City of Berlin Backs Plan To Freeze Rents For Five Years (theguardian.com) 166
The Berlin Senate on Tuesday approved a five-year rent freeze designed to tame soaring housing costs in the German capital, bowing to pressure from residents angry that their city has become unaffordable. From a report: Once described as "poor but sexy," Berlin's housing costs have doubled over the last decade as employees lured by the strong job market move into the city. The sharp rent hikes have led some residents to ponder radical solutions, including pushing for the seizure of housing stock from landlords. Berlin's city government agreed on Tuesday on the outlines of a draft law that would include a temporary freeze on rents for five years from 2020, with a bill to be drafted. The cap means "protection against rent increases for 1.5 million apartments," tweeted the Berlin government's department for urban development and housing. Under the plan, landlords who seek to raise rates because of renovation work will also have to seek official approval for any increases above 50 cents (44p) per sq metre (11 sq ft).
That's not how any of this works. (Score:5, Insightful)
This is like putting a bandage on a knife wound; the problem is internal bleeding.
You've got to allow the market to work: Let people BUILD; prices are a signal: There is demand for more lebensraum.
Re:That's not how any of this works. (Score:5, Insightful)
You've got to allow the market to work: Let people BUILD; prices are a signal: There is demand for more lebensraum.
Sure, that is the obvious long term solution.
But many renters don't care about the long term. They are only planning to stay for a few years, and then move on. This is why rent control is so popular in college towns: Students want lower rents NOW, and don't really care about the insidious long term consequences, because they will soon graduate and leave.
Democracies do plenty of stupid things, with full realization by nearly everyone that the policies are stupid, because of the mismatch of long term consequences with the short duration of political election cycles.
So what's the solution? I dunno.
Re: (Score:2)
Don't you get to reset the rent once people move out with most implementations of rent control (this doesn't appear to be what Berlin is doing though)?
Re:That's not how any of this works. (Score:5, Insightful)
No, see, rent control causes shortages of housing, which leads to big increases in rent between tenants as there is so much pent-up demand.
So then the people who pushed for rent control in the first place go crazy and push the government to attach the rent control to the unit instead of the lease, so the rent can never go up more than the controlled amount. Which of course causes even more housing shortages.
Tenants' groups are currently trying to force the government of BC to do this to landlords.
Re:So pray tell, how does it work? (Score:5, Insightful)
Oh, and here I thought it was the lack of housing that caused shortages of housing.
But what causes the lack of housing? Not enough construction of new housing. What causes that? Either it's directly disallowed by government, through restricting the issuance of building permits or poor zoning policies, or it's caused by builders not being able to make money by building housing. It's really never caused by lack of land, BTW, because assuming government doesn't block the construction of high-rise housing you can create vast amounts of housing in small spaces.
The problem with rent control is that it makes construction uneconomical. Even if the current controls allow sufficiently-high prices that building makes sense, it's likely that that will change, and since construction is always financed over decades, it becomes risky if rent control is even seriously discussed. So even considering rent controls reduces construction of new housing. What's worse is that most rent-control schemes include an exemption for "luxury" housing... which motivates builders to focus their capital and time building that, and even to tear down existing non-luxury housing (made unprofitable or only weakly profitable by the rent controls) and replace it with exempt luxury apartments.
The history of rent control around the world is that it inevitably creates greater housing problems than the ones it was intended to address.
Re: (Score:2)
"But what causes the lack of housing? Not enough construction of new housing."
The population of Berlin is mostly unchanged since the 1950s (http://worldpopulationreview.com/world-cities/berlin-population/), so if there's a problem now, there's been a problem for a very long time.
Re: (Score:2)
Re: (Score:2)
Okay, I can see that. I'm just saying that there needs to be some reason for the increase in demand, or decrease in supply. Population growth isn't it, but maybe something like you pointed out is.
