23 ms·

A Berlin Borough Buying Out Private Landlords

126 points by Geekette 9y ago

deleted 9y ago
[deleted]
JanSt 9y ago
Berlin is lead by a left-far left-green coalition and gets billions of € every year from the Länderfinanzausgleich. Basically, other germans pay for their citys reckless spending on questionable projects. High rents need more living space, not payed-by-other one
- tannhaeuser 9y ago
  It's been said the majority, or a large part, of the electorate of Berlin consists of people receiving welfare or other community/state benefits in some form or another, including the large number of state employees living in Berlin. It's a very unhealthy situation going forward, since the government of Berlin must appease that part of the electorate, rather than attracting eg. investors or people who can sustain themselves. That the state or municipality is an actor on the housing market really is a perversion and outright declaration of defeat on behalf of politicians. With the negative interest rate set by the European Central Bank and thus lack of investment opportunities, and given the growth of population in the metropolitan areas of Germany, you'd think this market should be able to see after itself, like it is in other areas of Germany. Even more so since housing has traditionally been an investment for people seeking to build up a rent for when they're old, a problem that will come big time to Germany in the years to come, the demographics being what they are. But social-democratic politicians in Berlin are generally incompetent or corrupt in the extreme; at the expense of other German's money, they rather want to be perceived as acting in the interest of their electorate.
  - JanSt 9y ago
    This so much. Yet, I get downvoted for stating facts by people, who have no idea about the situation.
  - Xylakant 9y ago
    How are employees of the federal government "receivers of state benefits"? It's a job like any other job - they work for money.
    - tannhaeuser 9y ago
      It wasn't meant in a derogatory sense, but rather as a remark on Berlin's special electorate composition.
    - JanSt 9y ago
      They are - in a sense - by taking 40 paid days off/year on average for being 'sick'. [1] That's two month out of every year in addition to ~10 holidays and 30 days vacation. [1] http://www.tagesspiegel.de/berlin/gesundheitspolitik-in-berlin-beamte-sind-im-schnitt-40-tage-krank/11971286.html http://www.tagesspiegel.de/berlin/gesundheitspolitik-in-berl...
      - Xylakant 9y ago
        These are not employees (Beamte are not employed) and they're not federal government. So the article kind of does not apply twice. These statistics also counts weekends and holidays as sick leave, so - as the article mentions - the data cannot be compared with the usual averages which do only count work days. On top, the groups with the highest sick leave are people in high risk jobs - policemen and firefighters. These are definitely not rent-seekers from the government.
        tannhaeuser 9y ago
        My post wasn't an insult on state employees of any kind, or some such. The point was that the electorate consists to a very large extent of receivers of tax payer's money, and that the Berlin Senate buys their electorate with money they receive via cross-financing from other German countries ("Länderfinanzausgleich"), which I do not approve of. Edit: cf. rsync's quote
        Xylakant 9y ago
  - rsync 9y ago
    "It's been said the majority, or a large part, of the electorate of Berlin consists of people receiving welfare or other community/state benefits in some form or another, including the large number of state employees living in Berlin. It's a very unhealthy situation going forward ..." I am reminded of this quote, which is often misattributed to Alexander Fraser Tytler[1]: "A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing ..." [1] https://en.wikiquote.org/wiki/Alexander_Fraser_Tytler https://en.wikiquote.org/wiki/Alexander_Fraser_Tytler
- bwedw 9y ago
  Why is this downvoted? Berlin is full of slackers, civil servants and other parasites who are supported by the working population.
config_yml 9y ago
Other cities do this as well, like Vienna, or Zurich.
jcfrei 9y ago
It's always interesting to see which parts of our lives are incompatible with free markets (at least for a majority of society). It's a very peculiar moral that you mustn't evict people from their homes after they've lived in a place for a certain amount of time. It shows that being a renter in a neighbourhood after a while creates some sort of (legally enforceable) kinship that is incompatible with a free market for housing. But I think it's very arbitrary that we don't have a problem saying to outsiders "we won't allow you to live here (even though you'd be willing to pay a lot for it)" however saying to someone "you can't live here anymore (unless you pay more)" is a cardinal sin.
- bradleyjg 9y ago
  Yes, it is a little odd. If a polity thinks that long term residence should covey property rights maybe it should pass laws that encourage or require rent-to-own schemes instead of layering confusing quasi-property rights on top of the rental/ownership dichotomy.
- breatheoften 9y ago
  It is definitely true that cities require many income levels to be sustainable -- preventing monoculture is not just a kind of cultural bias but it is sound economic strategy to keep your city vital and desirable over the long term. There is so much accrued capital into wealthy hands across the world with need to find profitable parking -- allowing your city to become a real estate bubble in service to investment funds is trading short term gains for long term losses.
- loceng 9y ago
  Core survival requirements seem generally incompatible with free markets.
  - nine_k 9y ago
