou »

FlyingSnake wrote: post #123
nicbou wrote: post #88

Earlier quoted context omitted.

Correct. Unfortunately, the Mietpreisbremse is not as "automatic", because there is no fine tied to it. This means the landlord will not reduce your rent unless you do something about it. It also brings a lower reduction than the Mietendeckel. Unfortunately, many rent contracts had a "shadow rent" clause - a higher rent they'd have to pay retroactively if the Mietpreisbremse was repealed. A lot of people are about to…

Thanks for putting it nicely. This sums it really well.

I will write a longer practical guide for Berliners affected by this. It should go live today or tomorrow on allaboutberlin.com.

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

#235

Post by yladiz »

durnygbur wrote: post #137
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.

I'm not sure how long ago you looked, but that definitely isn't the case, both from research and personal experience.

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

#236

Post by yokaze »

southerntofu wrote: post #185
jdasdf wrote: post #140

Earlier quoted context omitted.

>What's wrong with that? ...The high housing prices.

High housing prices has to do with treating housing as a market and not as a basic human need. Prices are correlated to supply and demand, only if you take into account that the biggest landlords willingly leave apartments/buildings empty to drive up the prices (speculation).

Okay, then the lack of housing.

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

#237

Post by pitkali »

durnygbur wrote: post #137
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.

While 80k is above a median for a senior software developer, it is not unattainable, as far as I know.

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

#238

Post by DangerousPie »

ceilingcorner wrote: post #174
DangerousPie wrote: post #114

Earlier quoted context omitted.

If salaries were so bad, people would stop moving to Berlin and rents would fall. The fact that housing is still under such high demand shows that Berlin is clearly still a desirable place to live.

I don’t think salary is the only or even primary reason people move to Berlin.

Sure, but in the end the market rents will still reflect the desirability of living in Berlin. Whether that's because of salaries, culture, transport or something else.

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

#239

Post by goodpoint »

DangerousPie wrote: post #101
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…

I think it's the opposite. The rent cap (at least in the way it was implemented) achieved nothing to solve the problems that exist in the Berlin rental market. It led to a huge decrease in rental supply. Yes, rent may have been cheap for the few people who managed to get a place, but it was a lottery with dozens of applicants for each flat. This mismatch of supply and demand is exactly the kind of thing that would be…

> This mismatch of supply and demand is exactly the kind of thing that would be solved through pricing in normal markets.

The very opposite. The market optimizes for maximum profitability, not for maximum savings for renters or best quality of life.

There's a reason why governments have been building cheap housing across the last 100 years in most developed countries.

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

#240

Post by Slippery_John »

mschuster91 wrote: post #39
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…

> 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…

There's plenty of space. I've walked by countless empty lots and abandoned buildings that could easily fit dozens or hundreds of new apartments. I'm sure there's plenty of ridiculous legal challenges to actually building on those spots, but that doesn't mean that there's no land available.
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