Re: (Score:2)
In addition to the above possibilities some of the housing may have been torn down and replaced during the years of lower population. In 1980 Berlin reached a low point of 500,000 fewer people than it now has, and has mostly been slowly but steadily growing since. Recently it seems to have been adding about 10K people per year.
As it happens, I'm in Berlin this week! Not that that gives me any insight at all in to this question. I've seen little of the city other than the airport, my hotel and the offi
Re: (Score:2)
A lot more people live on their own now in most countries than ever used to as well.
Re: (Score:2)
There was a pretty heavy drop until just prior to when the wall came down in '91. Probably with people migrating in hopes of escape. Between '85 & 90 there was a 361k increase, followed by a decline through 2000, probably as people migrated across Western Germany. Since then (2000-2019), the rate of increase appears in the .3% range. Ref: http://worldpopulationreview.c... [worldpopul...review.com]
I lived in Germany (Cold War veteran) 79-81, 83-85 and 88-91, but never had the opportunity to get to Berlin.
Re:That's not how any of this works. (Score:5, Interesting)
Don't you get to reset the rent once people move out with most implementations of rent control?
That causes many problems:
1. Landlords have a HUGE incentive to evict people, or coerce/bribe them to leave. So, obviously, you need a big government bureaucracy to manage and arbitrate landlord-tenant relationships.
2. Tenants have a big incentive to stay in units that don't otherwise make sense. In Berkeley, lawyers and MBAs who graduated years or even decades ago, live in cheap rent controlled apartments, and commute across the Bay to SF. Meanwhile, students are squeezed out, and forced to commute to school from Oakland. So everyone ends up living in sub-optimal locations, and wasting time and gas commuting. Many of the benefits go to well-off people that don't need to be subsidized, and the cost comes out of the pockets of landlords that are often economically struggling.
Re: (Score:2)
Without rent control, people who work in Berkeley or SF would be priced-out of the market and forced to move much farther away to find cheap(er) rent and be forced to commute.
If all apartments in Berkeley were at market rate, students still would be squeezed out because they could
Re: (Score:1, Offtopic)
And your mommy is very proud of you.
Re: (Score:2)
Over here, if you live in a rent controlled apartment and have an income exceeding a certain limit, the rent increases automatically.
How does the landlord know your income?
If rent is based on income, why don't they only rent to people with higher incomes?
Re: It's called a contract. Government not necessa (Score:1)
Yeah, sure.
That's why house in Dublin Ireland went from â1400 to â2500/month in two years, because renters were (not) able to negotiate.
Caps to unreasonable rent hikes are necessary, as well as new housing.
Still in Dublin the government wanted to relax building code and allow to build new houses without insulation as an incentive for builders. So when outside is - 4, inside you freeze your butt...
Re: (Score:1)
So what's the solution? Socialism, obviously.
Re: (Score:2)
You may have missed the last line of the post you quoted.
Re:That's not how any of this works. (Score:5, Insightful)
The Law Supply and Demand is at play. This fix neither fixes the supply of housing or the demand to get housing. This probably will make it difficult for Landlords to sell their buildings, because you are not going to want to buy a building where you can't get market price for rent for it. If they are not going to get their market value for them, then they will not be doing housing updates, and let these buildings become more run down, thus lowering the damand for housing in the city. Causing the buildings market price to be on par with its value and quality.
Supply and Demand always wins. For the nicer homes, that are kept more up to date, we can expect some black market dealings going on, while their rent may be fixed, they would be paying for extra services outside of the "rent". Either doing free (to the landlord) repairs on the apartment building, or offering other services that may slip past the regulation law, or the fact that both sides would be complicate, may actively ignore the law and just pay the landlord more for rent.
Re: (Score:1)
Rents have doubled in the last decade.
People found it in them to be landlords at 2009 prices, it seems reasonable to expect they'll do so at 2019 prices for a while. I'd be shocked if cost of owning a building has gone up more than 50% in the same decade.
The people that get screwed are the recent purchasers who were assuming continued increase when they made their purchase.
