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Berlin Builds Ideas to Stage a Housing Revolution

98 points by vector_spaces 8y ago

Cypher 8y ago
Nope, because they'll just setup a load of shell companies.
- Dahoon 8y ago
  Should there be a limit to how many Shell companies a lord can own?
  - adrianN 8y ago
    You can probably set up a tree of shell companies.
    - Y_Y 8y ago
      The law is sophisticated enough to walk trees, and smart enough to have concepts like "beneficial ownership" where who _actually_ owns something matters, at least in common law.
- ginko 8y ago
  I always wondered if there might be some way to write a law that essentially bans clever financial tricks.
  - dalbasal 8y ago
    Clever? no. Clever is how you get to where we are now. The law(s) that would need to re-written are the core laws that define what a company is, how ownership, liability and such work. These are all clever-complicated. They cross jurisdictions, and enable cascading ownership (companies, owning companies, owning trusts, etc.), each with different (incompatible) rules: tax, reporting & transparency obligations, definitions of terms like profit. They've been complicated constantly for hundreds of years, trying to encourage one things and discourage another, usually for a small picture reason. Most of the "tricks" involve using multiple types of legal "persons" registered in multiple jurisdictions with multiple ownership structures. New laws try to plug certain loopholes, open other ones, or achieve a political or policy goal. This complexity is why it's so hard to do anything with company law.
  - EliRivers 8y ago
    There is, but the trend in US (and UK) law has unfortunately gone down a path that makes this very difficult. The letter of the law is given great weight, no matter the intention of the law. For example, in tax law, the game is to find ways to not actually violate the exact letter of the law. The idea of the spirit of the law has no force; everything has to be precisely outlawed. This, of course, is an infinite game that will never end, and leads to the endless games of shell companies and foreign domiciling and so on and so on; everyone knows that this is not what was intended, but it's what we have. The alternative is to write into law the intentions of the law, and allow subsequent assessment and judgement. Some places do this, and in this way the game of finding ways to ever so slightly dodge the exact wording of the law is a much less fruitful game.
    - dexen 8y ago
      >The letter of the law is given great weight, no matter the intention of the law. You are assigning the responsibility the wrong way around. The letter, and the intent, of the law have two points of interfacing: the point of execution (interpretation by the taxpayers or by the courts of law), and the point of redaction (the lawmakers distilling the intent into actual letter of the law). In case of the letter of the law not representing the intent, we would be much better off assigning the blame to the lawmakers. It is both their primary duty, and also what they have the best tools for. Putting the onus on anybody else than the lawmakers creates perverse incentive to get bribed for sake of writing loopholes into the law. When the lawmakers fail at properly writing the laws, punish the lawmakers: both vote them out, and also have the media launch investigation into possible corruption - the slip-up could very well be intentional.
  - hjk05 8y ago
    There are plenty of laws that are specified in such a way that no matter how you structure your shell companies they still apply. The only way to truely get around that is to start having strawmen owners or unregistered ownership relationships, all of which will get you in trouble with the law.
- reallydontask 8y ago
  I'm not saying that this would work but as a thought experiment: Any entity that buys a house zoned as residential has to pay a tax of 100% of the value of the house. Private citizens get an exemption on this tax, if their main residence of which you can only have one, and are 18 or older. CGT is 100% (Deductions for home improvements could be added) The municipality builds affordable housing The tax would probably need to be gradually increased as it would likely cause a bit of crash on the housing market, say over 10 years. There is an obvious lack of political will to carry out such a measure and I'm sure that there are loads of unintended consequences
  - dalbasal 8y ago
    This is pretty much the same as banning non-resident owners, bit it's formally a punitive tax rate rather than a ban. The problem is still the same problem, rent markets collapse.. so, public housing would have to plug that hole. I think it's important, in the context of public debate, to keep things simple. If an idea approximately transposes into another one... address them as a single idea. I'd catalogue this one under. "Owner-occupancy and public housing only." This is not realistic in most places, but maybe in the context of Berlin it's possible.
  - pintxo 8y ago
    Won’t work. Due to higher property sales taxes here in Germany, any building complex worth more than a couple million is already owned by a shell company. If the building is to be sold, they sell the shell company instead to not have to pay property sales tax. Such a law would simply result in each building be wrapped in a shell company.
  - stale2002 8y ago
    What you are suggesting would result in all renters being kicked out of the city. Now, if you want to live in a city, you have to Shell out hundreds of thousands of dollars. Berlin would only be for the rich, as no renting company would be willing to rent anything to people.
- scotty79 8y ago
  Who cares. You can still tax them progressively on what property descendant companies own.
sudoaza 8y ago
Yes, housing is a right not a speculation opportunity. Also there should be opportunities for people to get their own houses, like cheap credits with a monthly payment close to the rent.
- alasdair_ 8y ago
  >Yes, housing is a right not a speculation opportunity. Let's say I agree with this idea and let's also ignore the fact that by stating it's a right, we are implicitly stating that someone else needs to pay for it with their own money if you cannot. If housing is a right, does that necessarily mean that housing in a specific area is a right? I mean, I'd love a beachfront property in Maui but we can't all have that. If we build a few million houses in the middle of Kansas and tell people "there is your free house, as is your right", is that enough? Or do people have a right to a free house somewhere just because someone in their family happened to be lucky enough to live in the same general area at some point in the past? People in the US are generally allowed to move where they want. If a place becomes too expensive for them to live there, it's possible for them to move elsewhere if they must. I can definitely see that offering help with relocation could be good for society, and I can also see that having a mix of different people in an area is also good for society, but ultimately I don't agree that just because someone happened to pay rent at some point in the past, they and their descendants should be granted a perpetual right to stay in that proximate location forever.
  - uasm 8y ago