    This is why markets spring up in societies that developed past mere survival of subsistence farming or hunting. The society of Germany is way past that phase, just in case.
  - 9y ago
holydude 9y ago
Some people prefer this some people dont. I honestly detest interfering like this.
- imtringued 9y ago
  Why? It gives the government financial incentives to build more housing or deregulate zoning laws.
ikeboy 9y ago
As long as they're paying more than the investors offered, it seems fine. Article makes it unclear how the price they paid compares to what the sell price would have been.
- em3rgent0rdr 9y ago
  Well it may seem fine, however considering that taxes are funding the city's purchases, then it is a bit unfair to the other bidders who are therefore at a disadvantage.
- matt4077 9y ago
  They get right-of-last-refusal on any offer. Meaning they pay whatever the investor was offering.
  - ikeboy 9y ago
    Does the investor have a right to bid higher in that case?
    - detaro 9y ago
      If I understand it correctly, the district takes over at the price the investor signed a contract for. So no, they can't outbid the district afterwards, they only can put a higher bid initially, which they'll have to pay if the district doesn't make use of their interception right.
mbag 9y ago
I'm interested to see how this plays out. Some cities have opposite approach. These are older articles, but it might be a reason why Berlin decided to try new approach: https://www.theguardian.com/society/2014/jan/31/inside-london-billionaires-row-derelict-mansions-hampstead https://www.theguardian.com/society/2014/jan/31/inside-londo... https://www.theguardian.com/uk-news/2015/jan/25/its-like-a-ghost-town-lights-go-out-as-foreign-owners-desert-london-homes https://www.theguardian.com/uk-news/2015/jan/25/its-like-a-g...
odiroot 9y ago
That's too bad, the Kreuzberg part of this dual district really needs a lot of improvement. One may risk saying needs a bit more gentrification.
- Geekette 9y ago
  This move of certain municipalities buying housing appears to be one of many tactics being used to address housing shortage. I recall recently reading elsewhere that Berlin govt is also planning for building additional housing and conversion of large unused industrial spaces into housing. I wouldn't be surprised if improvement of certain areas is also part of the renovation/conversion tactics used in their housing strategy.
baron816 9y ago
The developed world really needs to start building new cities. People shouldn't be deprived of the opportunity to live in an downtown area just because the people already there feel entitled to their way of life. But, people can lose everything if you economically force them from their homes. That's not desirable either. My proposal for new cities involves strictly limiting the foot print to enable it to be completely walkable. That would mean you don't have any cars, which is good for many reasons. A lot of what local governments do is complicated by having to service so many different residences over a wide area (think sewage and water, mail, policing/fire protection, road maintenance, etc). If you mostly just build up, then that all becomes much easier, which means government can be much smaller and cheaper. And I think the city becomes much more livable, as a large area around the city is green space, and the streets can be taken over by open air restaurants/cafes/bars on weekends.
- hashmal 9y ago
  Depends where you live, in many areas around europe you just don't have enough lands for new cities.
  - baron816 9y ago
    I'm envisioning these new "microcities" would be about a mile and a half to two miles in diameter. You should be able to walk from one end to another in ~30 minutes. But they'd still be able to hold +100-500K people. The footprint would be small enough that you should be able to fit it anywhere. Even small European countries have a bit of farmland that could squeeze one of these cities in it.
    - rocqua 9y ago
      Here in the Netherlands, we have a huge population density. About 50 years ago, we created a shit-ton of land (Flevoland) and plopped down some cities. Those cities kind of worked out, but there is very little life there. They mostly function as suburbs, where people live but don't work. More recently, in the north we tried placing new cities, turns out that people don't go and live somewhere if there isn't work, and there isn't much work in the north. Those cities are now failures. Heck, the big established cities in the north are being drained by people moving towards the cities in the middle. Cities grow organically because people want to live in that city.
rocqua 9y ago
I wonder what the zoning laws are like in Berlin. Specifically, I wonder if zoning laws prohibit small homes that allow for pretty good high-density housing. Such zoning laws could contribute to the high rents in the center of town. In any case, this method is much better than rent-control. There is still then monetary incentive to skip on maintenance, but the institution should insulate from that. The biggest potential downside I see is a slowing of development in general. That might obstruct development of cheap rents more than it saves. In general I wonder what prevents building higher, cause you can build high and cheap and if there is demand, why not?
- lobotryas 9y ago
  To answer your last question: 1) The type of land in which you are building. Some can't support high-rises or can only do that at great expense (which defeats the purpose of building high). 2) Infrastructure. It's easy to cram a lot of people into one building but it becomes harder to alleviate traffic or ensure access to things like shops and health care.
- matt4077 9y ago