Re: (Score:2)
I am not unfeeling to the tenants who are paying these prices. I am just pointing out that we have economic factors in play that are going to be very tough to fix.
Re:That's not how any of this works. (Score:5, Funny)
People found it in them to be landlords at 2009 prices, it seems reasonable to expect they'll do so at 2019 prices for a while. I'd be shocked if cost of owning a building has gone up more than 50% in the same decade.
Sure, it always ends well when the government starts setting prices or wages. I can see no flaw in this plan.
Re: (Score:2)
That was my point, it's more profitable than it was in 2009.
Costs up 50%, rents up 100%
Re: (Score:1)
This probably will make it difficult for Landlords to sell their buildings, because you are not going to want to buy a building where you can't get market price for rent for it.
So the only people buying will be people who need housing to live in themselves, not as capital to leverage profit at the expense of other people, and those landlords will thus have to sell on terms that people who need housing to live in, not to rent out, can afford. Which is how it should be. The existence of the rental market drives up the cost of buying and traps people in perpetual subservience to landlords. If renting out for profit is not available, what will happen to the market is what should have
Re:That's not how any of this works. (Score:5, Insightful)
Like that's what has always happened when rent controls were put into place, right?
In the Real World (tm), what happens is that the landlord finds he can no longer afford to maintain the buildings, and so things deteriorate into slums....
Which is pretty much what I'm expecting to see here....
Re: (Score:2)
Nobody is going to invest in a property where the ROI is crap. Why put money into something when you can make more elsewhere. The return needs to be competitive, or you won't have landlords. Having been one once, I'll never do it again...it's a pain in the ass and not often a good investment.
Re: (Score:2)
My whole point was that leaving housing for those who want it for its use value, rather than for its investment value, is a good thing. Let people stop being landlords. That's a good thing. That drops the purchase price of housing and lets more people who just need a place to live buy one for themselves instead of renting from someone else.
Re: (Score:2)
How do you suppose those places will be built if nobody is willing to invest in them? Are you proposing additional taxes to cover it? Because right now, it's those investors who pay and want some money back.
Re: (Score:2)
I'm talking about houses that are already built.
And newly-built houses can be paid for by people who are buying them to live in, rather than as investment vehicles.
Also, construction cost is not what is fluctuating between different markets at different times to make some places more expensive than others. It doesn't cost more to build an identical house in California vs North Dakota. It's the land price that differs, it's the land that's being leveraged as an investment vehicle. The demand from people who
Re: (Score:2)
"And newly-built houses can be paid for by people who are buying them to live in, rather than as investment vehicles."
So, no more rentals? How the hell is that gonna work? How does a new grad get into ownership? I think you're being unrealistic here.
" It doesn't cost more to build an identical house in California vs North Dakota."
Sure it does. Worker's incomes are different, the price of fuel is different, the price of nearly everything is different...it's not just the land. https://www.bestplaces.net/ [bestplaces.net]
Re: (Score:2)
Seems like you’re not following the thread. No rentals was the whole point, because that will then force housing to be affordable to those who need it to live in. If there is a demand for cheap housing that new grads can afford, then build that and sell to them on terms they can afford, instead of building the most expensive housing possible to maximize profit from rich people buying it as an investment vehicle. The whole point here is to match the kind of housing being sold to the kind people actuall
Re: (Score:2)
You don't get it. Nobody is going to build homes that cheaply. There's no profit in it for the builders. You just expect people to be able to afford to buy a home right away? There's no indication that that's in any way feasible unless you want the government to subsidize it with other people's taxes.
Re: (Score:2)
Since the population hasn't changed much in decades, unless homes have burned down, I'm not sure this is a supply/demand problem. I'm very much a capitalist, but there's no increase in demand here, so why would prices double unless supply has dried up?
Re: (Score:1)
Allowing the markets to work is how San Francisco and Vancouver became beacons of reasonable real estate right?
