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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

#241

Post by AlchemistCamp »

lqet wrote: post #204
AlchemistCamp wrote: post #176

Earlier quoted context omitted.

A market response to supply and demand is illegal? What law would do that if not a rent cap?

§556d, 1 of the German civil code. https://www.gesetze-im-internet.de/bgb/__556d.html It's illegal here to demand a rent more than 10% higher than the "ortsübliche Vergleichsmiete", which is approximately the local rent averaged over the last 6 years (exactly defined in §558) More generally, you cannot simply ask for astronomical prices for anything in Germany just because you know that people are in a position where…

Interesting. That sounds a lot like rent control if the wiggle room is only 10% over a 6 year moving average.

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

#242

Post by ewindal »

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.

Amazon Berlin has >€80k for entry level roles.

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

#243

Post by qayxc »

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…

> If you are convinced that this will happen in your city maybe now would be a great time to buy a place?

Did you miss the part were they explained they can't do it because they only have a temporary assignment? This sounds a lot like "just be rich".

The reality is that a lot of people simply cannot afford to just "buy a place". According to some statistics [0], 40% of Americans (i.e. a "rich" country), are just one missed paycheck (or unexpected expenditure) away from homelessness. If you belong to the 60% that aren't and never experienced the situation, I understand how foreign the concept might seem to you.

[0] https://www.cbsnews.com/news/40-of-americans-one-step-from-p...

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

#244

Post by hawos »

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…

There are dozens of appicants for each flat anyway, with or without the cap.

Not everyone can just buy a place, if rents keep increasing only rich people will be able to afford living in the city, you need a lot of non-rich people to actually run the city though: cashiers, nurses, teachers, firefighters etc. It's not that easy.

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

#245

Post by goodpoint »

pitkali wrote: post #237
durnygbur wrote: post #137

Earlier quoted context omitted.

> 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.

Can you provide sources?

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

#246

Post by southerntofu »

yokaze wrote: post #236
southerntofu wrote: post #185

Earlier quoted context omitted.

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.

If you have statistics, i'm interested, but to my knowledge there is no housing shortage in Berlin. If anything, there's more housing than ever before, it's just trapped in the hands of landlords who want to speculate on it.

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

#247

Post by corty »

cbqfund wrote: post #125
lqet wrote: post #105

Earlier quoted context omitted.

> Why not make it a multistory building with apartments on top of the supermarket and skip the parking space or put it underground? That's exactly what they are doing at a few places in my city (also with a massive housing problem). We recently found a new apartment here, the process was as follows: (1) We found the apartment online. It was online for exactly 6 hours, listed by an estate agent. (2) Inside the listing…

And (2) means that privacy oriented persons no longer can get an apartment in Germany. BTW, 10% of these data collecting advertisements on the real estate websites are from identity thieves.

Actually what they are doing and asking for is illegal. Asking for credit scores, proof of employment and sensitive stuff like that is only legal when an offer to rent is actually being made to that candidate. Just having everybody send in everything is common, but should never happen. However, privacy watchdogs are somewhat toothless and future renters put up with it because they have no other choice.

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

#248

Post by [deleted] »

nicbou wrote: post #145

Without judging the outcome, here are a few things HN readers might not be aware of: - The supply of rental apartments dropped by 40-60% after the Mietendeckel came in effect. It became even harder to find an apartment in Berlin. Landlords were holding their breaths. - The supply of housing for sale also dwindled. If I'm not mistaken, sellers were waiting for the court judgement to rent/sell. - The Mietendeckel also…

[deleted]

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

#249

Post by jurip »

yokaze wrote: post #233
jurip wrote: post #173

Earlier quoted context omitted.

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 t…

Ah, all right. A significant stock of empty apartments would certainly be suboptimal in a city like Berlin. I'm not a big fan of bans on things that don't cause direct harm to people, but I don't see any reason to not heavily tax apartments that are kept empty.

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

#250

Post by DangerousPie »

goodpoint wrote: post #239
DangerousPie wrote: post #101

Earlier quoted context omitted.

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.

The market is how we find a compromise between tenants' desire for low rents and landlords' desire for high rents. I don't think you can say it optimizes for landlord profitability but it obviously also doesn't optimize for savings of renters. I agree that this is not perfect, but I think it's the fairest proxy we got. Attempts at regulating rents directly usually end up causing all sorts of unwanted side effects and make things worse for both tenants and landlords.

That said, I'm not opposed to the government building cheap housing. I think that's actually the best solution to an undersupply of housing.

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