5 ms·

> Rents are rising at a rate of nearly 10 percent a year, even though the city has a rent cap. Maybe that rent cap is why landlords prefer Airbnb. Rent caps ar

> Rents are rising at a rate of nearly 10 percent a year, even though the city has a rent cap. Maybe that rent cap is why landlords prefer Airbnb. Rent caps are never a good idea, they have so many unforseen consequences.

rbehrends 9y ago
There is no rent cap in Germany. The article is wrong. Germany has only "soft" rent controls that limit YOY increases in rent and (selectively) increases in rents when changing tenants. German economic orthodoxy relies very much on the need to build housing in order to deal with housing shortages and with rising rents due to housing shortages. The "soft" rent controls simply buy time to get housing projects underway. Without new housing being built, rents would still reach market levels, it would just take a bit longer. Berlin's current problem is excessive urbanization driven by migration (1) from the neighbouring comparatively poor East German states and (2) of foreigners who speak only English and hence prefer a city that has already evolved to accommodate English speakers. Various and sundry NIMBY problems where locals oppose new housing projects also don't help.
- tootie 9y ago
  NYC does the same rent caps disappeared in the 70s. They YOY percentage increase limits. One limit for lease renewals, higher one for new leases.
  - delphinius81 9y ago
    DC has the same rent control structure.
- mschuster91 9y ago
  > Berlin's currently problem is excessive urbanization driven by migration (1) from the neighbouring comparatively poor East German states and (2) of foreigners who speak only English and hence prefer a city that has already evolved to accommodate English speakers. No. Berlin problems mostly stem from the city government colluding with investor scum to build luxury apartments instead of actually affordable ones plus doing their very best to e.g. kick squats out (which help keeping down rents for all neighbors). Berlin government could easily break the necks of the investors and protect the population instead, but especially the SPD has chosen not to do so - and sell off priorly city-owned prime real estate to investors. The investors now do "Luxussanierungen" (basically, thermoclad the houses and fix the more egregious stuff like bad wiring / plumbing that the city government had neglected over decades) and price out all the lower-and-middle-income people.
  - jackcosgrove 9y ago
    Governments mainly value people as taxpayers, because taxpayers pay into the public coffers, which can then be emptied to ameliorate social disputes and ease reelection. If you don't pay taxes and do consume services at the same time, as a squatter does, you're making your leaders' lives harder and they will find a way to get rid of you.
    - mschuster91 9y ago
      A squatter pays his/her share of taxes: VAT on everything he/she buys, income tax on any kind of employment or other income sources. The only tax that a squatter does not pay in contrast to an owner or renter (indirect there) is "ground tax", which is a negligible amount anyway.
      - jackcosgrove 9y ago
        There is also the opportunity cost of the owner not living in the domicile and not paying those same taxes, at probably higher amounts than the squatter. The owner is probably wealthier than the squatter and thus will pay more taxes.
        mschuster91 9y ago
        Squats usually end up in houses where no one cared in any way for years and some times, like the recent short-term squat in Munich, for decades. And the only interest which the "owners", mostly in form of offshore companies, have is to make huge amounts of money at the cost of the city, so I don't have a single tear left for them.
  - closeparen 9y ago
    Are they luxury apartments because they're palatial or inherently high-cost, or because they're centrally located? It's unlikely that there's any such thing as an actually affordable apartment in a major world city, unless we've moved the method of allocation to something like lottery or waiting list, in which case it's only affordable to a lucky few. I would encourage anyone who thinks that luxury apartments are for the rich while single family houses are normal to consider the relative luxury of life in the actual structures (not location). You'll find that, as structures, luxury apartments are much less luxurious than lower-density uses of the same land.
coldtea 9y ago
>Rent caps are never a good idea, they have so many unforseen consequences. Compared to uncapped rent that doesn't have any?
- zyx321 9y ago
  Uncapped rent will lead to people getting priced out of their homes by the first person willing to outbid them. Nothing unforeseen about that.
  - coldtea 9y ago
    The second order effects to whats happens to those people, and to the neighborhoods where they lived is the unforeseen part.
  - wpietri 9y ago
    There are others, though. For example, there are a couple of basic asymmetries that advantage landlords. One is that they generally have multiple units, whereas renters generally have only one. So the end of a lease is a bigger deal to the renter than the landlord. Another is that the costs (in time and money) of a tenant move are much higher for the renter than the landlord. This means that a greedy landlord can jack the rent well above market price because renters are eager to avoid the expense and disruption of moving.
    - chii 9y ago
      > jack the rent well above market price if the renter is able to accept the "jacked up" price, then by definition that's the market price (for that property). The renter needs to move if they don't like the price. The landlord also don't like vacant properties, and is perhaps eager to not "jack up" the price if they find that the tenant moves as soon as they do!
      - wpietri 9y ago
        It is not the market price, because the only person who will pay it is the one who's eager to avoid moving. Everybody else will pay a lower price, because they have already committed to moving.