    > "I mean, I'd love a beachfront property in Maui but we can't all have that" The person you're replying to is basically saying: "having a place you can stay in, to keep you alive and going rather than homeless and broken, a safety net in essence - should be a right". Your response: "but we can't hand over free beachfront properties in Maui for everyone". You're diverting the discussion ("but look at what communism did to Venezuela"). This isn't about free beachfront properties or luxury homes in Maui. This is about a single bedroom apartment with the most basic of utilities for people that wouldn't otherwise have the money or means to afford anything better: students, older folks, sick people, people that face hardships.
AndrewDucker 8y ago
Regulate behaviour, not ownership. If you want landlords to behave better, then rather than keeping them small, stick limits on what they can do.
- scotty79 8y ago
  You can only regulate what you can measure. Ownership is very easy to measure. And tax progressively.
  - LoSboccacc 8y ago
    And suddenly one landlord owns ten companies trough subsidiaries and trusts. This is yet another nice trick that won't work. Besides, price and demand curve would still apply where it was one landlord or hundreds. What would help is to encourage housing density to increase supply. That has two main drive: building regulations (mandate building of a certain height) and taxation (tax building by footprint and not by height/units) Messing with ownership will only make people creative.
    - scotty79 8y ago
      > And suddenly one landlord owns ten companies trough subsidiaries and trusts. This is yet another nice trick that won't work. If you own anything that owns property (and etc. down the chain) then you pay same progressive tax on all properties owned directly on indirectly (minus the tax already payed by subsidiaries if the lawmaker feels so generous, he may not be, because why not discourage creative ownership). > Besides, price and demand curve would still apply where it was one landlord or hundreds. Sure, but if ownership is not that beneficial for large capital holders then less money is used to buy properties. If there is less money and same amount of properties then prices drop. Then more individuals can afford properties, and demand for renting is lower and rents go down. > What would help is to encourage housing density to increase supply. That has two main drive: building regulations (mandate building of a certain height) and taxation (tax building by footprint and not by height/units) If there's more property to buy but plenty of capital to buy then big landlords just buy more and hold, even empty property. Higher supply would probably drive down price a bit, but not as much as you'd expect. The problem is not only insufficient supply but competition between people who have too much capital and people who have barely enough. First group just drives the prices up for everybody, as high as the other group can barely suffer through.
adrianN 8y ago
The truth is that rents in Berlin are exceptionally cheap compared to other major cities. Try finding a flat in London or Paris for <10€/square meter/month that is half an hour bike ride away from the city center. The only way to keep rents this low in the face of rising demand is public housing that is rented out below market rates to low income tenants, or via a lottery.
- mruts 8y ago
  Or just a have a free market and abolish building codes.
  - Cthulhu_ 8y ago
    Have a new Kowloon be built?
  - adrianN 8y ago
    Putting the reasons behind building codes aside, the free market doesn't favor social mixing. Profits are maximized by enclaves for the rich and undesirables are pushed out of the city center. I think it's quite important for people of different social classes to live in close proximity and for their children to play together and go to the same schools.
  - onion2k 8y ago
    Increasing the housing supply isn't working. Wealthy landlords can afford buy new houses at a good price for the builder, and then the landlord rents them out at the current rental price, so rental prices don't go down and people can't afford to compete with the prices landlords are willing to pay for houses which is keeping house prices inflated. Unless something significant happens to regulate the housing market we're going to end up with property being something that no individual owns, and everyone rents a place to live from a corporation.
    - deleted 8y ago
      [deleted]
  - 8y ago
scotty79 8y ago
Not a hard limit. Just progressive tax that makes owning much real estate very expensive and in effect unprofitable.
- dsfyu404ed 8y ago
  Why wouldn't everyone's rent increase by whatever that tax is? There's already an incentive to create additional density, money. More units, more money. If there's some tax that the owner also has to account for that changes nothing. It's no different than any other increase in overhead. It just gets passed on.
  - scotty79 8y ago
    > Why wouldn't everyone's rent increase by whatever that tax is? Because the tax is progressive, which means is not equal for all landlords, which means if big landlords increased their rent by their tax then nobody would rent from them because smaller landlords would have smaller rents thanks to smaller tax. This way large landlords no longer find owning real estate profitable and relocate their capital away from real estate market towards stock market or wherever where it is hopefully less harmful to other players. Less capital with same number of units drives the price down. More people can afford to own vs rent, so they buy and rent drops further because of lower demand. Ultimately everything lands on new equilibrium of lower rents with government having nice pile of cash on their hands free to use it to whatever new public housing development it fancies, driving prices even lower by increasing supply.
    - tryptophan 8y ago
      You seem to have the misconception that rents are set by individual owners(a large company, or 1 house/person landlord). In actuality, rents are set by the rental market overall, governed by supply and demand. It doesn't matter if 500 homes to rent are owned by 2 or 200 people. A tax like that would just make rents increase to X+Y for units owned by large landlords, where Y is the new tax cost. X would not change, making the policy achieve exactly nothing.
moccachino 8y ago
There is no need to put a hard limit, just an effective limit by having a general wealth tax. Money flows to where money already is, that's inevitable in a capitalist market economy. There's no need to change that, but progressively bigger piles of wealth should be progressively higher taxed to keep them in check, thus ensuring a competitive market. Edit: I guess I should have known mentioning wealth tax would get people nervous. But this is not about taxing your old grandma for her paid-off house. This is about small but increasing percentage, starting at maybe $1M-10M and really kicking in at $1B and above. You can then abolish dividend taxing (that's only fair) and perhaps income tax altogether.
- scotty79 8y ago
  Taxing general wealth would be enough if you just wanted money. But what you want is rather change in the behaviour of the wealthy. You want them to take away their money out of real estate market so that it does not inflate the prices. You could achieve that through progressive real estate tax. This would make holding and renting large amounts of real estate less profitable in comparison to other things rich invest their money into. They would sell so prices would drop and individual ownership would rise.
