8 ms·

The dynamic is a little different than in most other cities. What's really happening here is that cheap rent is a kind of entitlement in Berlin: rent controls e

by jvm 10y ago

The dynamic is a little different than in most other cities. What's really happening here is that cheap rent is a kind of entitlement in Berlin: rent controls extend across tenants so getting an apartment is really about persuading a landlord to take you rather than bidding at an appropriate price point. AirBnB gets around this by allowing rentals at arbitrary price points. This is true whether it's an owner or a renter doing the leasing, which is very different from other markets in which it's mostly a concern of renters abusing their leases. > "The Berlin Senate’s ruling nonetheless reflects a general feeling across a city in which homes are getting harder to find: Berliners have had enough and they want their city back." Translation: There is no pricing mechanism on rents in the city and it is becoming increasingly impossible to find an apartment. While it's certainly true that AirBnB essentially allows landlords to flout the law, it's worth noting that the adverse effects of price ceilings on supply are the root cause of Berlin's problems and this will not solve the underlying problem of rents being far from equilibrium.

jvm 10y ago
More on the slow-moving train wreck here [1]: http://www.citylab.com/housing/2015/07/berlins-brand-new-rent-control-laws-are-already-working/398087/ http://www.citylab.com/housing/2015/07/berlins-brand-new-ren... TL;DR they're also placing tight ceilings on new development. [1] This article is supportive but seems oblivious to the supply-side effects.
teh 10y ago
I'm not sure it's that simple. In London we have no limit and it's now one of the most expensive places on this planet and despite that it's increasingly impossible to find an apartment. Maybe there is some other cause (e.g. everyone wants to live in a city now)?
- nedwin 10y ago
  How flexible are the density and new development policies? Increased demand with no supply = increased prices and low supply.
- xxpor 10y ago
  Yeah, the terrible zoning.
- laurencerowe 10y ago
  In London it really is down to supply and demand. The UK economy is highly centralized in London and the South East, population in the metropolitan area is now at record levels having shot past the pre-War peak in the past few years. (The population of the South East never really declined but had shifted to the commuter belt.) For many careers you really have to move there if you want a good job. Meanwhile many fewer homes are being built. The largest drop has been in building by local authorities, which used to account for almost half of all new builds before Thatcher brought things to a halt in in the 1980's by selling off social housing and preventing councils from investing the proceeds. (See: http://www.lrb.co.uk/v36/n01/james-meek/where-will-we-live http://www.lrb.co.uk/v36/n01/james-meek/where-will-we-live) As real wages have stagnated for most people, multiple administrations have propped up demand through ever inflating house prices. People feel richer when their home goes up in value but this wealth is illusory, nothing new has been created, only a generational shift in capital as young people are forced to fork out ever more of their income in rent.
  - branchless 10y ago
    Planning permission is hard to get and greatly enhances land value. It is not supply and demand. Credit bubble with govt underwriting prices.
    - laurencerowe 10y ago
      While credit conditions are a factor in property prices they don't help explain the huge increase in London rents over the past 10 years which have gone up far faster than incomes. The private rental market in the UK is all short term lets, after the first year the landlord is free to adjust the rent. With council housing now largely gone it's an unanchored free market. Restricting supply (e.g. through difficulty obtaining planning permission) while demand increases does of course drive up rents. Property prices are a function of interest rates and rents. Credit conditions come into play here in determining how much a prospective home owner or buy-to-let investor can borrow and pay for a property.