rbehrends 9y ago

There is no rent cap in Germany. The article is wrong. Germany has only "soft" rent controls that limit YOY increases in rent and (selectively) increases in rents when changing tenants. German economic orthodoxy relies very much on the need to build housing in order to deal with housing shortages and with rising rents due to housing shortages. The "soft" rent controls simply buy time to get housing projects underway. Without new housing being built, rents would still reach market levels, it would just take a bit longer. Berlin's current problem is excessive urbanization driven by migration (1) from the neighbouring comparatively poor East German states and (2) of foreigners who speak only English and hence prefer a city that has already evolved to accommodate English speakers. Various and sundry NIMBY problems where locals oppose new housing projects also don't help.

tootie 9y ago
NYC does the same rent caps disappeared in the 70s. They YOY percentage increase limits. One limit for lease renewals, higher one for new leases.
- delphinius81 9y ago
  DC has the same rent control structure.
mschuster91 9y ago
> Berlin's currently problem is excessive urbanization driven by migration (1) from the neighbouring comparatively poor East German states and (2) of foreigners who speak only English and hence prefer a city that has already evolved to accommodate English speakers. No. Berlin problems mostly stem from the city government colluding with investor scum to build luxury apartments instead of actually affordable ones plus doing their very best to e.g. kick squats out (which help keeping down rents for all neighbors). Berlin government could easily break the necks of the investors and protect the population instead, but especially the SPD has chosen not to do so - and sell off priorly city-owned prime real estate to investors. The investors now do "Luxussanierungen" (basically, thermoclad the houses and fix the more egregious stuff like bad wiring / plumbing that the city government had neglected over decades) and price out all the lower-and-middle-income people.
- jackcosgrove 9y ago
  Governments mainly value people as taxpayers, because taxpayers pay into the public coffers, which can then be emptied to ameliorate social disputes and ease reelection. If you don't pay taxes and do consume services at the same time, as a squatter does, you're making your leaders' lives harder and they will find a way to get rid of you.
  - mschuster91 9y ago
    A squatter pays his/her share of taxes: VAT on everything he/she buys, income tax on any kind of employment or other income sources. The only tax that a squatter does not pay in contrast to an owner or renter (indirect there) is "ground tax", which is a negligible amount anyway.
    - jackcosgrove 9y ago
      There is also the opportunity cost of the owner not living in the domicile and not paying those same taxes, at probably higher amounts than the squatter. The owner is probably wealthier than the squatter and thus will pay more taxes.
      - mschuster91 9y ago
        Squats usually end up in houses where no one cared in any way for years and some times, like the recent short-term squat in Munich, for decades. And the only interest which the "owners", mostly in form of offshore companies, have is to make huge amounts of money at the cost of the city, so I don't have a single tear left for them.
- closeparen 9y ago
  Are they luxury apartments because they're palatial or inherently high-cost, or because they're centrally located? It's unlikely that there's any such thing as an actually affordable apartment in a major world city, unless we've moved the method of allocation to something like lottery or waiting list, in which case it's only affordable to a lucky few. I would encourage anyone who thinks that luxury apartments are for the rich while single family houses are normal to consider the relative luxury of life in the actual structures (not location). You'll find that, as structures, luxury apartments are much less luxurious than lower-density uses of the same land.

coldtea 9y ago

>Rent caps are never a good idea, they have so many unforseen consequences. Compared to uncapped rent that doesn't have any?

zyx321 9y ago
Uncapped rent will lead to people getting priced out of their homes by the first person willing to outbid them. Nothing unforeseen about that.
- coldtea 9y ago
  The second order effects to whats happens to those people, and to the neighborhoods where they lived is the unforeseen part.
- wpietri 9y ago
  There are others, though. For example, there are a couple of basic asymmetries that advantage landlords. One is that they generally have multiple units, whereas renters generally have only one. So the end of a lease is a bigger deal to the renter than the landlord. Another is that the costs (in time and money) of a tenant move are much higher for the renter than the landlord. This means that a greedy landlord can jack the rent well above market price because renters are eager to avoid the expense and disruption of moving.
  - chii 9y ago
    > jack the rent well above market price if the renter is able to accept the "jacked up" price, then by definition that's the market price (for that property). The renter needs to move if they don't like the price. The landlord also don't like vacant properties, and is perhaps eager to not "jack up" the price if they find that the tenant moves as soon as they do!
    - wpietri 9y ago
      It is not the market price, because the only person who will pay it is the one who's eager to avoid moving. Everybody else will pay a lower price, because they have already committed to moving.