Isn't the first step (Score:2, Troll)
Also, what do you do when the market _doesn't_ work? Look at drug prices in the United States. Venture capitalist are buying up existing drugs with 5-10 years left on a patent and increasing prices from $40 to $40,000 (excuse me, $38,892 [newsweek.com]. There I go again, exaggerating).
Rent seeking is a thing.
Re: (Score:3, Insightful)
Re: (Score:2)
Germany's birth rate is already well below replacement level; if you want to reduce the demand for housing then restricting immigration would be the more effective policy.
Or perhaps Germans could make contraceptive more available in the countries sending the immigrants.
This worked in America. As birthrates in Mexico fell from 5 to 2.2, immigration from Mexico plummeted (with a lag of about 20 years).
Re: (Score:2)
Re: (Score:2)
Germany's birth rate is already well below replacement level; if you want to reduce the demand for housing then restricting immigration would be the more effective policy.
AC knows. He's not worried about overpopulation by white people, you see. You see this a lot these days: they don't explicitly say "brown people have too many children", they just complain about overpopulation and let the implications speak for themselves.
Re: (Score:2)
Rent control doesn't solve housing shortages (Score:3, Insightful)
It's just an effective subsidy to existing renters, who pay below market rate for their housing.
It does nothing for people still looking for housing. In fact, it makes it worse since rent controlled properties are more desirable. Shadow markets develop to correct prices, keeping those rental properties out of reach of new renters anyway.
Housing shortage is why the prices are high. Fix that and you don't need to rent control, which has demonstrably bad effects.
Re:Rent control doesn't solve housing shortages (Score:4, Insightful)
I actually agree that rent control does not work. But when you are in a situation where you can not build more due to lack of area, what do you do? Minimum wage jobs are a requirement of any society. Anyone with a skill set will not take them, but they still are needed.
People need a place to live and still be able to eat.
There are always options (Score:3)
Berlin is a closed in city where real state to build is at minimum. Do they actually have the area to build more living areas?
You can always tear something down and build something much taller in the same space.
Or you can go underground.
If you aren't willing to to build tall then you are saying "OK prices are going to go way up" in any city that is popular to live in.
You can at least manage where the tall buildings are, that's all you can do if you want reasonable housing prices for a city.
Also massive roa
Re: (Score:3, Insightful)
Increasing housing density has been a solved problem for a good two or three millennia. This is kind of what cities are for.
When citizens choose not to allow construction of high density housing, they choose higher prices. You don't get it both ways.
Japan has a pretty good solution - Zoning and housing development is taken out of the hands of local government and is decided by the federal government. Urban housing costs in Japan are 1/5th of that in cities elsewhere in the world. Without any form of rent co
Re: (Score:2)
I am not sure that federal control is really a great option in most cases. Do you really want the decision of the zoning board of a city, or town to get wrapped up in national politics, and red tape? I suppose it is a matter of which demon do you want to deal with? You trade corrupt local officials, or national ones. I can see where it might work in a place like Japan, although Tokyo and Osaka are listed as some of the most expensive places in the world to live. Japan is not geographically large, and a
Re: (Score:2)
I'm not sure "lack of area" describes Berlin. From TFA (emphasis mine):
Although there are still huge swathes of unbuilt land in Berlin and construction is mushrooming across the city, much of what is coming on to the market is out of reach for low-income locals despite Berlin having rents below those in major capitals around the world.
Instead of general rent control, maybe Berlin should encourage low-cost housing, maybe by offering tax incentives or other deals to encourage landlords to keep the costs affordable to those with lower income. Obviously, that sort of thing can come with its own issues, but it seems like the city is applying a very broad hammer to a very specific problem.
Re: (Score:2)
The problem is that the money behind new housing construction isn't just some guy who makes money hammering nails, it's financially and economically savvy investment groups. They don't *want* rents to go down, especially not on properties they don't have an investment interest in (ie, that "old" housing that's supposed to become affordable).
