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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

#301

Post by southerntofu »

pharmakom wrote: post #283
southerntofu wrote: post #195

Earlier quoted context omitted.

As an individual person with a heart, it's hard to wrap one's head around. But the problem is landowners are usually very rich and soulless, when not actual corporations who have nothing human at all. To them, an empty apartment is just a line in a spreadsheet that will bring them money sooner or later. Renting the apartments would be more trouble for them, despite bringing in a little more money.

Seems like a market opportunity. Take on the rental risk and management costs for some fraction of the rent payments. Insurance can be used to hedge against damages.

Many companies are doing that already, and it's not working as a strategy for housing people (despite making some people very rich). The problem is that housing is a market to begin with. Basic commodities like housing shouldn't be subject to speculation and other capitalist nonsense.

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

#302

Post by vetinari »

EdwinLarkin wrote: post #160
gjulianm wrote: post #141

Earlier quoted context omitted.

https://en.wikipedia.org/wiki/Perfect_competition#Idealizing... People can't live without housing so demand is not elastic. Plus the housing market is special regarding spatial location. Applying regular market rules as if the housing market behaved the same as, say, the screwdrivers market, does not make sense at all.

In 99% cases it's the government/zoning rules that prevent increasing the supply of housing not private investors not wanting to build enough.

It is more nuanced; the private investors want to make profit as quick as possible, they do not care about long term development of the area (many politicians either, they might not be in their position after next election).

The private investors won't do infrastructure either - it is expensive - so they want to build where the infrastructure is already in place. So that's why we see trying to increase density.

So the zoning rules are there as a conterweight to this.

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

#303

Post by acjacobson »

AlchemistCamp wrote: post #241
lqet wrote: post #204

Earlier quoted context omitted.

§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.

It is rent control - which basically exists throughout Germany. Even in SF rent controlled apartments can increase some % per year, it is just controlled how much. In Germany this is often done by looking at the region's average price for similar properties and then fixing some limited increase against that. This is distinct from the rent cap that was overturned, which stated no rise in rent at all for five years.

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

#304

Post by qayxc »

Darmody wrote: post #297
qayxc wrote: post #255

Earlier quoted context omitted.

Because people are good at gaming the system.

What about investors not wanting to invest a single cent into building new estate because it is not economically viable anymore? Is that gaming the system?

"Economically viable" must not be confused with "extremely profitable". Housing is economically viable as soon as revenue is positive in the mid- to long term.

Extremely profitable on the other hand is much more attractive to investors than economically viable. It promises short term ROI with great revenue and very low risk in overheated markets.

There's a balance to be struck here and thinking in extremes just isn't helpful.

And yes, I do consider buying up land and just letting it sit there until housing crisis becomes severe enough that developing luxury housing becomes profitable to be gaming the system.

It's funny how quick investors are to complain about something not being economically viable and praising the free market and its power to innovate, while at the same the cost of developing houses goes up and up and up.

Where's the innovation there? How come a portable supercomputer can be bought brand new for the equivalent of a day's worth of work today, while at the same time fewer and fewer people can afford to own a home?

Why hasn't the increasing demand for affordable housing spurred innovation in that sector and why is nobody even asking that question?

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

#305

Post by inglor_cz »

southerntofu wrote: post #139
inglor_cz wrote: post #49

Earlier quoted context omitted.

Has Berlin built over all its brownfields? If so, very commendable. Here in Prague we have quite a few brownfields that could be home to at least 50 thousand people (Rohanský ostrov, Bubny, Kolbenova), but the development is extremely slow.

> Has Berlin built over all its brownfields? If so, very commendable. Well having some undeveloped space is actually quite nice to enjoy in a city. We don't have to live packed narrowly on top of one another. But more specifically, brownfields (previously-industrial spaces) are usually highly polluted. Some are full of heavy metals and chemicals that you really don't want to displace into the air by digging into the…

Where I was born (Ostrava, a heavy industry city), there was a giant, massively polluted brownfield right next to the city centre.

It required several years of sanation works to clean up, but now it is built over and serves the needs of the population. [0]

I believe that this is a reasonable use of public money, even though private developers profit from it. Or possibly finance it through a Public-Private Partnership project.

The alternative is to let poisoned land within borders of a big city stay poisoned forever. Which does not sound either people- or environment-friendly.

[0] https://www.ostrava.cz/en/podnikatel-investor/real-estate/br...

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

#306

Post by FlyingSnake »

nicbou wrote: post #234
FlyingSnake wrote: post #123

Earlier quoted context omitted.

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.

Ah thanks, that site is a goldmine of info for Expats in Berlin

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

#307

Post by corty »

rorykoehler wrote: post #41
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…

It seems like covid will solve the Berlin housing problem. My building in Schillerkiez is slowly emptying out.

How does that work, I don't suppose residents are dying away? Does unemployment force them to move out?

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

#308

Post by corty »

llampx wrote: post #272
oleganza wrote: post #40

Earlier quoted context omitted.

My impression of Berlin (living there for the last 2 years) is that there's plenty of space, plenty of new housing already built and plenty of new construction still going. SF, NY, Paris and London are way more crowded and under-housed in comparison. Shitty one-story supermarkets are really just a sign of abundance of space and not enough demand (yet). Among big European cities the rent seems low. You can buy an supe…

Berlin needs much more new housing. I keep an eye on the market both for buying and for renting , and the prices for buying have exploded upwards at the same time as the number of flats for rent has steeply declined. Empty ugly spaces (not Parks or Public squares) are a symptom of a lethargic bureaucracy, not a healthy thing.

Berlin is also full of empty spaces for historical reasons. Previous rulers intentionally built some things big and far apart for their capital, WW2 left even more unused spaces after the rubble was cleared and during the cold war only some parts got rebuilt. So even compared to most smaller German cities, Berlin has a low density overall.

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

#309

Post by wrthfl »

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…

You actually made me create a HN-Account to reply to this.

This is not true. The cap didn't apply to new flats. Which means that nobody wanted to invest and build new housing, but instead created artificial scarcity, there are a lot of empty buildings now because very few people can afford some of the abhorrent prices.

So yeah supply and demand totally worked. /s

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

#310

Post by corty »

spdionis wrote: post #85
dgellow wrote: post #62

Earlier quoted context omitted.

The amount of unused space is Berlin is just so massive. Even in Friedrichstraße, which is a hype neighborhood with great amount of activity, you have hundreds of square meters completely unused, with wild plants growing around and random waste accumulating. From what I understand it is very difficult to do something with that space, either because people refuse to sell or because of bureaucratic red tape.

Wild plants growing around in a city, the horror!

Well, either you build over the growing plants in the city, or you raze plants in the outskirts. The former gets complaints because people want greenery in the city, the latter gets complaints because of sprawl, added traffic and unnecessary pollution.
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