  I'm not sure what you mean by "small homes". Here, take a look at the house I live in, which is very typical of the buildings in central Berlin: https://www.google.de/maps/@52.4952517,13.4168985,3a,75y,199.05h,101.08t/data=!3m7!1e1!3m5!1sSlbQbKKWe2BjeVennexFpw!2e0!6s%2F%2Fgeo3.ggpht.com%2Fcbk%3Fpanoid%3DSlbQbKKWe2BjeVennexFpw%26output%3Dthumbnail%26cb_client%3Dmaps_sv.tactile.gps%26thumb%3D2%26w%3D203%26h%3D100%26yaw%3D55.752544%26pitch%3D0%26thumbfov%3D100!7i13312!8i6656 https://www.google.de/maps/@52.4952517,13.4168985,3a,75y,199... Generally, Berlin has mixed zoning with retail on the street level, apartments above, and offices and small manufacturing in the back. You can't build higher than what you see in the photo (the old limit for fire ladders), unless it's in an area with other higher buildings already. Rents are rising as a return to normal. Most people pay around $1.2/ft^2 (sorry, I have no idea what unit the US uses for rent)
  - rocqua 9y ago
    For small homes I'd say < 40m^2 spaces, getting as small as 25m^2. Those allow young single people to live where they want at prices they can afford. A related factor is required parking space. Such space, when there is no demand, makes high-density housing take up much more land.
neokya 9y ago
I am quite not sure how it would be expensive for existing residents even after sale to so called foreign investor. As far as I understand, in Germany, rents are fixed for existing residents and landlord can not evict them (few exception exists, probably won't work for investors). That 10% increase rule is only for new tenants.
- detaro 9y ago
  Rent can be adjusted up to match prices in the area (with a limit of 15% increase per 3 years), and modernizations are a valid reason to increase prices above that. Which is the typical gentrification scenario Berlin is worried about: old buildings are bought, improved to a more luxurious standard and then rented at accordingly higher prices.
evv 9y ago
What a small world. Until tonight I had never been to Kreuzberg, let alone Berlin. My friend recommended this as one of the more hipster neighborhoods. After realizing that this building is only a 25 minute walk away, I decided to go around and take a few photos of it and the surrounding neighborhood: https://imgur.com/gallery/cSpgv https://imgur.com/gallery/cSpgv This area has a fun vibe and it's easy to see why it's rising in popularity.. my Airbnb host grew up here and told me that it used to be very poor. This particular building is well painted, but doesn't really stand out. As someone who grew up in Palo Alto, gentrification just feels so.. normal. Although it's priced out most of my friends and family, I've always seen it as something inevitable. This is such a strange precedent to set.. how many of these dwellings is the city prepared to buy? How can they possibly stop the free market?
danielfoster 9y ago
I am curious how this decision will impact the neighborhood and city in the long-term. Unless the city spends more to educate existing residents or finds a way to bring in a more qualified workforce, higher-paying jobs won't come to the city and tax revenue will stay flat. I'm afraid this will hurt the city more in the long-run than any gentrification would. This is probably also infuriating to other parts of Germany, which pay substantial subsidies to Berlin and a few other poorer states.
- JBlue42 9y ago
  >This is probably also infuriating to other parts of Germany, which pay substantial subsidies to Berlin and a few other poorer states. It can be annoying but that's what being a unified country is about. Can't say those of us here in California or in NY are too happy about our massive subsidies that go to the red states that accuse us of being full of "welfare queens" but that's the cost of being a country.
Boothroid 9y ago
I've thought in the past about the possibility of a network of enterprises that would seek to eliminate or at least minimise profits and to exclude profit making companies from participation in the network. For example, the Goldman Sachss of this world would find the doors firmly shut via some kind of legal structuring. The eventual goal would be to drive profit out of the system completely, which surely would convert all profit into pure inefficiency, and thus slowly destroy the profit making enterprise as a viable model. Intrigued therefore to see this and also a report on TV about how Hamburg voted (narrowly) to take back control of their electricity network, and how this has the big power companies seriously concerned, no doubt because their parasitic extraction of profit is threatened. As may be obvious I am not an economist, so anticipate and welcome the flaws in my idea being pointed out!
- rocqua 9y ago
  Forcing out profit means there is less money for reinvesting. This would mean your network would fall behind in the quality it provides, until the profit enterprises are a better deal, even after their profit is extracted. You could go against that by having the intention of turning a profit but committing to reinvesting, but that is still extracting that profit. Moreover, it encourages the same exploitative behavior. In general, profit isn't bad. Trades are only made when both parties are better of afterwards, so in principle, more trade means everyone is better off. The devil lies in the balance between how much better off both parties are.
  - Boothroid 9y ago
    OK, so then include a percentage of price for reinvestment and eliminate all other profit? Or put all of this profit into a socialised pool? Also for-profit competitors would be effectively shut out of the network by agreement. The vision would be vertical integration with minimal profit at each step, thus opportunities for concentration of wealth are minimised. Interestingly this seems to be happening to a degree with Amazon, where profits are arbitraged out of the system (though to varying degrees between participants).
sauronlord 9y ago
I can't wait to see no repairs get made since there is not budget for it. Communism

