Berlin approves 5-year rent freeze • Hacker News Board

Re: Berlin approves 5-year rent freeze

#431

Post by brightball » Tue, Jun 18, 2019, 10:10 PM UTC

pantalaimon wrote: post #372

jimmaswell wrote: post #309

Earlier quoted context omitted.

I don't buy any of this. Growing up everyone around me saw the city as somewhere you begrudgingly went out of necessity and only lived there if you had no choice, and I'm inclined to agree. In virtually every aspect I find more countryside-ish living much more pleasant. Consider virtual reality and remote work. I imagine much of the workforce will move to virtual offices in the near to medium-far future when corporat…

That's odd because it it's pretty much the polar opposite of what I've experienced. Everyone wants to move to the big cities, especially Berlin, as they provide culture and a sense of freedom. You are able to meet like-minded people and are able to experience culture and infrastructure that simply does not exist in rural areas. This of course makes makes the situation for the villages worse as many young people move…

And IMO that's also a product of rent freezing.

Without rent freezing, rents continue to increase substantially enough that investors either build more housing in/near the urban centers to meet demand OR the price shifts high enough to make the decisions to live in rural areas much more appealing.

Re: Berlin approves 5-year rent freeze

#432

Post by ericd » Tue, Jun 18, 2019, 10:12 PM UTC

MickerNews wrote: post #390

2T1Qka0rEiPr wrote: post #22

As much as I can sympathise with the predicament, this decision, and the Berlin housing market in general, absolutely baffles me. When I moved here I was warned of 100 people turning up to a flat viewing, and laughed it off as some hyperbole. Only later did I find out that it actually happens , albeit the maximum viewing I went to was around a meagre 50. Having come from the UK, I found the situation in Berlin to be…

>The solution is to build houses, but what kind of investor is going to throw their money at Berlin, where their opportunity to make a return on their investment is severely hampered? Uh, the state. It's strange to me that someone can honestly ask this question. The free market has failed as is its wont in these matters, this failure always needs to be addressed by the state. Where were you for the last global econom…

What does the last global debt crisis (which was caused by central banks around the world keeping interest rates incredibly low for a long time, which allowed housing debt/speculation to balloon massively, and then tightening suddenly) have to do with the failures of the free market to develop sufficient housing?

And in many major cities, things like zoning are preventing developers from building nearly as much housing as they’d like.

I guess I’m just kind of baffled as to how you’ve reached the conclusions you have. I’d love some clarification.

Re: Berlin approves 5-year rent freeze

#433

Post by [deleted] » Tue, Jun 18, 2019, 10:15 PM UTC

jimmaswell wrote: post #309

zanny wrote: post #269

Earlier quoted context omitted.

Pretty much every western nation has systemically failed to recognize or support the insanely high demand for high density living in the 21st century. That is where the future of economics is, where the future of humanity in general pretty much is, and every democracy is consistently demonstrating the total inability for legislatures to sacrifice the advantage of those lucky enough to inhabit cities as they exist now…

I don't buy any of this. Growing up everyone around me saw the city as somewhere you begrudgingly went out of necessity and only lived there if you had no choice, and I'm inclined to agree. In virtually every aspect I find more countryside-ish living much more pleasant. Consider virtual reality and remote work. I imagine much of the workforce will move to virtual offices in the near to medium-far future when corporat…

[deleted]

Re: Berlin approves 5-year rent freeze

#434

Post by johnnyfaehell » Tue, Jun 18, 2019, 10:16 PM UTC

pantalaimon wrote: post #391

johnnyfaehell wrote: post #92

Earlier quoted context omitted.

To be fair, this isn't their first or only response. They're building housing as fast as possible. Within a 5 minute walk from my apartment in the last year there has been 5 brand new housing towers built. They've also introduced laws to stop people from buying up apartments to rent out via Airbnb. Considering even with the law that limits how much they can raise their prices, they're just doing unneeded renovations…

> They're building housing as fast as possible. That's not true at all. The number of building permits granted has actually dropped and when new developments are granted, the number of apartments build will always be negotiated down from the original proposal. It's insane. The dense Gründerzeit quarters are the ones that are most popular, yet we are unable to build anything alike.

> That's not true at all. The number of building permits granted has actually dropped

Ok. But the real statistic to disprove the statement is the percentage of building permits granted based on building permit applications. Has that dropped? Or is that still rather high? Also, I think you're not mentioning the fact that major parts of Berlin are against gentrification so while the local government want something, the people don't, because that gentrification allowed them to bypass the rent rise law.

Realistically, to say they aren't building a ton of new housing at a rather fast rate would be a lie. As fast as possible, maybe hyperbolic but that is all.

Re: Berlin approves 5-year rent freeze

#435

Post by mc32 » Tue, Jun 18, 2019, 10:18 PM UTC

leereeves wrote: post #409

hokus wrote: post #398

Its really simple. We should tax property AND rent to the point where it becomes unprofitable to hoard it for purposes of unproductive wealth extraction. Then change all rent contracts into lease-buy contracts. You would accumulate a good percentage of madly overpriced rentals that no one wants then they go bankrupt one by one. You get those delicious market dynamics we [apparently] crave more than any social convent…

And who would build new rental properties under those conditions?

Under those conditions I think only the state begrudgingly would build large blocks of cookie cutter but pragmatic flats. Something ala eastern block country estate housing.

I don’t think we want that. Although some do want that. S better alternative is Tokyo or Singapore (though they had their state built flats too —which inspired state built flats in Brazil.)

