4 ms·

Your taxes do not fund "this" exactly. It's not like Berlin govt will let people live in those places for free, just at an affordable price point. They can do t

Your taxes do not fund "this" exactly. It's not like Berlin govt will let people live in those places for free, just at an affordable price point. They can do this because they are not oriented towards maximum profit, unlike private investors. Bundesland Berlin being a landlord in all this might end up effectively slightly subsidizing some of the rents in some more expensive-to-acquire-and-maintain buildings but operate at a slight margin in other cheaper buildings. In the end, if they do it right (and I admit that's a big if) they should be operating close to break-even, probably with a small profit to build some reserves for unexpected future costs. Instead of complaining that Berlin tries to do something (too much) against rent price hikes and gentrification, complain instead that "cities like Munich, Frankfurt or Hamburg" do not do enough to prevent rent price hikes.

anothercomment 10y ago
If the government rents out places below market races, it is subsidizing those renters. It is leaving money on the table that it could use to pay for things that it pays for with taxpayer money from Munich instead.
- posterboy 10y ago
  If the price is equal to the utility cost, then it isn't below market rate, but exactly matching it. The other prices are over market rate.
  - anothercomment 10y ago
    How do you define utility cost - isn't it kind of equivalent to market rate (what it is worth for people to pay)? I can not really make sense of your statement? If the prices are over market rate, how to they find renters?
    - posterboy 10y ago
      Utility cost was the wrong idiom, I meant, like, the overall expenses. Keep in mind the OP before you > ... and that's a big if ... In other words, If the government can operate housing over a long term at break-even, a stabilizing market needs to be converging towards that limit, otherwise they couldn't break even. I was implicitly limiting my remark to the market rate of the expenses, not the income of the operation. The same can be applied to the other side of the equation, the price the inhabitants have to pay. The market can be stable only if both sides match. Of course that's a gross simplification, but so is the term market rate.
edblarney 10y ago
"Your taxes do not fund "this" exactly. It's not like Berlin govt will let people live in those places for free, just at an affordable price point. " It's a costly subsidization, taxpayers are definitely subsidizing it. 'Gentrification' and 'higher rents' are not necessarily the same thing. Berlin is becoming more prosperous - that's a good thing, it's what we all want. But it means there's going to be a shifting of neighbourhoods here and there. Particularly, the most accessible properties will be in most demand. I don't think Berlin has the same problem as the Valley with vastly disproportionate incomes, or Toronto with massive influence of foreign dollars and large numbers of newcomers + low interest rates. I stayed in Berlin for a while, and I can assure you there are tons of fairly inexpensive places to live - they just aren't in the most choice neighbourhoods. If there were truly a dirth of affordable places in the area, then there might be cause for concern ...
edblarney 10y ago
" complain instead that "cities like Munich, Frankfurt or Hamburg" do not do enough to prevent rent price hikes." Rent is undeniably a function of the market. Setting rent prices is like fixing bread, milk egg and gasoline prices. Of course, at the margins, in specific cases, some things can be done. Surely things like limiting how much rent can be raised in a year, maintaining renters rights etc. - or even zoning to make sure that there are types of housing that will facilitate different types of people ... But there isn't really a huge problem. Even in Frankfurt and Munich there are tons of low-cost places - just not right downtown. Tons of decent flats around town.

anothercomment 10y ago

If the government rents out places below market races, it is subsidizing those renters. It is leaving money on the table that it could use to pay for things that it pays for with taxpayer money from Munich instead.

posterboy 10y ago
If the price is equal to the utility cost, then it isn't below market rate, but exactly matching it. The other prices are over market rate.
- anothercomment 10y ago
  How do you define utility cost - isn't it kind of equivalent to market rate (what it is worth for people to pay)? I can not really make sense of your statement? If the prices are over market rate, how to they find renters?
  - posterboy 10y ago
    Utility cost was the wrong idiom, I meant, like, the overall expenses. Keep in mind the OP before you > ... and that's a big if ... In other words, If the government can operate housing over a long term at break-even, a stabilizing market needs to be converging towards that limit, otherwise they couldn't break even. I was implicitly limiting my remark to the market rate of the expenses, not the income of the operation. The same can be applied to the other side of the equation, the price the inhabitants have to pay. The market can be stable only if both sides match. Of course that's a gross simplification, but so is the term market rate.

edblarney 10y ago

"Your taxes do not fund "this" exactly. It's not like Berlin govt will let people live in those places for free, just at an affordable price point. " It's a costly subsidization, taxpayers are definitely subsidizing it. 'Gentrification' and 'higher rents' are not necessarily the same thing. Berlin is becoming more prosperous - that's a good thing, it's what we all want. But it means there's going to be a shifting of neighbourhoods here and there. Particularly, the most accessible properties will be in most demand. I don't think Berlin has the same problem as the Valley with vastly disproportionate incomes, or Toronto with massive influence of foreign dollars and large numbers of newcomers + low interest rates. I stayed in Berlin for a while, and I can assure you there are tons of fairly inexpensive places to live - they just aren't in the most choice neighbourhoods. If there were truly a dirth of affordable places in the area, then there might be cause for concern ...

edblarney 10y ago

" complain instead that "cities like Munich, Frankfurt or Hamburg" do not do enough to prevent rent price hikes." Rent is undeniably a function of the market. Setting rent prices is like fixing bread, milk egg and gasoline prices. Of course, at the margins, in specific cases, some things can be done. Surely things like limiting how much rent can be raised in a year, maintaining renters rights etc. - or even zoning to make sure that there are types of housing that will facilitate different types of people ... But there isn't really a huge problem. Even in Frankfurt and Munich there are tons of low-cost places - just not right downtown. Tons of decent flats around town.