126 points by Geekette 9y ago

deleted 9y ago

[deleted]

Berlin is lead by a left-far left-green coalition and gets billions of € every year from the Länderfinanzausgleich. Basically, other germans pay for their citys reckless spending on questionable projects. High rents need more living space, not payed-by-other one

tannhaeuser 9y ago
It's been said the majority, or a large part, of the electorate of Berlin consists of people receiving welfare or other community/state benefits in some form or another, including the large number of state employees living in Berlin. It's a very unhealthy situation going forward, since the government of Berlin must appease that part of the electorate, rather than attracting eg. investors or people who can sustain themselves. That the state or municipality is an actor on the housing market really is a perversion and outright declaration of defeat on behalf of politicians. With the negative interest rate set by the European Central Bank and thus lack of investment opportunities, and given the growth of population in the metropolitan areas of Germany, you'd think this market should be able to see after itself, like it is in other areas of Germany. Even more so since housing has traditionally been an investment for people seeking to build up a rent for when they're old, a problem that will come big time to Germany in the years to come, the demographics being what they are. But social-democratic politicians in Berlin are generally incompetent or corrupt in the extreme; at the expense of other German's money, they rather want to be perceived as acting in the interest of their electorate.
- JanSt 9y ago
  This so much. Yet, I get downvoted for stating facts by people, who have no idea about the situation.
- Xylakant 9y ago
  How are employees of the federal government "receivers of state benefits"? It's a job like any other job - they work for money.
  - tannhaeuser 9y ago
    It wasn't meant in a derogatory sense, but rather as a remark on Berlin's special electorate composition.
  - JanSt 9y ago
    They are - in a sense - by taking 40 paid days off/year on average for being 'sick'. [1] That's two month out of every year in addition to ~10 holidays and 30 days vacation. [1] http://www.tagesspiegel.de/berlin/gesundheitspolitik-in-berlin-beamte-sind-im-schnitt-40-tage-krank/11971286.html http://www.tagesspiegel.de/berlin/gesundheitspolitik-in-berl...
    - Xylakant 9y ago
      These are not employees (Beamte are not employed) and they're not federal government. So the article kind of does not apply twice. These statistics also counts weekends and holidays as sick leave, so - as the article mentions - the data cannot be compared with the usual averages which do only count work days. On top, the groups with the highest sick leave are people in high risk jobs - policemen and firefighters. These are definitely not rent-seekers from the government.
      - tannhaeuser 9y ago
        My post wasn't an insult on state employees of any kind, or some such. The point was that the electorate consists to a very large extent of receivers of tax payer's money, and that the Berlin Senate buys their electorate with money they receive via cross-financing from other German countries ("Länderfinanzausgleich"), which I do not approve of. Edit: cf. rsync's quote
        Xylakant 9y ago
- rsync 9y ago
  "It's been said the majority, or a large part, of the electorate of Berlin consists of people receiving welfare or other community/state benefits in some form or another, including the large number of state employees living in Berlin. It's a very unhealthy situation going forward ..." I am reminded of this quote, which is often misattributed to Alexander Fraser Tytler[1]: "A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing ..." [1] https://en.wikiquote.org/wiki/Alexander_Fraser_Tytler https://en.wikiquote.org/wiki/Alexander_Fraser_Tytler
bwedw 9y ago
Why is this downvoted? Berlin is full of slackers, civil servants and other parasites who are supported by the working population.

