7 ms·

Berlin has a housing shortage, and these measures are just workarounds. Before the refugee crisis, a growth of 40.000 people per year was expected, vs. plans to

by andor 11y ago

Berlin has a housing shortage, and these measures are just workarounds. Before the refugee crisis, a growth of 40.000 people per year was expected, vs. plans to build 10.000 new apartments. The decision against developing the the abandoned Tempelhof airport only makes it worse, and shows some of the social problems in the city. Bear in mind that everybody who got to vote on the referendum already lived in Berlin: "Though about 20 per cent of the development was to be reserved for affordable housing, the locals decided to keep their expansive city oasis free of any new buildings. The rationale was that increased supply often only means more luxury dwellings and does not address affordability." "Luxury" here doesn't mean huge, it just means "well built, nice kitchen, 14 EUR/m^2". It's like saying: "I don't want anybody else to buy a car, because they might get a Mercedes, which I cannot afford." The social housing system is also quite unfair, if you ask me. Social housing apartments are in regular buildings, not separated from the rest. The idea is to counter gentrification, and keep the population mixed. You are only eligible below some margin of income. So far so good, but if you work and earn one Euro too much, you need to pay twice the rent, for the exact same apartment.

Loque 11y ago
What source are you using for the housing shortage? I lived there for a while and in my experience this was not the case - interested to learn more. Edit: did some searching: http://www.thelocal.de/20150819/germany-building-homes-in-wrong-places-experts http://www.thelocal.de/20150819/germany-building-homes-in-wr... Quite interesting stuff.
- lispm 11y ago
  If the article does not make it clear, in East Germany there are many many cities with a shortage of citizens - not a shortage of houses. http://www.welt.de/wirtschaft/article146994158/So-schnell-entvoelkert-Ostdeutschland.html http://www.welt.de/wirtschaft/article146994158/So-schnell-en... Five Bundesländer there had the population reduced from 14.5 Million down to 12.5 million...
tptacek 11y ago
What's the alternative to mixed-income housing? The US tried segregated low-income housing for decades, and the result was a disaster. The new system, called Section 8, is a privatized voucher system; it doesn't give tenants lower rents, but by subsidizing rents directly, it has the same fairness impact.
- lfam 11y ago
  I think the issue in most US cities is capture of zoning boards by property owners and developers. They have made it impossible for supply to meet demand. For example, new apartment buildings in New York are required to include parking if they are taller than a certain height (I think 6 stories). That drives up the cost unnecessarily, in my opinion.
- andor 11y ago
  Mixed-income housing is not the problem, the implementation is: earn a bit more, pay a lot more. There's a similar argument against unemployment benefits: in some cases, unemployed people can earn less by accepting a job. I don't have a solution, but I think a basic income would set better incentives.
  - nosuchthing 11y ago
    Why not set a gradient percentage of income against the cost of social/public housing? The hard cut off for social housing benefits incentivizes keeping income below that threshold to maintain the benefit. Basic income does nothing to increase housing supply, so urban rents would increase as a result.
    - TheSpiceIsLife 11y ago
      Presumably the people who set these hard-cuttoffs aren't totally oblivious to the results, Australia has a similar problem with social welfare payments. My suspicion is this is by design because a certain level of unemployment is required to keep labour costs down - or so the theory goes. I've met a lot of people who don't want to work, some because they're slackers and some because they'd have to get full time employment because anything casual they're likely to get wouldn't be worthwhile as it eats in to their welfare payments. So the system 'works' for some definition of the term 'works'. It probably also catches a lot of people unnecessarily too.
Roodgorf 11y ago
I don't exactly agree with the rationale, but I don't think your analogy about luxury housing accurately portrays the problem. Larger, better built housing with extra amenities will cost more and almost certainly gentrify the neighborhood. I think the idea against allowing luxury housing is more that this would only help the already affluent population while simultaneously driving up housing costs in the area.
- seivan 11y ago
  Larger better built houses means those people who want that will give up their current place for that. It will even out and works better than the current system. Granted I'm not from Berlin, but our situation (Stockholm) is exactly the same and the only way out is taking on the risk of buying property in an already over-heated bubble. edit: There is an alternative and that is to find a second hand contracts where you will have to move out in a year because most co-op boards won't allow the owner to rent out for more than a year.
  - hussong 11y ago
    Problem is that their old place will go back to the market on a new lease and, in popular areas, twice the rent. Also, if you've been in your current apartment for 5+ years, changing apartments effectively means double rent for you. Everybody I know who has an OK apartment in Berlin stays there, because an extra room etc. would mean 500-1000 Euros rent increase.
    - Kalium 11y ago
      If there is sufficient supply, the old place won't go back on the market for a much higher rent. What you describe is what happens when you build a handful of units in the midst of a major shortage. Have you been following the events surrounding the problems with rising rents in San Francisco? What you're describing is what has already happened here. I cannot overstate the importance of avoiding the mistakes of SF. Refusing to build in a place people want to live in will not lower rents. It only drives gentrification, evictions, and higher rents.
- 11y ago
mahyarm 11y ago
I'm surprised they made the basic mistake of not making the benefit progressive vs. binary.
maljx 11y ago
It has a shortage, but a very recent shortage. Compared to other cities in Europe - Stockholm, London, Paris it's still very easy to find somewhere to live here. Especially if you have money to pay.
- odiroot 11y ago
  Only if you have money to pay. If you earn average IT salary you need to prepare for weeks, maybe even months searching for a flat.
odiroot 11y ago
This is really true. Also what is really bad for all the startup people in here that you are in the worst bracket to be. You cannot get a social housing -- you earn too much. But than again you (mostly) cannot afford going over 70-80sqm, especially if you are only earner in the family. This means you're in the most competitive area and for every flat viewing it's you against 30, 40 or even 100 other suckers.
rorykoehler 11y ago
I voted against developing on tempelhof because there are 101 better places in the city to do it that won't take away green space. Berlin could start building up a bit more for one.
anarazel 11y ago
Meh. It's not like Berlin currently has actually a shortage of space to build. Remember, Berlin currently has about the same land area as NYC, at less than half the population.
- odiroot 11y ago
  It also has about a million less than pre-war Berlin. The only thing is during those times the city was criticized for being an overcrowded concrete (well, cobblestoned) dump with many slums. The city needs to build out instead of up. Current infrastructure can barely hold population density as it is today.
- odiroot 11y ago
  It also has about a million less than pre-war Berlin. The only thing is during those times the city was criticized for being an overcrowded concrete (well, cobblestoned) dump with many slums. The city needs to build out instead of up. Current infrastructure can barely hold population density as it is today.
spangry 11y ago
Social housing schemes are very inefficient and, ironically, further entrap their participants in poverty. I can't speak for Germany, but in Australia most state social housing schemes are heavily oversubscribed, and so are rationed. A new participant can spend years on a waiting list before finally getting access to rent-subsidised social housing. And once you're in your rent-subsidised government owned dwelling, you're tied to that location. If you're offered a higher paying job that would require you to move, chances are you wouldn't because you'd either: (a) have to go to the back of the rationing queue, or (b) lose access to social housing entirely In other words, the effective marginal tax rate on additional earnings are well over 100% if relocation is required. Therefore, the rational financial decision is to stick with your lower paying job (or unemployment) to hold on to your rent-subsidy. Hence the social housing 'poverty trap'. From a 'whole of economy' perspective it's even worse. In the aggregate, social housing impedes labour mobility, in turn lowering economic output and increasing the rate of structural unemployment/under-employment. Furthermore, it saps land market efficiency, as older social housing locations (that were previously on the outskirts of the CBD) are now in 'inner-city' areas (due to metropolitan expansion). As a result, land that could be put to much more productive use is tied up by social housing tenements. Although the above is a bit of a simplification, in the final analysis social housing is a complete policy disaster that creates bad economic outcomes for both the financially disadvantaged and society overall. It would be far better if social housing (and the land it is situated on) was sold on the private market (at market value) and the money put towards direct rent subsidies (that taper as income rises). Although this still causes higher effective marginal tax rates (due to payment tapering), the system can be designed so that EMTRs do not come close to 100% and there are actually positive incentives for those receiving rent subsidies to relocate if offered a higher paying job.