      - branchless 10y ago
danielweber 10y ago
Capitalism always exists, whether you want to admit it or not. You can pretend there are no such things as prices by adding more and more epicycles to your model, or just admit they exist and then (for example) have a welfare state to compensate the non-winners.
- andy_ppp 10y ago
  The easiest solution is always capitalism, I agree, I'm fairly certain however it's harder to find somewhere to rent in London and paying more in Berlin still reaps results (having lived there as an IT contractor for 4 months from London I should know). I think these things can be solved in Berlin much more easily than most capital cities (i.e. there is substantial space to build new homes that simply doesn't exist in London or New York say). Simply saying "be more capitalist" might work, but I'd say build more quality homes on all the scratchy pieces of land that exist round Berlin is an equally good option above firing people into the weird world of London property. Finally the AirBnB/rentals thing is a result I'd guess of the massive number of people who hate having tourists traipsing through their buildings. My experience at least centrally was of large shared blocks of high quality flats and a lot of suspicion around strangers being granted entry to said gated communities.
  - quanticle 10y ago
    Being more capitalist is how you create the incentives that result in more quality homes being built on the scratchy pieces of land that exist around Berlin.
    - disposeofnick9 10y ago
      It doesn't, actually. In the US, there are just a few apartment consortiums which own the lion's share of the fleet of newer construction units. Anarchist capitalism encourage supply-side monopolist hegemony, not competition. Competition is undesirable for capitalists when supplying goods and services and optimally minimized, it is desirable by buyers but this is mostly irrelevant in an artificially-controlled supply market where demand is inelastic. If Hyperloop were rolled out across most continents, empty land could be "closer" to economic centers and housing supply would be effectively increased by widening the commute radius, making it more affordable.
doener 10y ago
A free market price would not fix anything - every tiny bit of flatland is already used. What you are saying is basically: Only rich people should have the right to live in central districts. I disagree and so do most Berliners.
- bobcostas55 10y ago
  Berlin has a population density ~1/3rd of New York's and a bit more than half of London's. Whether land is used or not is irrelevant, the question is how it's used. Also I'm sure there are a million absurd zoning/building restrictions, they always go hand in hand with the rent controls.
- d_t_w 10y ago
  What mechanism do you use to choose who can live in a central district, if not the ability to pay market rent? Right to live where you are born? That adversely affects anyone not born in a central district.
  - tehrei 10y ago
    Random allotment (essentially first come first serve) is a lot more fair than allotment by power of money. If it's not about being fair to people, then why are you even here.
  - sgift 10y ago
    Right to live where you are born would be possible - it is neither better nor worse than the current mechanism, just different. But the question remains if there's a way to change market rate, so more people can pay it. Berlin seems to be trying that by banning things which aren't desirable from their perspective. > Right to live where you are born? That adversely affects anyone not born in a central district. Thinking about it, this reminds me of the question of immigration. People usually say that one shouldn't be allowed to immigrate wherever he wants and/or that politicans are beholden to the people of their country, not the whole world. So .. what's the difference between a city and a country here? Why should the city council not put the wishes of those born there first?