config_yml 9y ago

Other cities do this as well, like Vienna, or Zurich.

jcfrei 9y ago

It's always interesting to see which parts of our lives are incompatible with free markets (at least for a majority of society). It's a very peculiar moral that you mustn't evict people from their homes after they've lived in a place for a certain amount of time. It shows that being a renter in a neighbourhood after a while creates some sort of (legally enforceable) kinship that is incompatible with a free market for housing. But I think it's very arbitrary that we don't have a problem saying to outsiders "we won't allow you to live here (even though you'd be willing to pay a lot for it)" however saying to someone "you can't live here anymore (unless you pay more)" is a cardinal sin.

bradleyjg 9y ago
Yes, it is a little odd. If a polity thinks that long term residence should covey property rights maybe it should pass laws that encourage or require rent-to-own schemes instead of layering confusing quasi-property rights on top of the rental/ownership dichotomy.
breatheoften 9y ago
It is definitely true that cities require many income levels to be sustainable -- preventing monoculture is not just a kind of cultural bias but it is sound economic strategy to keep your city vital and desirable over the long term. There is so much accrued capital into wealthy hands across the world with need to find profitable parking -- allowing your city to become a real estate bubble in service to investment funds is trading short term gains for long term losses.
loceng 9y ago
Core survival requirements seem generally incompatible with free markets.
- nine_k 9y ago
  This is why markets spring up in societies that developed past mere survival of subsistence farming or hunting. The society of Germany is way past that phase, just in case.
- 9y ago

holydude 9y ago

Some people prefer this some people dont. I honestly detest interfering like this.

imtringued 9y ago
Why? It gives the government financial incentives to build more housing or deregulate zoning laws.

ikeboy 9y ago

As long as they're paying more than the investors offered, it seems fine. Article makes it unclear how the price they paid compares to what the sell price would have been.

em3rgent0rdr 9y ago
Well it may seem fine, however considering that taxes are funding the city's purchases, then it is a bit unfair to the other bidders who are therefore at a disadvantage.
matt4077 9y ago
They get right-of-last-refusal on any offer. Meaning they pay whatever the investor was offering.
- ikeboy 9y ago
  Does the investor have a right to bid higher in that case?
  - detaro 9y ago
    If I understand it correctly, the district takes over at the price the investor signed a contract for. So no, they can't outbid the district afterwards, they only can put a higher bid initially, which they'll have to pay if the district doesn't make use of their interception right.

mbag 9y ago

I'm interested to see how this plays out. Some cities have opposite approach. These are older articles, but it might be a reason why Berlin decided to try new approach: https://www.theguardian.com/society/2014/jan/31/inside-london-billionaires-row-derelict-mansions-hampstead https://www.theguardian.com/society/2014/jan/31/inside-londo... https://www.theguardian.com/uk-news/2015/jan/25/its-like-a-ghost-town-lights-go-out-as-foreign-owners-desert-london-homes https://www.theguardian.com/uk-news/2015/jan/25/its-like-a-g...

odiroot 9y ago

That's too bad, the Kreuzberg part of this dual district really needs a lot of improvement. One may risk saying needs a bit more gentrification.