  - moccachino 8y ago
    I don't mean this specifically as a solution to expensive housing, just a general solution to super disparate wealth inequality. The point is not to get more money for the state (income tax could be abolished to offset) but to put a natural negative feedback mechanism on wealth accumulation, instead of the positive feedback mechanism that exists today and makes the uber rich own the world.
    - scotty79 8y ago
      I don't think that the sheer fact of some people being incredibly wealthy does much harm and it also can do some good. When the money lands in the hands of rich people it essentially leaves the economy same way as if it was just burned because they won't be giving that money back to real world economy anytime soon. It just lowers inflation a bit so everything becomes a bit cheaper than it otherwise would be. Rich people being rich is fine. Them buying luxuries for their money or gambling (casinos, stock market, startups) does very little harm and even some good because some of their money comes back to other people and few of them do something good with it. The problem starts only when their money touches the parts of economy that are shared by other people because they drive the prices up by buying large amount of stuff and hoarding. Things like property or food or raw materials or land. We just need to make those activities unprofitable for them.
AllegedAlec 8y ago
There is a certain je-ne-sais-qoui about people living on the Karl Marx Allee trying to stop a rich person from buying their homes. From what I see though, the issue that started this is not that there are people controlling too much property, but there is a group of asshole landlords that use loopholes to increase the rent way to steeply.
voisin 8y ago
I do not think this implementation is a good use of taxpayer money or government effort. has developed a reputation for raising rents sharply by finding loopholes in Germany’s fairly strict rental laws. This is the item the government should rightfully be attempting to fix. Not acting as a market participant. In the meantime, the firm invests almost half as much as state housing companies do to keep its homes in good condition. State actors regularly spend 2x-3x their private counterparts with the same results. The difference relates to additional studies and more onerous self-imposed tendering requirements that create no additional value for the end user but allow the state to feel it has made decisions and spent taxpayer money in a justifiable way.
choeger 8y ago
Everyone and their cat wants to live as close as humanly possible to the hip center of the hip city. But of course, they literally do not want to pay the price. Why is there a vegan bakery specialized in Afghan Bagel[1] around the corner? Because there are enough hip, young professionals to pay for even the most unlikely specialty. Business can afford to cater to the most extraordinary taste, but only because there are so many fluent customers. These customers then simply drive prices. Due to the limits of public transportation, there are basically three ways out of this situation: 1. Rent ever-smaller, modernized apartments 2. Move away from the center 3. Get out of the city altogether Modern urbanites will not pick any of these options. They want cheap, large apartments with basically no insulation and 4m high ceilings. They do not want to travel more than 10min with the subway. And the thought of leaving Berlin borders on a crime against humanity. Now add to that the part of the population that lives in the center of the city for decades and literally cannot move anymore and you have a really bad situation at hands. IMO, it is ironic how the modern urban population that is so quick to assign blame for climate change (to car owners, carnivores), social injustice (to white men, preferably older), or simply a lack of mobile network coverage fails to understand their own contribution to the problems of a modern city. Sorry, but I needed to vent that. [1] Exaggeration. I don't even know if there are/were any Jews in Afghanistan, but I like good Bagel.
- onion2k 8y ago
  Everyone and their cat wants to live as close as humanly possible to the hip center of the hip city. I want to live as far from that place as possible.
  - loco5niner 8y ago
    Agreed. Especially with the homeless problem in Portland.
- crdoconnor 8y ago
  It's ironic how much effort is given to justifying the actual amount while the question of "who gets that cash and why do they deserve it?" gets glossed over. It's a bit like when Russia privatised in the 90s and American economists told Russia that it really didn't who (i.e. oligarchs) owned everything provided everything is privatised.
deleted 8y ago
[deleted]
shadowbannedtoo 8y ago
1. Yes--there should be a limit on how much housing a landlord should own. 2. There should be a limit on what their spawn own. (We have the technology. Why not monitor where the money flows?) 3. Foreigners should not be allowed to buy own land. 4. I'm considering deleting this because most of you believe, one day; you will be the land barron. 99.99% of you will just be renters, or worse. The egos of Americans is what will do us all in. This is not your daddy's America. The rich have us all in checkmate.
ForHackernews 8y ago
Surprised there's no mention yet in this thread of Land Value Tax https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax It's an effective way to encourage development of more housing, and reclaim some of the costs associated with rising demand for real estate.
- tjansen 8y ago
  The problem with many German cities are that they are already full. Infrastructure can't keep up with the population. The building density is so high that it's very difficult to find room for more streets or rails, more schools and other public buildings. Parks are overcrowded at weekends. I think the only solution is to get people out of the cities (or maybe build new cities).
  - ForHackernews 8y ago
    I find that hard to believe. Most German cities are low-rise, not skyscrapers. Elsewhere in this thread, somebody mentioned that Berlin's population today is still below its pre-WWII high.
    - pintxo 8y ago
      It was about 4m before the war. Is not about 3.6 Considering that today’s living arrangements (sqft per person) is quite different (larger) than 80 years ago, I am not sure this is working argument.
      - magduf 8y ago
        The simple solution is to build up. Build residential buildings twice as tall and suddenly having larger living units doesn't seem crazy. We have the technology today to build taller buildings than we did before WWII, more economically. The central problem with all these discussions about housing prices is construction. There isn't enough of it, it's too expensive in some places for what you're getting, the whole thing is completely broken and needs to be fixed. It should not be hard to build new housing units to modern standards.
newintellectual 8y ago
Sure, why not? Every other invalid, broken, illogical, anti-rational-economics idea is being endlessly and pointlessly re-tried in the modern world.
no_gravity 8y ago