by andor 11y ago

Loque 11y ago

What source are you using for the housing shortage? I lived there for a while and in my experience this was not the case - interested to learn more. Edit: did some searching: http://www.thelocal.de/20150819/germany-building-homes-in-wrong-places-experts http://www.thelocal.de/20150819/germany-building-homes-in-wr... Quite interesting stuff.

lispm 11y ago
If the article does not make it clear, in East Germany there are many many cities with a shortage of citizens - not a shortage of houses. http://www.welt.de/wirtschaft/article146994158/So-schnell-entvoelkert-Ostdeutschland.html http://www.welt.de/wirtschaft/article146994158/So-schnell-en... Five Bundesländer there had the population reduced from 14.5 Million down to 12.5 million...

tptacek 11y ago

What's the alternative to mixed-income housing? The US tried segregated low-income housing for decades, and the result was a disaster. The new system, called Section 8, is a privatized voucher system; it doesn't give tenants lower rents, but by subsidizing rents directly, it has the same fairness impact.

lfam 11y ago
I think the issue in most US cities is capture of zoning boards by property owners and developers. They have made it impossible for supply to meet demand. For example, new apartment buildings in New York are required to include parking if they are taller than a certain height (I think 6 stories). That drives up the cost unnecessarily, in my opinion.
andor 11y ago
Mixed-income housing is not the problem, the implementation is: earn a bit more, pay a lot more. There's a similar argument against unemployment benefits: in some cases, unemployed people can earn less by accepting a job. I don't have a solution, but I think a basic income would set better incentives.
- nosuchthing 11y ago
  Why not set a gradient percentage of income against the cost of social/public housing? The hard cut off for social housing benefits incentivizes keeping income below that threshold to maintain the benefit. Basic income does nothing to increase housing supply, so urban rents would increase as a result.
  - TheSpiceIsLife 11y ago
    Presumably the people who set these hard-cuttoffs aren't totally oblivious to the results, Australia has a similar problem with social welfare payments. My suspicion is this is by design because a certain level of unemployment is required to keep labour costs down - or so the theory goes. I've met a lot of people who don't want to work, some because they're slackers and some because they'd have to get full time employment because anything casual they're likely to get wouldn't be worthwhile as it eats in to their welfare payments. So the system 'works' for some definition of the term 'works'. It probably also catches a lot of people unnecessarily too.