Geekette 9y ago
This move of certain municipalities buying housing appears to be one of many tactics being used to address housing shortage. I recall recently reading elsewhere that Berlin govt is also planning for building additional housing and conversion of large unused industrial spaces into housing. I wouldn't be surprised if improvement of certain areas is also part of the renovation/conversion tactics used in their housing strategy.

baron816 9y ago

The developed world really needs to start building new cities. People shouldn't be deprived of the opportunity to live in an downtown area just because the people already there feel entitled to their way of life. But, people can lose everything if you economically force them from their homes. That's not desirable either. My proposal for new cities involves strictly limiting the foot print to enable it to be completely walkable. That would mean you don't have any cars, which is good for many reasons. A lot of what local governments do is complicated by having to service so many different residences over a wide area (think sewage and water, mail, policing/fire protection, road maintenance, etc). If you mostly just build up, then that all becomes much easier, which means government can be much smaller and cheaper. And I think the city becomes much more livable, as a large area around the city is green space, and the streets can be taken over by open air restaurants/cafes/bars on weekends.

hashmal 9y ago
Depends where you live, in many areas around europe you just don't have enough lands for new cities.
- baron816 9y ago
  I'm envisioning these new "microcities" would be about a mile and a half to two miles in diameter. You should be able to walk from one end to another in ~30 minutes. But they'd still be able to hold +100-500K people. The footprint would be small enough that you should be able to fit it anywhere. Even small European countries have a bit of farmland that could squeeze one of these cities in it.
  - rocqua 9y ago
    Here in the Netherlands, we have a huge population density. About 50 years ago, we created a shit-ton of land (Flevoland) and plopped down some cities. Those cities kind of worked out, but there is very little life there. They mostly function as suburbs, where people live but don't work. More recently, in the north we tried placing new cities, turns out that people don't go and live somewhere if there isn't work, and there isn't much work in the north. Those cities are now failures. Heck, the big established cities in the north are being drained by people moving towards the cities in the middle. Cities grow organically because people want to live in that city.

rocqua 9y ago

I wonder what the zoning laws are like in Berlin. Specifically, I wonder if zoning laws prohibit small homes that allow for pretty good high-density housing. Such zoning laws could contribute to the high rents in the center of town. In any case, this method is much better than rent-control. There is still then monetary incentive to skip on maintenance, but the institution should insulate from that. The biggest potential downside I see is a slowing of development in general. That might obstruct development of cheap rents more than it saves. In general I wonder what prevents building higher, cause you can build high and cheap and if there is demand, why not?

lobotryas 9y ago
To answer your last question: 1) The type of land in which you are building. Some can't support high-rises or can only do that at great expense (which defeats the purpose of building high). 2) Infrastructure. It's easy to cram a lot of people into one building but it becomes harder to alleviate traffic or ensure access to things like shops and health care.
matt4077 9y ago
I'm not sure what you mean by "small homes". Here, take a look at the house I live in, which is very typical of the buildings in central Berlin: https://www.google.de/maps/@52.4952517,13.4168985,3a,75y,199.05h,101.08t/data=!3m7!1e1!3m5!1sSlbQbKKWe2BjeVennexFpw!2e0!6s%2F%2Fgeo3.ggpht.com%2Fcbk%3Fpanoid%3DSlbQbKKWe2BjeVennexFpw%26output%3Dthumbnail%26cb_client%3Dmaps_sv.tactile.gps%26thumb%3D2%26w%3D203%26h%3D100%26yaw%3D55.752544%26pitch%3D0%26thumbfov%3D100!7i13312!8i6656 https://www.google.de/maps/@52.4952517,13.4168985,3a,75y,199... Generally, Berlin has mixed zoning with retail on the street level, apartments above, and offices and small manufacturing in the back. You can't build higher than what you see in the photo (the old limit for fire ladders), unless it's in an area with other higher buildings already. Rents are rising as a return to normal. Most people pay around $1.2/ft^2 (sorry, I have no idea what unit the US uses for rent)
- rocqua 9y ago
  For small homes I'd say < 40m^2 spaces, getting as small as 25m^2. Those allow young single people to live where they want at prices they can afford. A related factor is required parking space. Such space, when there is no demand, makes high-density housing take up much more land.