These kinds of people will only invest in housing if it makes the kinds of investment returns they want to make. Once rents start falling (some kind of market saturati
Re: (Score:2)
If the city isn't allowing new building or expansion, to meet the population. That is the problem. You may need to take down some of the older buildings and make new ones designed for smaller living conditions, or taller buildings to house more people. There may need development out of the city borders, To keep pricing down, I expect the City doesn't want to reduce its demand, but increase its supply to lower prices.
Re: (Score:2)
Berlin is a closed in city where real state to build is at minimum. Do they actually have the area to build more living areas?
Yes. Plenty of room to build. Just look up.
Population density of Berlin: 3900 / sq-km
Population density of Manhattan: 27000 / sq-km
Dense urban areas make people more productive, and lower their resource consumption and environmental impact.
Instead of trying to reduce CO2 emissions with coercive top-down mandates, we can accomplish much by just giving people more freedom to live where they want.
Re: (Score:2)
Except you can't build up in Berlin. It sits on a swamp.
Hitler wanted to build a lot of stuff, Albert Speer checked the feasibility. It didn't work. [wikipedia.org] High rise is also very expensive.
Re: (Score:2)
Re: (Score:2)
Dubai has more money than sense. Berlin, on the other hand, is broke. If you are so convinced that a "can do" attitude is the only requirement, by all means go ahead and build something in Berlin. The people who tried to built the Berlin Airport had the same delusion, and look what happened.
Re: (Score:2)
Re: (Score:2)
So, your solution is to do something that even you think doesn't work???
Seriously. Rent control has been tried in a lot of places. Hasn't worked in any of them that I've heard of. This is NOT going to have the effect of making housing more affordable in Berlin. But, as a minimum, we can pretty much count on less maintenance on the existing housing, which w
Re: (Score:2)
Re: (Score:2)
The way it is supposed to work is that somewhere gets too expensive and so people move to less expensive places. It's not as though Germany (or the US) has any lack of space. When Berlin gets too expensive for companies to rent space, they move to Bonn or somewhere. Just like California companies move to TX. Indeed that's in part how and why the US was settled westward. Virginia land gets to expensive, move to Indiana. Oops Indiana farms too expensive, move to Kansas, repeat until you hit the Pacific
Re: (Score:2)
Do they actually have the area to build more living areas?
The sky is the limit. Figuratively and literally. Space is a non-issue. Now whether someone wants to start building skyscrapers in Berlin is a different question.
Re: (Score:2)
Rent control seems to work everywhere it's been implemented. What "demonstrably bad effects" are you talking about?
And, it's not a subsidy to existing renters, because the government isn't giving them money. It's the landlords who are losing the money.
Re: (Score:3)
Rent control seems to work everywhere it's been implemented. What "demonstrably bad effects" are you talking about?
Rent control and urban decay [wikipedia.org]
It's the landlords who are losing the money.
And that's okay, because landlords are always evil and rich, and tenants are always poor and virtuous?
Re: (Score:2)
The wikipedia paragraph is a lot of disputed contentions. I don't have time to read wikipedia's 360 page referenced tome (at least not at this point.) It's reasonable to expect you to refer to documentation of your claims that's inbetween a paragraph of nothing and a textbook.
Landlords tend to be richer and tenants tend to be poorer. Especially in residential real estate. So, yeah, that's why I'm fine with it.
Notice I didn't take
Re: (Score:2)
Yes, someday they'll take money from me. Oh wait, they already do. And what's problem?
I'm fine paying taxes, having the money I loan subject to usury laws, and otherwise having to not dick people over.
Re: (Score:1)
That's what a subsidy is, taking from one person to give to another. Just because the government isn't the middle man in this case doesn't make it any less a subsidy, effectively.