by jvm 10y ago

jvm 10y ago

More on the slow-moving train wreck here [1]: http://www.citylab.com/housing/2015/07/berlins-brand-new-rent-control-laws-are-already-working/398087/ http://www.citylab.com/housing/2015/07/berlins-brand-new-ren... TL;DR they're also placing tight ceilings on new development. [1] This article is supportive but seems oblivious to the supply-side effects.

teh 10y ago

I'm not sure it's that simple. In London we have no limit and it's now one of the most expensive places on this planet and despite that it's increasingly impossible to find an apartment. Maybe there is some other cause (e.g. everyone wants to live in a city now)?

nedwin 10y ago
How flexible are the density and new development policies? Increased demand with no supply = increased prices and low supply.
xxpor 10y ago
Yeah, the terrible zoning.
laurencerowe 10y ago
In London it really is down to supply and demand. The UK economy is highly centralized in London and the South East, population in the metropolitan area is now at record levels having shot past the pre-War peak in the past few years. (The population of the South East never really declined but had shifted to the commuter belt.) For many careers you really have to move there if you want a good job. Meanwhile many fewer homes are being built. The largest drop has been in building by local authorities, which used to account for almost half of all new builds before Thatcher brought things to a halt in in the 1980's by selling off social housing and preventing councils from investing the proceeds. (See: http://www.lrb.co.uk/v36/n01/james-meek/where-will-we-live http://www.lrb.co.uk/v36/n01/james-meek/where-will-we-live) As real wages have stagnated for most people, multiple administrations have propped up demand through ever inflating house prices. People feel richer when their home goes up in value but this wealth is illusory, nothing new has been created, only a generational shift in capital as young people are forced to fork out ever more of their income in rent.
- branchless 10y ago
  Planning permission is hard to get and greatly enhances land value. It is not supply and demand. Credit bubble with govt underwriting prices.
  - laurencerowe 10y ago
    While credit conditions are a factor in property prices they don't help explain the huge increase in London rents over the past 10 years which have gone up far faster than incomes. The private rental market in the UK is all short term lets, after the first year the landlord is free to adjust the rent. With council housing now largely gone it's an unanchored free market. Restricting supply (e.g. through difficulty obtaining planning permission) while demand increases does of course drive up rents. Property prices are a function of interest rates and rents. Credit conditions come into play here in determining how much a prospective home owner or buy-to-let investor can borrow and pay for a property.
    - branchless 10y ago

danielweber 10y ago

Capitalism always exists, whether you want to admit it or not. You can pretend there are no such things as prices by adding more and more epicycles to your model, or just admit they exist and then (for example) have a welfare state to compensate the non-winners.

andy_ppp 10y ago
The easiest solution is always capitalism, I agree, I'm fairly certain however it's harder to find somewhere to rent in London and paying more in Berlin still reaps results (having lived there as an IT contractor for 4 months from London I should know). I think these things can be solved in Berlin much more easily than most capital cities (i.e. there is substantial space to build new homes that simply doesn't exist in London or New York say). Simply saying "be more capitalist" might work, but I'd say build more quality homes on all the scratchy pieces of land that exist round Berlin is an equally good option above firing people into the weird world of London property. Finally the AirBnB/rentals thing is a result I'd guess of the massive number of people who hate having tourists traipsing through their buildings. My experience at least centrally was of large shared blocks of high quality flats and a lot of suspicion around strangers being granted entry to said gated communities.
- quanticle 10y ago
  Being more capitalist is how you create the incentives that result in more quality homes being built on the scratchy pieces of land that exist around Berlin.
  - disposeofnick9 10y ago
    It doesn't, actually. In the US, there are just a few apartment consortiums which own the lion's share of the fleet of newer construction units. Anarchist capitalism encourage supply-side monopolist hegemony, not competition. Competition is undesirable for capitalists when supplying goods and services and optimally minimized, it is desirable by buyers but this is mostly irrelevant in an artificially-controlled supply market where demand is inelastic. If Hyperloop were rolled out across most continents, empty land could be "closer" to economic centers and housing supply would be effectively increased by widening the commute radius, making it more affordable.

doener 10y ago

A free market price would not fix anything - every tiny bit of flatland is already used. What you are saying is basically: Only rich people should have the right to live in central districts. I disagree and so do most Berliners.

bobcostas55 10y ago
Berlin has a population density ~1/3rd of New York's and a bit more than half of London's. Whether land is used or not is irrelevant, the question is how it's used. Also I'm sure there are a million absurd zoning/building restrictions, they always go hand in hand with the rent controls.
d_t_w 10y ago
What mechanism do you use to choose who can live in a central district, if not the ability to pay market rent? Right to live where you are born? That adversely affects anyone not born in a central district.
- tehrei 10y ago
  Random allotment (essentially first come first serve) is a lot more fair than allotment by power of money. If it's not about being fair to people, then why are you even here.
- sgift 10y ago
  Right to live where you are born would be possible - it is neither better nor worse than the current mechanism, just different. But the question remains if there's a way to change market rate, so more people can pay it. Berlin seems to be trying that by banning things which aren't desirable from their perspective. > Right to live where you are born? That adversely affects anyone not born in a central district. Thinking about it, this reminds me of the question of immigration. People usually say that one shouldn't be allowed to immigrate wherever he wants and/or that politicans are beholden to the people of their country, not the whole world. So .. what's the difference between a city and a country here? Why should the city council not put the wishes of those born there first?