Looking at the problem from a game theory perspective, it looks like this to me: Ambitious people want to live as close to as many other ambitious people as possible. So wherever the density of these 'Hipsters' or 'Cool People' increases, the desirability of the area increases. And by law of supply and demand, prices go up. The willingness and ability to pay higher rent decides who can live in those 'cool areas'. Now the 'cool people' might say to the landlords: "Hey, it's US who make this area cool! Not your houses! Why do we have to pay you for it?". It's an interesting point. Is it fair? I am not sure. Maybe. The same argument could hold for Facebook, YouTube or Reddit. It's the users that create all the value. Yet the platform providers extract most of it. I think that before we can form an opinion on different types of regulation, we should ask: If not willingness and ability to pay rent decides who lives where - what or who will decide instead? And what will be the result?
- mistrial9 8y ago
  in theory, theory is 90% of practice; in practice, theory is 10% of practice
- dogcomplex 8y ago
  Very interesting point, and comparison to social media. It seems to me that if most of the users of Facebook, Reddit, etc, were to band together and leave to somewhere they get a better deal - then the value of those sites would effectively become zero. If they could just wield it well, they have massive bargaining power in those relationships. But the cost of organizing such groups, building a new suitably-featured site, and moving there is a large limiting factor. The same relationship could be extended to most networks - including city/housing networks. But staging this mutiny on social media sounds tough enough - in real life real estate, I imagine it's nearly impossible! As such, landowners get a hefty upper hand, and there's not much power the tenants can wield in that negotiation - even if they do collectively provide most of the real estate value of a property. That said... what if this bias in network effects isn't eternal, and we humans just haven't been very good at group organization so far? I can imagine a userbase mad enough at Facebook might pick a date a year from now, get everyone they possibly can to sign up to leave on that day, and mass-migrate to an equivalent site with similar features (which doesn't farm $250 a year off each person in data - or at least gives those funds back to the user). With smart contracts to ensure commitment to the move, it could even be a fully-funded and well-organized migration - which might even have negotiation options to abort if Facebook met their demands. People would probably even do it just for the spectacle/coolness factor of being part of such a big rebellion. It's a bit of a pipe dream, sure, but it's conceivable something like this could happen. And let's face it, other than the data/hosting challenges, most of these big social media sites aren't doing anything that difficult to replicate. Hell, I'd go so far as to say almost any company worth the big bucks is mainly being priced on brand and network effects (minus IP/asset ownership). If the networks underlying this got better at organizing and moving/threatening-to-move to alternatives, they could eat that value and pass it down to consumers. Hell, it might even work out that they could be paid to use these services. The city/housing space is one I'd imagine would be wayyy slower to benefit from any of these potential consumer unions technologies due to physicality constraints, but I imagine it too could be translated into these mutinys. e.g. People could agree to leave a city en-masse to a new one with better (pre-negotiated) rent/ownership prices, leaving the old city high and dry in a bubble-bursting scenario. Of course we don't see this now - or at least, not in any organized form, just an economic drying-up when e.g. a factory closes and tenants can't afford their rent. But perhaps it's possible in the future as mobility, communication and coordination increase? Who knows.
tjansen 8y ago
I live in a different but still expensive Germany city and rent a apartment from a city-owned public housing company. The rent of the landlord's apartments is 20-30% lower than what you would pay in the free market, and in my neighbourhood I can get a pretty good idea of what people do to get one of those highly desired apartments. It's just crazy. I have heard everything short of bribing the person responsible for selecting renters. Calling her daily, flowers, pity stories.. another way to get into a highly coveted apartment is to get a recommendation from a renter who's leaving, basically taking over their contract. Often that involves paying absurdly high sums to the previous renter for floors and furniture left behind, or doing renovations for them. By the way, getting into the best kindergartens and schools appears to work like that as well. Many German cities are so overcrowded that you need to network like in socialism to get what you want, as there are things that money can't buy (or at least only a lot more money can buy). Those who are not well connected have a hard time to get the city's services, or at least will end up with worse facilities. The demand is just higher than the supply, and if the demand can not be controlled by increasing the price, people will find other ways to fight for what they want...
- snarf21 8y ago
  Thanks for sharing, I found that very interesting.
  - snarf21 8y ago
    Wow, weird. I wasn't being sarcastic. It was interesting to learn about it from someone who lives there. I guess that deserves a downvote.
- hawski 8y ago
  Yeah, apartments is one part of it all. I'm trying to find a place in a kindergarten and it's hell. In Berlin kindergartens are free for some time and there are no free places. My wife today tried to find a place in a private kindergarten, no luck even in one for 800 EUR/month. If we knew German language and customs better maybe it would be easier. But then I would probably just think about creating our own. We're getting desperate. If anyone knows about a place in a kita in Berlin for a 2 year old, please let me know! Private or whatever, or some kind of coop.
smileysteve 8y ago
In the U.S., this limit is expressed via property taxes and homestead exemptions; a person living in a building that they own received a ~25% discount on their property assessment;
smallgovt 8y ago
I've always thought that the advent of self-driving cars will contribute to urban sprawl and lower housing prices. I'd happily live somewhere with a 1 hr commute if rent was $3k/month cheaper and I could get work done on the way there and back with no distractions.
- AdrianB1 8y ago
  In some cities 1 hour commute is from one side of the city to the center or the other way around, not from suburbs to city. My commute is 1.5 hours per direction inside the city, going out would take more. Also spending 2 hours in a car, even self driven, is not the best way to spend your time. Otherwise you can live in a RV parked in front of your office.
mltvc 8y ago
I moved from Belgium to Berlin 2 months ago. To me Berlin looks really spread out compared to Belgian cities and a lot of other big cities. To test my feeling I just checked this map [1]. It's clear that the population density in Berlin is lower than in other European cities like London or Paris. Even smaller cities like Brussels, Copenhagen and Stockholm are denser. So I think there is still is a lot of potential to relax zoning laws and let more homes be built. This is the best way to lower rents imo. [1] https://pudding.cool/2018/10/city_3d/ https://pudding.cool/2018/10/city_3d/