Re: (Score:2)
The very first sentence on "subsidy" in Wikipedia starts (bold in original) "A subsidy or government incentive ..." and is redirected from "federal aid". While there may be, according to one definition of subsidy, a version that does not require the government to be involved, it is an absolute requirement for the common usage. And to insist on a more obscure usage, and using that word's more common meaning to
Re: (Score:2)
Re: (Score:2)
Also keep in mind that rent control is not usually need-based. So you can have a Facebook exec getting a rent-controlled house, while disabled, veteran, grandmother can't find an available place to even rent. The reason that it's not need based is usually political. In cities with large populations of renters, it's an easy way to score votes..."I'll cut your rent by 20%, no cost to you" -Local Politician.
Re: (Score:2)
Year please? Because the bay area has had various rent control measures throughout the years.
East Germany (Score:3, Insightful)
East Germany toying with Communism once again. Maybe this time...
Re: (Score:2)
Politicians: Maybe we'll even seize property!
Developers: Just cut red tape so we can build more.
Politicians: No!
fin
with unions and good healthcare (Score:2)
with unions and good healthcare
Re: (Score:2)
Well, the housing actually built in the GDR part of Berlin is the only one that is affordable there. You see, the problem with the affordable housing in Berlin is primarily due to gentrification. Renters are pushed out, then the flats get a luxury renovation and then the flats are sold on the market. If they can't be sold, they stay empty. Building new houses doesn't solve the problem either because, again, luxury housing meant for ownership is being built, affordable housing for renting isn't.
Re: (Score:2)
Renters are pushed out, then the flats get a luxury renovation and then the flats are sold on the market. If they can't be sold, they stay empty.
And how often does that happen, exactly? A flat which can't be sold at a price high enough to pay for the upgrades is worthless to the developer. There is no financial incentive to renovate flats only to leave them empty.
If you don't want to be "pushed out" by others able and willing to out-bid you then you need to own the property, not rent it. Rentals are always subject to fluctuations in market prices.
Re: (Score:2)
Way more often than you think. That's why squatting used to be huge in Berlin. You are thinking short term, the owners are thinking long term.
As for owning, don't be ridiculous. The majority of Germans cannot afford that. German housing is built far better than American housing but that raises the price. Add the generally low wages of the population and it results in most people renting.
Back in the day there used to be plenty of affordable public housing, most of it is gone now.
People never learn, this doesn't work. (Score:5, Insightful)
Government freezing the prices doesn't work. It never has worked. It is basic economics.
Historically these price controls are popular with the stupid people who don't realize the actual effects. They're also popular with the landowners who understand the limitations further increase property costs and get them more money.
There are a certain number of homes, apartments, and living spaces. When people want to move in but there is difficulty finding available living spaces, the amount people are willing to pay (or alternatively, the amount landlords are able to charge) goes up. Property values go up. (And on the natural flip side, when they become unpopular prices drop in an effort to find buyers/renters.) Even when new housing is built, some is more desirable and that will always gain a premium price, making property values go up.
This has been the case since forever. In olden days, property near the marketplace was popular prices went up. Property inside the city walls are more popular, so prices go up. Property near the castle, property near the city halls, property near entertainment venues, they increase in value as population increases so values go up. Property values near the commerce centers are popular, so prices go up. It has always been the case, and will always be the case. When people want something they will pay more for it, and those selling will charge more for it.
When governments artificially lock the prices, the landlords know they can get money converting the apartments into other purposes and so they stop being housing units. This further limits supply, increasing demand, driving the prices up further.
They're not making any more land, and that is the key. As long as the population is going up, prices will too. These price controls will backfire. They always backfire.
Re: (Score:2)
It seems to be a temporary measure while they come up with a more permanent fix.
Re:People never learn, this doesn't work. (Score:4, Insightful)
We know from other places that such temporary fixes are actually permanent.
Re: (Score:2)
Such as where?
Re: (Score:3)
However I don't think freezing is the best solution, it probably should allow a maximum fixed increased percentage.
You can't fight Supply and Demand. But proper governance you can smooth out the volatility in the market.
