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If there are indeed buildings being constructed for the sole purpose to "stash cash" as you say, then the law against misuse of real estate property ("Gesetz ge

If there are indeed buildings being constructed for the sole purpose to "stash cash" as you say, then the law against misuse of real estate property ("Gesetz gegen Zweckentfremdung") can and should be applied. However, it doubt that this is the case in significant quantities. My argument is a principled one: the city/state/fed should strive to let the market sort it out. That sounds neo-lib, but should be easy to achieve in times of lack of alternate investment possibilities. And while they're at it, they should make it so that investment in housing becomes a good investment opportunity for the middle class, helping with the demographic problems before us. Proposing the state should invest in housing is really just the civil society declaring bankruptcy, and leads to corrupt and unsustainable structures, as happened in the 1970s in Germany (or worse, go ask women of the former east block what they had to do to get housing). The problems (if they are real) are entirely the consequence of decades of misguided policies in construction and housing/renting laws. And also a consequence of lack of sustainable investment opportunities (ECB "QE" and negative interest rates) so people are turning to real estate.

bogomipz 10y ago
>"If there are indeed buildings being constructed for the sole purpose to "stash cash" as you say, then the law against misuse of real estate property" I wasn't speaking about Berlin specifically for that comment only that its happening in many places in the world - San Francisco, New York, London. I linked to two articles describing it different cities. So the "market will sort itself out" neo-lib doctrine you mentioned has largely failed working class and indeed middle class which are the majority compared to the wealthy.
- tannhaeuser 10y ago
  Ok, because there are cases of real estate in NYC, SF, and London being bought to merely keep money from loosing value you conclude that capitalism has failed? The reason for this real estate bubble (money loosing value) being the ECB's and the Fed's inflationary policies and low interest rates (hence a consequence of state action)? And as a remedy you propose the state or city should buy real estate to keep housing affordable (rather than changing regulations)? So that some pseudo hipsters in Berlin's fashion quarters can keep living on social welfare (ok I'm taking that one back :) but I can tell you the taxpayers of Southern Germany, Hesse, Hamburg (and Saxony I believe) aren't amused to finance Berlin decadence [1]. I can only appeal to your computer science skills to analyze the situation rationally, rather than buying into social-romantic nonsense. [1]: since over half the residents of Berlin have their hands in the pocket of the state in one form or another, the strategy of the Senate of Berlin seems to be to "buy" their electorate with money they get from other German countries, when actually Berlin rents are much lower than in all other big German cities
  - bogomipz 10y ago
    >"Ok, because there are cases of real estate in NYC, SF, and London being bought to merely keep money from loosing value you conclude that capitalism has failed?" Nice try, nowhere did I even remotely find fault with capitalism. Capitalism and a urban planning are two completely orthogonal concepts. You seem to be conflating the two an maligning a vote for some kind of housing policy as a vote against capitalism which is just ridiculous. They are not mutually exclusive. >"The reason for this real estate bubble (money loosing value) being the ECB's and the Fed's inflationary policies" And try to remember why central banks had to loosen the money supply. Because in 2008 the global financial system was brought to its knees by banks who believed that "the market will look after itself." And who bailed those institutions out? The taxpayers did what amounted into a systems of "privatize the rewards and socialize the risks." Typical neo-liberal bullshit hypocrisy, you have no problem accusing everyone else of "social-romantic nonsense" though. >"I can only appeal to your computer science skills to analyze the situation rationally" Spoken like a true technocrat, your'e right there's probably a good formula to explain the problem away. >"So that some pseudo hipsters in Berlin's fashion quarters can keep living on social welfare" So you have just reduced a multi-ethnic city with a population of 3 million people to a single narrow demographic. You are obviously trolling.