jillesvangurp 8y ago
I've lived in Berlin for 10 years now. I moved into my place 10 years ago this month and the rent would definitely go up without the rigid German laws to prevent exactly that. By at least about 30-40% I would estimate. That's walking distance from major landmarks like the Alexanderplatz, the Berliner Dom, and the synagogue on Oranienburgerstrasse. I pay a lot by Berlin standards but I live dirt cheap by any other standards. I don't know many places in Europe where I could live this cheap and that centrally. Around 950 euros a month for an 85m2 place, including heating cost. Very nice deal. You need to move quite far out of the center of most European capitals to find anything similar and forget about it in the bigger ones like London, Amsterdam, Brussels, or Paris. However, that's not the point for the locals here. They've seen people move in over the last decades, claim their public space, and as a consequence their cost of living is going up like crazy and they are not getting a lot in return. That sort of thing creates a lot of resistance. There are a lot of people in Berlin that are not big earners. And only a few years ago they were still getting awesome deals on huge places right smack down in the middle of the coolest city in Europe (after 10 years, I know this is true). I had friends paying less than 600 euros for a 100m2 place. OK, it was in need of a bit of renovation but still. Of course that was never going to last. The same place probably goes for around 1500-2000/month now. IMHO, as a foreign contributor to the gentrification, a lot of the housing shortage is artificial and it has a lot to do with the local legislation that is designed to conserve the status quo combined with the fact that the local government sold out early for way too low to big investors. At this point they don't have a lot of control because they sold out. Also, this city is growing like crazy and it has insanely high dept due to failed projects like e.g. the new airport that was supposed to open in 2012 an will probably not open for years to come. So, they are kind of powerless to fix things and their political legitimacy is based on an electorate that would favor draconian measures. So, obviously that kind of thing is very popular with the locals. There's no money to build new stuff and besides they've sold all of the land on which this would need to happen. So, the next best thing is populist measures that don't actually solve the problem but make it look like they are doing something. There actually is a lot of land in and around Berlin. This city is pretty far from other German cities so there is a lot of country side in all compass directions. Also inside the city there is plenty of space. This city still has less inhabitants than before WW II and the cold war (4.3M in 1939 vs, 3.7M last year). Thanks to the cold war it is kind of very spread out with lots of former no mans land, huge parks, etc. People strange to Berlin always ask where 'the center' is. There's no such thing. And there are at least two areas that could lay claim to that and half a dozen more that are probably more interesting in terms of nightlife, culture and other things you would find in most city centers else where. So, lack of land is not a problem in Berlin. Constructing things on it is. And housing projects for lower incomes is not a priority.
galfarragem 8y ago
Everything but freezing rents! Freezing rents literally destroyed Portuguese city fabric and renting market during that time: landlords didn't want to rent more houses neither repair the rented ones. Until recently wasn't uncommon to have old people renting a flat in Lisbon city center for 20€.
- ip26 8y ago
  I wonder if cities that freeze rents also freeze property taxes?
  - manfredo 8y ago
    Some do. California froze property taxes state wide. Many cities then instituted price controls on rents. The result is prices over $10 per square foot in cities like San Francisco. Rent control means that renters have a big incentive not to move to different apartments. I've even heard stories of people continuing to rent their places after they've moved to different cities so that they can keep the same rents if they ever move back to San Francisco. Freezes on property taxes means that homeowners try to hold onto their home as long as possible. Because many home owners invest a big portion of their net worth into their house, they are often very adverse to anything that might make home values go down (like building more housing). Frozen rents + frozen property taxes = extremely high rents due to little supply of housing
berlinerluft 8y ago
It's horrible. They do everything to prevent more housing from being built. The fact is, the city is just popular, so people are moving in, which drives the prices up. The government of Berlin consists of incompetent socialists. Just look at the disaster of the new airport for a popular example. Please don't take any cues from them. They only persist because Berlin get's a lot of subsidies from the rest of the country.
- thecleaner 8y ago
  The thing is what would happen if they respond yoy he growing demand and build more housing ? If the economy of the city slows down even a little bit it will be hit hard with bad debt. Companies are currently mushrooming in Berlin. Keeping rents affordable could in fact help the people and help create more companies there.
  - berlinerluft 8y ago
    I don't think the city should do the building, so I don't understand what you mean by bad debt? Affordable rents don't help much if you can't find a place to rent. It is not just a problem for people who want to move to the city, but also for people whose situation has changed, and who now can't move. (Like having kids, switching jobs, that sort of thing).
WC3w6pXxgGd 8y ago
How about this: get the government completely out of it. Government has and will only continue to make this situation worse.
manicdee 8y ago
All you people claiming that the only way to reduce housing costs is to build more housing are missing the other only way to reduce housing costs. Remember, there is not only supply but also demand. We need to reduce population growth to below zero. A sustainable world population is probably close to 0.9B, far less than the current level of about 9B, and significantly less than projected “stable” population of around 11B Current world population is expansionist and we are down to less than 300 years worth of phosphates, with no plans to reclaim phosphates from the ocean.
- mdorazio 8y ago
  That doesn't work because it's not only general population growth that's driving housing shortages in cities, it's that people are moving to popular cities from less popular places. San Francisco doesn't have a housing problem because too many people had babies in the last 10 years, it has a housing problem because way more people want to move to San Francisco from other US cities than it can support. Another way to think about it: Japan's population is flat or declining depending on the stat you look at, but Tokyo is still increasing in population.
  - manicdee 8y ago
    Is Japan’s population currently 1/10th of its peak?
- jupp0r 8y ago
  Germany's population growth is already negative, people still want to live in cities, hence they grow while rural areas decline.