Re: Berlin approves 5-year rent freeze

#436

Post by CryptoPunk » Tue, Jun 18, 2019, 10:24 PM UTC

MickerNews wrote: post #390

2T1Qka0rEiPr wrote: post #22

As much as I can sympathise with the predicament, this decision, and the Berlin housing market in general, absolutely baffles me. When I moved here I was warned of 100 people turning up to a flat viewing, and laughed it off as some hyperbole. Only later did I find out that it actually happens , albeit the maximum viewing I went to was around a meagre 50. Having come from the UK, I found the situation in Berlin to be…

>The solution is to build houses, but what kind of investor is going to throw their money at Berlin, where their opportunity to make a return on their investment is severely hampered? Uh, the state. It's strange to me that someone can honestly ask this question. The free market has failed as is its wont in these matters, this failure always needs to be addressed by the state. Where were you for the last global econom…

The last global financial crisis was created by the world's largest Central Bank. It had absolutely nothing to do with the free market when the largest banks were dealing with government-guaranteed securities and were speculating on a government created bubble.

In a free market, all those who poured billions into the bubble would have gone bankrupt and all of their real assets would have been sold off in bankruptcy proceedings to responsible players who are less likely to over leverage themselves and exacerbate the speculatory frenzy in the next bubble.

The only reason the market hasn't solved the housing problem is government interventions like rent control. In places without these interventions and with strong enforcement of private property and contract rights, the market does an absolutely excellent job of providing housing.

The effects of rent control have been observed for a hundred years. In city after city rent control has been observed to cause more harm than good for the population at large.

Re: Berlin approves 5-year rent freeze

#437

Post by oh_sigh » Tue, Jun 18, 2019, 10:25 PM UTC

blub wrote: post #318

cperciva wrote: post #289

Earlier quoted context omitted.

Better that the current citizens have reasonable living conditions... What makes current citizens more deserving than the people who want to live in Berlin but won't be able to due to policies which reduce the supply of housing?

Assuming they have a home in Berlin, the fact that they already live there makes them deserving. A home is unlike any other material good and the basis of securing a livelihood, it should not be allowed to exploit tenants for profit. AirBnB'ers and other speculators are of course not deserving at all.

People who own and live in their home in Berlin aren't affected by a rent freeze though. It is only renters, who by definition do not own where they live.

Re: Berlin approves 5-year rent freeze

#438

Post by gwright » Tue, Jun 18, 2019, 10:25 PM UTC

seunosewa wrote: post #336

gwright wrote: post #288

Earlier quoted context omitted.

This is a terse comment with not a lot of context, but I think it is misleading to say the "market is broken" as it suggests that the market mechanism is at fault but in reading these comments it sounds like the government regulations are the source of the problem.

A market can be broken through the actions of private actors too. Monopolies and other anti-competitive organizations, criminals, poorly educated market participants, externalities not properly accounted for, etc can “break” a market. In this case a large number of voters seem to believe that rents should not increase even if demand vastly outstrips supply, forcing the government to create short-sighted policies to t…

Sure markets can be affected by private actors, but I still think "broken" isn't a helpful way to think about market conditions. High and low prices are examples of the market working exactly as needed by signaling that there is un-met demand (high prices) or mis-allocated resources (low prices).

Re: Berlin approves 5-year rent freeze

#439

Post by Pyxl101 » Tue, Jun 18, 2019, 10:29 PM UTC

max_hoffmann wrote: post #412

seunosewa wrote: post #383

Earlier quoted context omitted.

Why must people currently living in a city be able to do so in the future? I think it makes sense to allow people whose skills are more valuable to a city to take the place of those whose skills are ... more valuable elsewhere. Cities evolve. Do I deserve to continue living in a city in perpetuity just because I happened to get to the city before others?

Why should we exclude some people from living in attractive cities? Being less wealthy doesn’t mean a job is less valuable. Police officers, firefighters, bakers, artists, nurses… currently struggle living in attractive cities because they cannot afford it. This makes these cities less liveable for everyone.

This seems like a problem that is naturally solved by market forces, supply and demand. If some job is sufficiently valued in a city, then businesses and government will pay whatever wage is necessary to hire people to perform that job.

If people who are doing some job cannot afford to live in a city, then they will move away or find a different job. This will cause a shortage of people performing the job.

If there is a shortage of people doing the job, and the results of that job are sufficiently valued, then employers will be forced to raise wages until they can attract the number of employees required.

For example, if a city has a shortage of police offers, then they can solve that shortage by paying police officers a higher wage. If the city cannot recruit police without a higher wage, then the city will need to allocate more funds to police compensation so that they can pay a higher wage. If the city doesn't have the funds, then they may need to take the issue to the voters, who can approve some form of appropriation like a new tax to pay for it.

Alternatively, perhaps the voters will not approve a tax, and the city will not pay a higher wage for police, and there will be a police shortage. That's the voters' decision. The city will experience the consequence of the police shortage, whatever that may be. Later, the voters may change their mind and decide to approve the tax.

My point is that the fact of there being a labor shortage will cause a correction naturally via market forces.

Re: Berlin approves 5-year rent freeze

#440

Post by caseysoftware » Tue, Jun 18, 2019, 10:35 PM UTC

While rent may freeze, what are the unintended consequences?

- Will enough of the "right people" be able to move in to fulfill the right jobs? Keeping a barber seems great until you realize that there aren't enough doctors.

- Will "rent" be shifted to other, less trackable metrics? Will there be large application fees to apply? Does Berlin have something similar to condo associations or HOAs that will increase?

There are consequences to every action.. are the first order ones acceptable here?