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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

#31

Post by syats »

Let us recall that that inflation in Germany is close to 0. Thus, saying that policy X is responsible for a price hike is hilarious. There is no reason to raise the prices of unregulated apartments (second plot), except the greed of those owning the units.

Another way to read this article is "this rent control is bad because we real-state speculators are now focusing our greed on a smaller number of people, instead of focusing it on everyone else".

That being said, it is not clear from the plots that the overall amount of money that is being spent, city-wide, on housing has increased or decreased. I would argue this is the only valid metric to asses how effective this particular policy is.

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

#32

Post by sudosysgen »

fallingknife wrote: post #15
sparsely wrote: post #7

I expected to agree with that article, but honestly the tradeoff seems reasonable. Given just the data presented there, is it actually worse if rent controlled apartments are hard to get if lots of people are also paying much less rent? I'd really want to see some data about lots of people wanting to move to or within Berlin who are not able to due to lack of supply. That data may well exist but isn't presented here.

Is it worse if now there is a special class of people who happened to be in the right buildings at the right time when this law passed who will now forever get discounted rent, leaving everybody else to pay full price?

You mean, exactly like people who have enough money to buy instead of rent as real estate values keep climbing?

In Berlin, people that already have social relations and support structures are the one that get discounted rent, which is what we want! This is better than if wealthy people get to pay less for housing. It's not as if the alternative made it cheaper.

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

#33

Post by tom_mellior »

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.

"Proof by analogy is fraud." -- Bjarne Stroustrup

Even if you don't fully agree with this quote, claiming that only arguments by analogy can ever be valid arguments for rent control is... surprising.

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

#35

Post by sudosysgen »

steviedotboston wrote: post #20
sparsely wrote: post #7

I expected to agree with that article, but honestly the tradeoff seems reasonable. Given just the data presented there, is it actually worse if rent controlled apartments are hard to get if lots of people are also paying much less rent? I'd really want to see some data about lots of people wanting to move to or within Berlin who are not able to due to lack of supply. That data may well exist but isn't presented here.

You also need to look at how many formerly rent controlled apartments have been sold and taken off the market. The charts don't really show that, but the articles suggests that is happening

If they are finding homeowners which are not renting them, is that not a good thing?

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

#36

Post by [deleted] »

dmfdmf wrote: post #14
cpufry wrote: post #4

Earlier quoted context omitted.

the dismal science

It is only dismal if you think money should grow on trees which seems to be the premise behind FED policy today. Is physics "dismal" because we can't have free energy or perpetual motion machines (that can do work)?

[deleted]

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

#37

Post by Barrin92 »

I don't actually see the disaster at all. Prices are staying low for millions of people already living in the city. Yes it's a pain for people who move but it might very well be a worthwhile trade-off.

However the real long term point is made at the end of the article.

>"The biggest question is whether this episode of left-wing populism has damaged confidence in Berlin’s real-estate market permanently. If investors fear that local property rights will be put at risk in every election, they might stop building houses in the city at all."

This isn't a disaster, this is what needs to happen. Drive down the property market, reclaim the housing stock, turn it into mixed income public housing, which is exactly what Vienna did when the Social Democrats took control of the city in the early 20th century. Today most of Vienna's housing is public housing, and it is considered one of the most livable cities on the planet. Driving the landlords and real estate companies out of the city is only a disaster for the professional rentier class. The only problem Berlin has right now is that it hasn't gone far enough.

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

#38

Post by BurningFrog »

rbranson wrote: post #17
fallingknife wrote: post #15

Earlier quoted context omitted.

Is it worse if now there is a special class of people who happened to be in the right buildings at the right time when this law passed who will now forever get discounted rent, leaving everybody else to pay full price?

This sounds a lot like land ownership.

It turns renters into a kind of owners, yes.

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

#39

Post by crote »

fallingknife wrote: post #15
sparsely wrote: post #7

I expected to agree with that article, but honestly the tradeoff seems reasonable. Given just the data presented there, is it actually worse if rent controlled apartments are hard to get if lots of people are also paying much less rent? I'd really want to see some data about lots of people wanting to move to or within Berlin who are not able to due to lack of supply. That data may well exist but isn't presented here.

Is it worse if now there is a special class of people who happened to be in the right buildings at the right time when this law passed who will now forever get discounted rent, leaving everybody else to pay full price?

Exactly, it should be extended to all rental units.

An important part of the regulation is that the landlord cannot raise the rent when a new tenant moves in - the rent is locked for the unit, not the tenant. This prevents situations like New York, where you are essentially unable to move.

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

#40

Post by kamyarg »

I have mixed feelings about this policy as a berliner.

But the article is definitely skewed towards the landowners and huge renting companies.

Some facts for you:

Rate of home ownership among Berliners, Londoners, Parisans:

- Berlin: 17.5%

- London: 52%

- Paris: ~60%

The main problems is huge home-renting corporations. The article refers to a separate discussion about breaking up huge companies that own more than 3,000 apartments. As far as I know this criteria meets only a couple of huge companies such as Deutsche Wohnen that over the past couple of years have artificially created a sense of scarcity and caused the rent to increase without a proportionally increase to wages(Not only blue collar but also High Tech wages)

It is very ironic that companies such as Deutsche Wohnen were able to grab so many apartments when Berlin wall fell with dirt cheap prices. You can argue rushed privatisation caused this problem and something needs to be done if Berlin wants to avoid becoming SF.

- https://guthmann.estate/en/market-report/berlin/

- https://www.trustforlondon.org.uk/data/housing-tenure-over-t....

- https://tradingeconomics.com/france/home-ownership-rate#:~:t....

- https://www.dw.com/en/berlin-social-democrats-reject-expropr...

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