98 points by vector_spaces 8y ago

Cypher 8y ago

Nope, because they'll just setup a load of shell companies.

Dahoon 8y ago
Should there be a limit to how many Shell companies a lord can own?
- adrianN 8y ago
  You can probably set up a tree of shell companies.
  - Y_Y 8y ago
    The law is sophisticated enough to walk trees, and smart enough to have concepts like "beneficial ownership" where who _actually_ owns something matters, at least in common law.
ginko 8y ago
I always wondered if there might be some way to write a law that essentially bans clever financial tricks.
- dalbasal 8y ago
  Clever? no. Clever is how you get to where we are now. The law(s) that would need to re-written are the core laws that define what a company is, how ownership, liability and such work. These are all clever-complicated. They cross jurisdictions, and enable cascading ownership (companies, owning companies, owning trusts, etc.), each with different (incompatible) rules: tax, reporting & transparency obligations, definitions of terms like profit. They've been complicated constantly for hundreds of years, trying to encourage one things and discourage another, usually for a small picture reason. Most of the "tricks" involve using multiple types of legal "persons" registered in multiple jurisdictions with multiple ownership structures. New laws try to plug certain loopholes, open other ones, or achieve a political or policy goal. This complexity is why it's so hard to do anything with company law.
- EliRivers 8y ago
  There is, but the trend in US (and UK) law has unfortunately gone down a path that makes this very difficult. The letter of the law is given great weight, no matter the intention of the law. For example, in tax law, the game is to find ways to not actually violate the exact letter of the law. The idea of the spirit of the law has no force; everything has to be precisely outlawed. This, of course, is an infinite game that will never end, and leads to the endless games of shell companies and foreign domiciling and so on and so on; everyone knows that this is not what was intended, but it's what we have. The alternative is to write into law the intentions of the law, and allow subsequent assessment and judgement. Some places do this, and in this way the game of finding ways to ever so slightly dodge the exact wording of the law is a much less fruitful game.
  - dexen 8y ago
    >The letter of the law is given great weight, no matter the intention of the law. You are assigning the responsibility the wrong way around. The letter, and the intent, of the law have two points of interfacing: the point of execution (interpretation by the taxpayers or by the courts of law), and the point of redaction (the lawmakers distilling the intent into actual letter of the law). In case of the letter of the law not representing the intent, we would be much better off assigning the blame to the lawmakers. It is both their primary duty, and also what they have the best tools for. Putting the onus on anybody else than the lawmakers creates perverse incentive to get bribed for sake of writing loopholes into the law. When the lawmakers fail at properly writing the laws, punish the lawmakers: both vote them out, and also have the media launch investigation into possible corruption - the slip-up could very well be intentional.
- hjk05 8y ago
  There are plenty of laws that are specified in such a way that no matter how you structure your shell companies they still apply. The only way to truely get around that is to start having strawmen owners or unregistered ownership relationships, all of which will get you in trouble with the law.
reallydontask 8y ago
I'm not saying that this would work but as a thought experiment: Any entity that buys a house zoned as residential has to pay a tax of 100% of the value of the house. Private citizens get an exemption on this tax, if their main residence of which you can only have one, and are 18 or older. CGT is 100% (Deductions for home improvements could be added) The municipality builds affordable housing The tax would probably need to be gradually increased as it would likely cause a bit of crash on the housing market, say over 10 years. There is an obvious lack of political will to carry out such a measure and I'm sure that there are loads of unintended consequences
- dalbasal 8y ago
  This is pretty much the same as banning non-resident owners, bit it's formally a punitive tax rate rather than a ban. The problem is still the same problem, rent markets collapse.. so, public housing would have to plug that hole. I think it's important, in the context of public debate, to keep things simple. If an idea approximately transposes into another one... address them as a single idea. I'd catalogue this one under. "Owner-occupancy and public housing only." This is not realistic in most places, but maybe in the context of Berlin it's possible.
- pintxo 8y ago
  Won’t work. Due to higher property sales taxes here in Germany, any building complex worth more than a couple million is already owned by a shell company. If the building is to be sold, they sell the shell company instead to not have to pay property sales tax. Such a law would simply result in each building be wrapped in a shell company.
- stale2002 8y ago
  What you are suggesting would result in all renters being kicked out of the city. Now, if you want to live in a city, you have to Shell out hundreds of thousands of dollars. Berlin would only be for the rich, as no renting company would be willing to rent anything to people.
scotty79 8y ago
Who cares. You can still tax them progressively on what property descendant companies own.

sudoaza 8y ago

Yes, housing is a right not a speculation opportunity. Also there should be opportunities for people to get their own houses, like cheap credits with a monthly payment close to the rent.

alasdair_ 8y ago
>Yes, housing is a right not a speculation opportunity. Let's say I agree with this idea and let's also ignore the fact that by stating it's a right, we are implicitly stating that someone else needs to pay for it with their own money if you cannot. If housing is a right, does that necessarily mean that housing in a specific area is a right? I mean, I'd love a beachfront property in Maui but we can't all have that. If we build a few million houses in the middle of Kansas and tell people "there is your free house, as is your right", is that enough? Or do people have a right to a free house somewhere just because someone in their family happened to be lucky enough to live in the same general area at some point in the past? People in the US are generally allowed to move where they want. If a place becomes too expensive for them to live there, it's possible for them to move elsewhere if they must. I can definitely see that offering help with relocation could be good for society, and I can also see that having a mix of different people in an area is also good for society, but ultimately I don't agree that just because someone happened to pay rent at some point in the past, they and their descendants should be granted a perpetual right to stay in that proximate location forever.
- uasm 8y ago
  > "I mean, I'd love a beachfront property in Maui but we can't all have that" The person you're replying to is basically saying: "having a place you can stay in, to keep you alive and going rather than homeless and broken, a safety net in essence - should be a right". Your response: "but we can't hand over free beachfront properties in Maui for everyone". You're diverting the discussion ("but look at what communism did to Venezuela"). This isn't about free beachfront properties or luxury homes in Maui. This is about a single bedroom apartment with the most basic of utilities for people that wouldn't otherwise have the money or means to afford anything better: students, older folks, sick people, people that face hardships.

AndrewDucker 8y ago

Regulate behaviour, not ownership. If you want landlords to behave better, then rather than keeping them small, stick limits on what they can do.

scotty79 8y ago
You can only regulate what you can measure. Ownership is very easy to measure. And tax progressively.
- LoSboccacc 8y ago
  And suddenly one landlord owns ten companies trough subsidiaries and trusts. This is yet another nice trick that won't work. Besides, price and demand curve would still apply where it was one landlord or hundreds. What would help is to encourage housing density to increase supply. That has two main drive: building regulations (mandate building of a certain height) and taxation (tax building by footprint and not by height/units) Messing with ownership will only make people creative.
  - scotty79 8y ago
    > And suddenly one landlord owns ten companies trough subsidiaries and trusts. This is yet another nice trick that won't work. If you own anything that owns property (and etc. down the chain) then you pay same progressive tax on all properties owned directly on indirectly (minus the tax already payed by subsidiaries if the lawmaker feels so generous, he may not be, because why not discourage creative ownership). > Besides, price and demand curve would still apply where it was one landlord or hundreds. Sure, but if ownership is not that beneficial for large capital holders then less money is used to buy properties. If there is less money and same amount of properties then prices drop. Then more individuals can afford properties, and demand for renting is lower and rents go down. > What would help is to encourage housing density to increase supply. That has two main drive: building regulations (mandate building of a certain height) and taxation (tax building by footprint and not by height/units) If there's more property to buy but plenty of capital to buy then big landlords just buy more and hold, even empty property. Higher supply would probably drive down price a bit, but not as much as you'd expect. The problem is not only insufficient supply but competition between people who have too much capital and people who have barely enough. First group just drives the prices up for everybody, as high as the other group can barely suffer through.

adrianN 8y ago

The truth is that rents in Berlin are exceptionally cheap compared to other major cities. Try finding a flat in London or Paris for <10€/square meter/month that is half an hour bike ride away from the city center. The only way to keep rents this low in the face of rising demand is public housing that is rented out below market rates to low income tenants, or via a lottery.