neokya 9y ago

I am quite not sure how it would be expensive for existing residents even after sale to so called foreign investor. As far as I understand, in Germany, rents are fixed for existing residents and landlord can not evict them (few exception exists, probably won't work for investors). That 10% increase rule is only for new tenants.

detaro 9y ago
Rent can be adjusted up to match prices in the area (with a limit of 15% increase per 3 years), and modernizations are a valid reason to increase prices above that. Which is the typical gentrification scenario Berlin is worried about: old buildings are bought, improved to a more luxurious standard and then rented at accordingly higher prices.

evv 9y ago

What a small world. Until tonight I had never been to Kreuzberg, let alone Berlin. My friend recommended this as one of the more hipster neighborhoods. After realizing that this building is only a 25 minute walk away, I decided to go around and take a few photos of it and the surrounding neighborhood: https://imgur.com/gallery/cSpgv https://imgur.com/gallery/cSpgv This area has a fun vibe and it's easy to see why it's rising in popularity.. my Airbnb host grew up here and told me that it used to be very poor. This particular building is well painted, but doesn't really stand out. As someone who grew up in Palo Alto, gentrification just feels so.. normal. Although it's priced out most of my friends and family, I've always seen it as something inevitable. This is such a strange precedent to set.. how many of these dwellings is the city prepared to buy? How can they possibly stop the free market?

danielfoster 9y ago

I am curious how this decision will impact the neighborhood and city in the long-term. Unless the city spends more to educate existing residents or finds a way to bring in a more qualified workforce, higher-paying jobs won't come to the city and tax revenue will stay flat. I'm afraid this will hurt the city more in the long-run than any gentrification would. This is probably also infuriating to other parts of Germany, which pay substantial subsidies to Berlin and a few other poorer states.

JBlue42 9y ago
>This is probably also infuriating to other parts of Germany, which pay substantial subsidies to Berlin and a few other poorer states. It can be annoying but that's what being a unified country is about. Can't say those of us here in California or in NY are too happy about our massive subsidies that go to the red states that accuse us of being full of "welfare queens" but that's the cost of being a country.

Boothroid 9y ago

I've thought in the past about the possibility of a network of enterprises that would seek to eliminate or at least minimise profits and to exclude profit making companies from participation in the network. For example, the Goldman Sachss of this world would find the doors firmly shut via some kind of legal structuring. The eventual goal would be to drive profit out of the system completely, which surely would convert all profit into pure inefficiency, and thus slowly destroy the profit making enterprise as a viable model. Intrigued therefore to see this and also a report on TV about how Hamburg voted (narrowly) to take back control of their electricity network, and how this has the big power companies seriously concerned, no doubt because their parasitic extraction of profit is threatened. As may be obvious I am not an economist, so anticipate and welcome the flaws in my idea being pointed out!

rocqua 9y ago
Forcing out profit means there is less money for reinvesting. This would mean your network would fall behind in the quality it provides, until the profit enterprises are a better deal, even after their profit is extracted. You could go against that by having the intention of turning a profit but committing to reinvesting, but that is still extracting that profit. Moreover, it encourages the same exploitative behavior. In general, profit isn't bad. Trades are only made when both parties are better of afterwards, so in principle, more trade means everyone is better off. The devil lies in the balance between how much better off both parties are.
- Boothroid 9y ago
  OK, so then include a percentage of price for reinvestment and eliminate all other profit? Or put all of this profit into a socialised pool? Also for-profit competitors would be effectively shut out of the network by agreement. The vision would be vertical integration with minimal profit at each step, thus opportunities for concentration of wealth are minimised. Interestingly this seems to be happening to a degree with Amazon, where profits are arbitraged out of the system (though to varying degrees between participants).

sauronlord 9y ago

I can't wait to see no repairs get made since there is not budget for it. Communism