Re: (Score:2)
The real problem is that renting is just bad for most people. They would almost always be better off if they could buy property, but it all gets snapped up by buy-to-let investors.
One radical idea is to give people the right to buy the property for a fair rate. Maybe the amount that the landlord paid, adjusted for inflation.
Re: (Score:2)
The real problem is that renting is just bad for most people. They would almost always be better off if they could buy property, but it all gets snapped up by buy-to-let investors.
Often this is true, but housing bubbles are the one place where it's never true. If the house price <= 100 month's rent, you're definitely better off buying. If the house price is > 200 month's rent, you're definitely better off renting. In between it's somewhat subjective - you come out ahead if you e.g. mow your own yard and do your own handywork, but do you want to?
When everything is going up, house prices tend to go up a lot more than rents, and then crash a lot more when the party's over.
"buy
Re: (Score:2)
The point about investors is a valid one. Among the many changes of the housing market is the idea that it is no longer just an investment vehicle for the occupant, but is part of a portfolio for "global investors". In a place like Vancouver, BC, San Francisco, NY, newly built units are often just places for overseas investors to stash cash. So your difficulty in finding a place to rent is partly due to the new apartments being bought and sold like frozen orange juice or pork bellies.
I am wary of excise
Re: (Score:2)
In the UK it's not just foreign investors, it's locals too. A lot of boomers are buying up property to rent out to supplement their pensions. A second home or buy-to-let tax would really help.
Re: (Score:3)
There's nothing more permanent than a temporary fix, particularly when there are no set plans on what's going to replace it.
Re: (Score:2)
History teaches us the lesson that people never listen to the lessons of history.
The most important effect has been achieved and that is the government is doing something. It does not matter if it was good, bad, counter productive, stupid, or insane. It is just important that something/anything be done.
The next lesson is that if you do not account for the "human condition" in your projections they will never work. It's why capitalism/freemarket excels the most while monopolies/socialism/regulationism fai
Re: (Score:3)
Re: (Score:2)
What the fuck are you talking about???
So, your contention is that having a maximum set to rents causes proprety values to go up? Like, their rental apartments become more valuable when they can charge less?
I'm pretty sure zoning laws prevent you tur
Re: (Score:3)
Alternatively, the policemen, firemen, garbage collectors, etc can all just leave because they can no longer afford to live there. Then once the stinking sets in (what do you THINK will happen when nobody collects the garbage?), prices start falling, then a great fire purges the area (because no firemen) and looters take care of the rest (due to lack of police).
Then the cycle repeats. Perhaps that's why economists USED to frown on rent.
Can't you just fix that with Zoning? (Score:3)
You're right though, half measures don't work. A comprehensive approach that is properly funded is needed. But that doesn't mean we should just throw up our hands and say "Welp, we did all we could, guess it's back to homelessness, slums and tent cities for 80% of the population".
Oh, and we've been making new land [wikipedia.org] since the 30s. Anything is possible if
Re: (Score:1)
Your arguments seem logical but do you really have data points that back it up "historically" as you say? European datapoints are preferable to datapoints from similar situations in the USA, since the mentality there is a bit different in a whole lot things involving money, community, regulations, society.
Some of that already common in Germany. (Score:3)
Worked nice for me for budgeting but according to my landlord they just set a higher initial price in order to handle people living there for decades.
Re:Some of that already common in Germany. (Score:5, Informative)
I lived in the Netherlands for a while. They had rent control...and a 4 year waiting list.
So what to do if you go for work? They have a handful of uncontrolled rentals to absorb such people. The hovel I was in was about $3000/mo. but the company covered it.
Let me guess how this will shake down (Score:2)
Tokyo and Minnesota already solved this problem. (Score:5, Interesting)
We know that high rent prices are caused by high demand and low supply. Tokyo kept their rents from skyrocketing by building more housing [vox.com].