mruts 8y ago
Or just a have a free market and abolish building codes.
- Cthulhu_ 8y ago
  Have a new Kowloon be built?
- adrianN 8y ago
  Putting the reasons behind building codes aside, the free market doesn't favor social mixing. Profits are maximized by enclaves for the rich and undesirables are pushed out of the city center. I think it's quite important for people of different social classes to live in close proximity and for their children to play together and go to the same schools.
- onion2k 8y ago
  Increasing the housing supply isn't working. Wealthy landlords can afford buy new houses at a good price for the builder, and then the landlord rents them out at the current rental price, so rental prices don't go down and people can't afford to compete with the prices landlords are willing to pay for houses which is keeping house prices inflated. Unless something significant happens to regulate the housing market we're going to end up with property being something that no individual owns, and everyone rents a place to live from a corporation.
  - deleted 8y ago
    [deleted]
- 8y ago

scotty79 8y ago

Not a hard limit. Just progressive tax that makes owning much real estate very expensive and in effect unprofitable.

dsfyu404ed 8y ago
Why wouldn't everyone's rent increase by whatever that tax is? There's already an incentive to create additional density, money. More units, more money. If there's some tax that the owner also has to account for that changes nothing. It's no different than any other increase in overhead. It just gets passed on.
- scotty79 8y ago
  > Why wouldn't everyone's rent increase by whatever that tax is? Because the tax is progressive, which means is not equal for all landlords, which means if big landlords increased their rent by their tax then nobody would rent from them because smaller landlords would have smaller rents thanks to smaller tax. This way large landlords no longer find owning real estate profitable and relocate their capital away from real estate market towards stock market or wherever where it is hopefully less harmful to other players. Less capital with same number of units drives the price down. More people can afford to own vs rent, so they buy and rent drops further because of lower demand. Ultimately everything lands on new equilibrium of lower rents with government having nice pile of cash on their hands free to use it to whatever new public housing development it fancies, driving prices even lower by increasing supply.
  - tryptophan 8y ago
    You seem to have the misconception that rents are set by individual owners(a large company, or 1 house/person landlord). In actuality, rents are set by the rental market overall, governed by supply and demand. It doesn't matter if 500 homes to rent are owned by 2 or 200 people. A tax like that would just make rents increase to X+Y for units owned by large landlords, where Y is the new tax cost. X would not change, making the policy achieve exactly nothing.

moccachino 8y ago

There is no need to put a hard limit, just an effective limit by having a general wealth tax. Money flows to where money already is, that's inevitable in a capitalist market economy. There's no need to change that, but progressively bigger piles of wealth should be progressively higher taxed to keep them in check, thus ensuring a competitive market. Edit: I guess I should have known mentioning wealth tax would get people nervous. But this is not about taxing your old grandma for her paid-off house. This is about small but increasing percentage, starting at maybe $1M-10M and really kicking in at $1B and above. You can then abolish dividend taxing (that's only fair) and perhaps income tax altogether.

scotty79 8y ago
Taxing general wealth would be enough if you just wanted money. But what you want is rather change in the behaviour of the wealthy. You want them to take away their money out of real estate market so that it does not inflate the prices. You could achieve that through progressive real estate tax. This would make holding and renting large amounts of real estate less profitable in comparison to other things rich invest their money into. They would sell so prices would drop and individual ownership would rise.
- moccachino 8y ago
  I don't mean this specifically as a solution to expensive housing, just a general solution to super disparate wealth inequality. The point is not to get more money for the state (income tax could be abolished to offset) but to put a natural negative feedback mechanism on wealth accumulation, instead of the positive feedback mechanism that exists today and makes the uber rich own the world.
  - scotty79 8y ago
    I don't think that the sheer fact of some people being incredibly wealthy does much harm and it also can do some good. When the money lands in the hands of rich people it essentially leaves the economy same way as if it was just burned because they won't be giving that money back to real world economy anytime soon. It just lowers inflation a bit so everything becomes a bit cheaper than it otherwise would be. Rich people being rich is fine. Them buying luxuries for their money or gambling (casinos, stock market, startups) does very little harm and even some good because some of their money comes back to other people and few of them do something good with it. The problem starts only when their money touches the parts of economy that are shared by other people because they drive the prices up by buying large amount of stuff and hoarding. Things like property or food or raw materials or land. We just need to make those activities unprofitable for them.

AllegedAlec 8y ago

There is a certain je-ne-sais-qoui about people living on the Karl Marx Allee trying to stop a rich person from buying their homes. From what I see though, the issue that started this is not that there are people controlling too much property, but there is a group of asshole landlords that use loopholes to increase the rent way to steeply.

voisin 8y ago

I do not think this implementation is a good use of taxpayer money or government effort. has developed a reputation for raising rents sharply by finding loopholes in Germany’s fairly strict rental laws. This is the item the government should rightfully be attempting to fix. Not acting as a market participant. In the meantime, the firm invests almost half as much as state housing companies do to keep its homes in good condition. State actors regularly spend 2x-3x their private counterparts with the same results. The difference relates to additional studies and more onerous self-imposed tendering requirements that create no additional value for the end user but allow the state to feel it has made decisions and spent taxpayer money in a justifiable way.

choeger 8y ago

Everyone and their cat wants to live as close as humanly possible to the hip center of the hip city. But of course, they literally do not want to pay the price. Why is there a vegan bakery specialized in Afghan Bagel[1] around the corner? Because there are enough hip, young professionals to pay for even the most unlikely specialty. Business can afford to cater to the most extraordinary taste, but only because there are so many fluent customers. These customers then simply drive prices. Due to the limits of public transportation, there are basically three ways out of this situation: 1. Rent ever-smaller, modernized apartments 2. Move away from the center 3. Get out of the city altogether Modern urbanites will not pick any of these options. They want cheap, large apartments with basically no insulation and 4m high ceilings. They do not want to travel more than 10min with the subway. And the thought of leaving Berlin borders on a crime against humanity. Now add to that the part of the population that lives in the center of the city for decades and literally cannot move anymore and you have a really bad situation at hands. IMO, it is ironic how the modern urban population that is so quick to assign blame for climate change (to car owners, carnivores), social injustice (to white men, preferably older), or simply a lack of mobile network coverage fails to understand their own contribution to the problems of a modern city. Sorry, but I needed to vent that. [1] Exaggeration. I don't even know if there are/were any Jews in Afghanistan, but I like good Bagel.