    - tannhaeuser 10y ago
      I was just kidding re: Berliners. Concerning the so-called financial crisis: I remember it all started with sub-prime real estate credits in the US, the reason for their existence being politically motivated ("everyone should be able to afford housing" or, less favorable, "we're going to buy our electorate by keeping interest rates low")
- kjksf 10y ago
  This is a symptom of the disease, not the cause. I can't speak to other places but in SF the disease is ridiculous zoning. City doesn't allow dense/tall buildings despite plenty of developers would be happy to build them because there is demand for it. It also happens to be an attractive place to be so every year we have more people coming in than new apartments being built so rent and cost of houses raises every year faster than in other places. If you were a rational investor, would you rather buy a house in SF, where the price will raise faster than S&P 500 or in Kentucky, where it'll remain the same? Rational investing strategies make housing even less available, prices going up even faster, creating a vicious circle. Note, however, that the only way to get out of this is to allow construction keep pace with population growth, as it mostly happened in Seattle in the past 5-10 years. If house prices will not rise then people will not be using them as investments. Free market is capable of sorting this out. It didn't happen because the market isn't free because the government of the city of San Francisco doesn't allow it to be by responding to one of the highest population growths in the nation with one of the most restrictive zoning in the nation and trying to "fix" the problem with rent control. You don't have to be a Nobel-winning economist to see how that leads to disaster but if it makes a difference, Noble-winning economists agree that restrictive zoning and rent control inevitably leads to disaster.
- Arizhel 10y ago
  I fail to see how neo-lib doctrine has failed in this instance. If the middle class is priced out of a certain area, then fine, they go move somewhere else. We see this in NYC today: lots of businesses and restaurants have closed shop and left Manhattan because the real estate values (rents) are too high, and the people who shop there are moving out. Instead, Brooklyn is now the hip place where all the good restaurants are opening, as rents are cheaper there. Many employers are moving over there too. So what exactly is the problem? There seems to be an underlying assumption to your writing that it's somehow a "disaster" if a city (or in this case, one district of a big city) loses its productive members and just has a bunch of wealthy people holding property there. Why is it? Sure, it sucks if you're middle class and can't afford the rent there, but you're free to move somewhere cheaper. Then businesses will have to pay higher wages to get service workers to commute farther, and if that fails, they'll just close shop or move to be near the workers. If it gets bad enough, the property values in the city (or district) will collapse, a bunch of rich bastards will lose a lot of money, and things will eventually return to normal. If there's any government intervention needed, it's to encourage companies to move to where the workers are, perhaps with tax deductions. But cities already do that kind of thing. And don't forget, cities are in competition with each other. So cities which do a better job of managing themselves and doing urban planning to make sure service workers can live there are going to do better long-term than cities which don't. So I can see how municipalities have a good argument for getting involved (just as they already do with things like zoning and permitting and construction approval) but I don't see how this is in the interest of national governments. If a bunch of stupid NIMBYs in one particular city want to price out all their janitors and convenience-store workers, and then they can't get anyone to clean their toilets and don't have any local restaurants or shops, then let them.