In the USA, much of the problem is caused by the high expense and absurd amount of time and risk to get a building permit. Minnesota solved this by requiring that cities decide within fifteen days whether the application is complete. The city then has sixty days to decide whether to approve or deny the application. This includes engineering studies, public outreach and so on. If within 60 days the city has not made a decision, it's an automatic approval. If the city denies the application, they must state the reasons in writing. This forces cities to streamline their permitting process [strongtowns.org].
It's ironic and sad how liberal cities keep people homeless and conservative ones heavily restrict property rights.
The problem is: Profit is literally usury by defin (Score:1, Interesting)
We in Berlin see it this way: You want to earn money? *Work for it!*
But there are leeches who think they can sit on their fat asses all day, letting the money stream, just because they can.
There is nothing wrong with them; they aren't ill, or disabled, or in a bad situation, where a social safety net benefits us all. They just sit on the bigger lever, and got no shame to abuse it.
While *we* actually have to struggle all day, to deliver them their fucking money.
No, just because you worked one hour to keep th
Lemme correct it for you ... (Score:4, Insightful)
Rent Control and Global Warming (Score:3)
Using rent control to try to deal with housing prices is like using air conditioning to deal with global warming. It only helps a few, connected people while making the entire problem worse.
Legalizing building more housing is the only solution.
On the US side in this study [chicagobooth.edu] "we calculate that increasing housing supply in New York, San Jose, and San Francisco by relaxing land use restrictions to the level of the median US city would increase the growth rate of aggregate output by 36.3 percent. In this scenario, US GDP in 2009 would be 3.7 percent higher, which translates into an additional $3,685 in average annual earnings."
Also those who oppose dense, transit & walking oriented, energy efficient citizen are carbon criminals.
News For Nerds? (Score:1)
WTF?
I actually remember when /. was relevant, before it became just socialist bullshit and month old tech "news".
Sad.
Re: (Score:3)
It's highly important news for nerds.
I'm a native to the SF Bay area. Locals here vociferously opposed the construction of new housing for decades until they caused a severe housing shortage and skyrocketing prices. The locals here decided to blame YOU (nerds) for this. Locals are VERY angry at you, because of things they did to themselves. When rent control fails, it will be your fault. You are the scapegoat, whether you're paying attention or not.
San Francisco, here we come! (Score:3)
Freezing rent is stupid for so many reasons. Sure, it sounds like it ought to make housing affordable, but consider:
First, properties have a value, and in cities like Berlin they can be worth a lot. Give it a few years and the rents will be way below market value - this massively reduces the value of the property itself. Hence, some owners will prefer to leave their properties empty - that way, they can be sold, renovated, torn down or whatever - all without messing with those yucky renters. This reduces the quantity of housing available.
Second, those properties that are rented - again, after some years the rents are way below market value. To get any sort of return on investment, the owners begins to skimp on maintenance - what does it matter, they can't charge more rent for a nice place - so the properties fall into disrepair. This reduces the quality of housing available.
tl;dr: Freezing rents may be beneficial in the short-term, but it is disastrous in the long-term. Worse, once in place, getting the vote to un-freeze the rents is nearly impossible.
Adam Smith will make you his bitch (Score:2)
Price controls don't fix prices, they just push the actual market "price" into other avenues of remuneration.
What, I can only charge $1000/mo for this apartment? Well, I have a pretty long waiting list, what will you give me to move up that waiting list?
Oh, and watch your city's property markets turn to shit, as the official line will be so punitive that nobody will invest in anything (except insofar they're wagering for the future that the government wankers who thought this up will be tossed out soon and
Re: (Score:2)
The Mietpreisbremse ( Rental Price Brake ) Laws in Germany have been quite effective.
Over the course of implementation, as compared to areas not subject to Rentbrakes, there was no noticable decrease in housing property development. (1: https://www.diw.de/de/diw_01.c... [www.diw.de] German Report)
Rent controls in Germany, are also more in depth.
Once renting, the land-lord is subject to regulations limiting the ability to raise your rent.
Price resets happen should you move out.
The price-brake system sets the range of re