Roodgorf 11y ago

I don't exactly agree with the rationale, but I don't think your analogy about luxury housing accurately portrays the problem. Larger, better built housing with extra amenities will cost more and almost certainly gentrify the neighborhood. I think the idea against allowing luxury housing is more that this would only help the already affluent population while simultaneously driving up housing costs in the area.

seivan 11y ago
Larger better built houses means those people who want that will give up their current place for that. It will even out and works better than the current system. Granted I'm not from Berlin, but our situation (Stockholm) is exactly the same and the only way out is taking on the risk of buying property in an already over-heated bubble. edit: There is an alternative and that is to find a second hand contracts where you will have to move out in a year because most co-op boards won't allow the owner to rent out for more than a year.
- hussong 11y ago
  Problem is that their old place will go back to the market on a new lease and, in popular areas, twice the rent. Also, if you've been in your current apartment for 5+ years, changing apartments effectively means double rent for you. Everybody I know who has an OK apartment in Berlin stays there, because an extra room etc. would mean 500-1000 Euros rent increase.
  - Kalium 11y ago
    If there is sufficient supply, the old place won't go back on the market for a much higher rent. What you describe is what happens when you build a handful of units in the midst of a major shortage. Have you been following the events surrounding the problems with rising rents in San Francisco? What you're describing is what has already happened here. I cannot overstate the importance of avoiding the mistakes of SF. Refusing to build in a place people want to live in will not lower rents. It only drives gentrification, evictions, and higher rents.
11y ago

mahyarm 11y ago

I'm surprised they made the basic mistake of not making the benefit progressive vs. binary.

maljx 11y ago

It has a shortage, but a very recent shortage. Compared to other cities in Europe - Stockholm, London, Paris it's still very easy to find somewhere to live here. Especially if you have money to pay.

odiroot 11y ago
Only if you have money to pay. If you earn average IT salary you need to prepare for weeks, maybe even months searching for a flat.

odiroot 11y ago

This is really true. Also what is really bad for all the startup people in here that you are in the worst bracket to be. You cannot get a social housing -- you earn too much. But than again you (mostly) cannot afford going over 70-80sqm, especially if you are only earner in the family. This means you're in the most competitive area and for every flat viewing it's you against 30, 40 or even 100 other suckers.

rorykoehler 11y ago

I voted against developing on tempelhof because there are 101 better places in the city to do it that won't take away green space. Berlin could start building up a bit more for one.

anarazel 11y ago

Meh. It's not like Berlin currently has actually a shortage of space to build. Remember, Berlin currently has about the same land area as NYC, at less than half the population.

odiroot 11y ago
It also has about a million less than pre-war Berlin. The only thing is during those times the city was criticized for being an overcrowded concrete (well, cobblestoned) dump with many slums. The city needs to build out instead of up. Current infrastructure can barely hold population density as it is today.
odiroot 11y ago
It also has about a million less than pre-war Berlin. The only thing is during those times the city was criticized for being an overcrowded concrete (well, cobblestoned) dump with many slums. The city needs to build out instead of up. Current infrastructure can barely hold population density as it is today.

spangry 11y ago

Social housing schemes are very inefficient and, ironically, further entrap their participants in poverty. I can't speak for Germany, but in Australia most state social housing schemes are heavily oversubscribed, and so are rationed. A new participant can spend years on a waiting list before finally getting access to rent-subsidised social housing. And once you're in your rent-subsidised government owned dwelling, you're tied to that location. If you're offered a higher paying job that would require you to move, chances are you wouldn't because you'd either: (a) have to go to the back of the rationing queue, or (b) lose access to social housing entirely In other words, the effective marginal tax rate on additional earnings are well over 100% if relocation is required. Therefore, the rational financial decision is to stick with your lower paying job (or unemployment) to hold on to your rent-subsidy. Hence the social housing 'poverty trap'. From a 'whole of economy' perspective it's even worse. In the aggregate, social housing impedes labour mobility, in turn lowering economic output and increasing the rate of structural unemployment/under-employment. Furthermore, it saps land market efficiency, as older social housing locations (that were previously on the outskirts of the CBD) are now in 'inner-city' areas (due to metropolitan expansion). As a result, land that could be put to much more productive use is tied up by social housing tenements. Although the above is a bit of a simplification, in the final analysis social housing is a complete policy disaster that creates bad economic outcomes for both the financially disadvantaged and society overall. It would be far better if social housing (and the land it is situated on) was sold on the private market (at market value) and the money put towards direct rent subsidies (that taper as income rises). Although this still causes higher effective marginal tax rates (due to payment tapering), the system can be designed so that EMTRs do not come close to 100% and there are actually positive incentives for those receiving rent subsidies to relocate if offered a higher paying job.