bogomipz 10y ago

>"If there are indeed buildings being constructed for the sole purpose to "stash cash" as you say, then the law against misuse of real estate property" I wasn't speaking about Berlin specifically for that comment only that its happening in many places in the world - San Francisco, New York, London. I linked to two articles describing it different cities. So the "market will sort itself out" neo-lib doctrine you mentioned has largely failed working class and indeed middle class which are the majority compared to the wealthy.

tannhaeuser 10y ago
Ok, because there are cases of real estate in NYC, SF, and London being bought to merely keep money from loosing value you conclude that capitalism has failed? The reason for this real estate bubble (money loosing value) being the ECB's and the Fed's inflationary policies and low interest rates (hence a consequence of state action)? And as a remedy you propose the state or city should buy real estate to keep housing affordable (rather than changing regulations)? So that some pseudo hipsters in Berlin's fashion quarters can keep living on social welfare (ok I'm taking that one back :) but I can tell you the taxpayers of Southern Germany, Hesse, Hamburg (and Saxony I believe) aren't amused to finance Berlin decadence [1]. I can only appeal to your computer science skills to analyze the situation rationally, rather than buying into social-romantic nonsense. [1]: since over half the residents of Berlin have their hands in the pocket of the state in one form or another, the strategy of the Senate of Berlin seems to be to "buy" their electorate with money they get from other German countries, when actually Berlin rents are much lower than in all other big German cities
- bogomipz 10y ago
  >"Ok, because there are cases of real estate in NYC, SF, and London being bought to merely keep money from loosing value you conclude that capitalism has failed?" Nice try, nowhere did I even remotely find fault with capitalism. Capitalism and a urban planning are two completely orthogonal concepts. You seem to be conflating the two an maligning a vote for some kind of housing policy as a vote against capitalism which is just ridiculous. They are not mutually exclusive. >"The reason for this real estate bubble (money loosing value) being the ECB's and the Fed's inflationary policies" And try to remember why central banks had to loosen the money supply. Because in 2008 the global financial system was brought to its knees by banks who believed that "the market will look after itself." And who bailed those institutions out? The taxpayers did what amounted into a systems of "privatize the rewards and socialize the risks." Typical neo-liberal bullshit hypocrisy, you have no problem accusing everyone else of "social-romantic nonsense" though. >"I can only appeal to your computer science skills to analyze the situation rationally" Spoken like a true technocrat, your'e right there's probably a good formula to explain the problem away. >"So that some pseudo hipsters in Berlin's fashion quarters can keep living on social welfare" So you have just reduced a multi-ethnic city with a population of 3 million people to a single narrow demographic. You are obviously trolling.
  - tannhaeuser 10y ago
    I was just kidding re: Berliners. Concerning the so-called financial crisis: I remember it all started with sub-prime real estate credits in the US, the reason for their existence being politically motivated ("everyone should be able to afford housing" or, less favorable, "we're going to buy our electorate by keeping interest rates low")
kjksf 10y ago
This is a symptom of the disease, not the cause. I can't speak to other places but in SF the disease is ridiculous zoning. City doesn't allow dense/tall buildings despite plenty of developers would be happy to build them because there is demand for it. It also happens to be an attractive place to be so every year we have more people coming in than new apartments being built so rent and cost of houses raises every year faster than in other places. If you were a rational investor, would you rather buy a house in SF, where the price will raise faster than S&P 500 or in Kentucky, where it'll remain the same? Rational investing strategies make housing even less available, prices going up even faster, creating a vicious circle. Note, however, that the only way to get out of this is to allow construction keep pace with population growth, as it mostly happened in Seattle in the past 5-10 years. If house prices will not rise then people will not be using them as investments. Free market is capable of sorting this out. It didn't happen because the market isn't free because the government of the city of San Francisco doesn't allow it to be by responding to one of the highest population growths in the nation with one of the most restrictive zoning in the nation and trying to "fix" the problem with rent control. You don't have to be a Nobel-winning economist to see how that leads to disaster but if it makes a difference, Noble-winning economists agree that restrictive zoning and rent control inevitably leads to disaster.
Arizhel 10y ago
I fail to see how neo-lib doctrine has failed in this instance. If the middle class is priced out of a certain area, then fine, they go move somewhere else. We see this in NYC today: lots of businesses and restaurants have closed shop and left Manhattan because the real estate values (rents) are too high, and the people who shop there are moving out. Instead, Brooklyn is now the hip place where all the good restaurants are opening, as rents are cheaper there. Many employers are moving over there too. So what exactly is the problem? There seems to be an underlying assumption to your writing that it's somehow a "disaster" if a city (or in this case, one district of a big city) loses its productive members and just has a bunch of wealthy people holding property there. Why is it? Sure, it sucks if you're middle class and can't afford the rent there, but you're free to move somewhere cheaper. Then businesses will have to pay higher wages to get service workers to commute farther, and if that fails, they'll just close shop or move to be near the workers. If it gets bad enough, the property values in the city (or district) will collapse, a bunch of rich bastards will lose a lot of money, and things will eventually return to normal. If there's any government intervention needed, it's to encourage companies to move to where the workers are, perhaps with tax deductions. But cities already do that kind of thing. And don't forget, cities are in competition with each other. So cities which do a better job of managing themselves and doing urban planning to make sure service workers can live there are going to do better long-term than cities which don't. So I can see how municipalities have a good argument for getting involved (just as they already do with things like zoning and permitting and construction approval) but I don't see how this is in the interest of national governments. If a bunch of stupid NIMBYs in one particular city want to price out all their janitors and convenience-store workers, and then they can't get anyone to clean their toilets and don't have any local restaurants or shops, then let them.