onion2k 8y ago
Everyone and their cat wants to live as close as humanly possible to the hip center of the hip city. I want to live as far from that place as possible.
- loco5niner 8y ago
  Agreed. Especially with the homeless problem in Portland.
crdoconnor 8y ago
It's ironic how much effort is given to justifying the actual amount while the question of "who gets that cash and why do they deserve it?" gets glossed over. It's a bit like when Russia privatised in the 90s and American economists told Russia that it really didn't who (i.e. oligarchs) owned everything provided everything is privatised.

deleted 8y ago

[deleted]

shadowbannedtoo 8y ago

1. Yes--there should be a limit on how much housing a landlord should own. 2. There should be a limit on what their spawn own. (We have the technology. Why not monitor where the money flows?) 3. Foreigners should not be allowed to buy own land. 4. I'm considering deleting this because most of you believe, one day; you will be the land barron. 99.99% of you will just be renters, or worse. The egos of Americans is what will do us all in. This is not your daddy's America. The rich have us all in checkmate.

ForHackernews 8y ago

Surprised there's no mention yet in this thread of Land Value Tax https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax It's an effective way to encourage development of more housing, and reclaim some of the costs associated with rising demand for real estate.

tjansen 8y ago
The problem with many German cities are that they are already full. Infrastructure can't keep up with the population. The building density is so high that it's very difficult to find room for more streets or rails, more schools and other public buildings. Parks are overcrowded at weekends. I think the only solution is to get people out of the cities (or maybe build new cities).
- ForHackernews 8y ago
  I find that hard to believe. Most German cities are low-rise, not skyscrapers. Elsewhere in this thread, somebody mentioned that Berlin's population today is still below its pre-WWII high.
  - pintxo 8y ago
    It was about 4m before the war. Is not about 3.6 Considering that today’s living arrangements (sqft per person) is quite different (larger) than 80 years ago, I am not sure this is working argument.
    - magduf 8y ago
      The simple solution is to build up. Build residential buildings twice as tall and suddenly having larger living units doesn't seem crazy. We have the technology today to build taller buildings than we did before WWII, more economically. The central problem with all these discussions about housing prices is construction. There isn't enough of it, it's too expensive in some places for what you're getting, the whole thing is completely broken and needs to be fixed. It should not be hard to build new housing units to modern standards.

newintellectual 8y ago

Sure, why not? Every other invalid, broken, illogical, anti-rational-economics idea is being endlessly and pointlessly re-tried in the modern world.

no_gravity 8y ago

Looking at the problem from a game theory perspective, it looks like this to me: Ambitious people want to live as close to as many other ambitious people as possible. So wherever the density of these 'Hipsters' or 'Cool People' increases, the desirability of the area increases. And by law of supply and demand, prices go up. The willingness and ability to pay higher rent decides who can live in those 'cool areas'. Now the 'cool people' might say to the landlords: "Hey, it's US who make this area cool! Not your houses! Why do we have to pay you for it?". It's an interesting point. Is it fair? I am not sure. Maybe. The same argument could hold for Facebook, YouTube or Reddit. It's the users that create all the value. Yet the platform providers extract most of it. I think that before we can form an opinion on different types of regulation, we should ask: If not willingness and ability to pay rent decides who lives where - what or who will decide instead? And what will be the result?

mistrial9 8y ago
in theory, theory is 90% of practice; in practice, theory is 10% of practice
dogcomplex 8y ago
Very interesting point, and comparison to social media. It seems to me that if most of the users of Facebook, Reddit, etc, were to band together and leave to somewhere they get a better deal - then the value of those sites would effectively become zero. If they could just wield it well, they have massive bargaining power in those relationships. But the cost of organizing such groups, building a new suitably-featured site, and moving there is a large limiting factor. The same relationship could be extended to most networks - including city/housing networks. But staging this mutiny on social media sounds tough enough - in real life real estate, I imagine it's nearly impossible! As such, landowners get a hefty upper hand, and there's not much power the tenants can wield in that negotiation - even if they do collectively provide most of the real estate value of a property. That said... what if this bias in network effects isn't eternal, and we humans just haven't been very good at group organization so far? I can imagine a userbase mad enough at Facebook might pick a date a year from now, get everyone they possibly can to sign up to leave on that day, and mass-migrate to an equivalent site with similar features (which doesn't farm $250 a year off each person in data - or at least gives those funds back to the user). With smart contracts to ensure commitment to the move, it could even be a fully-funded and well-organized migration - which might even have negotiation options to abort if Facebook met their demands. People would probably even do it just for the spectacle/coolness factor of being part of such a big rebellion. It's a bit of a pipe dream, sure, but it's conceivable something like this could happen. And let's face it, other than the data/hosting challenges, most of these big social media sites aren't doing anything that difficult to replicate. Hell, I'd go so far as to say almost any company worth the big bucks is mainly being priced on brand and network effects (minus IP/asset ownership). If the networks underlying this got better at organizing and moving/threatening-to-move to alternatives, they could eat that value and pass it down to consumers. Hell, it might even work out that they could be paid to use these services. The city/housing space is one I'd imagine would be wayyy slower to benefit from any of these potential consumer unions technologies due to physicality constraints, but I imagine it too could be translated into these mutinys. e.g. People could agree to leave a city en-masse to a new one with better (pre-negotiated) rent/ownership prices, leaving the old city high and dry in a bubble-bursting scenario. Of course we don't see this now - or at least, not in any organized form, just an economic drying-up when e.g. a factory closes and tenants can't afford their rent. But perhaps it's possible in the future as mobility, communication and coordination increase? Who knows.

tjansen 8y ago

I live in a different but still expensive Germany city and rent a apartment from a city-owned public housing company. The rent of the landlord's apartments is 20-30% lower than what you would pay in the free market, and in my neighbourhood I can get a pretty good idea of what people do to get one of those highly desired apartments. It's just crazy. I have heard everything short of bribing the person responsible for selecting renters. Calling her daily, flowers, pity stories.. another way to get into a highly coveted apartment is to get a recommendation from a renter who's leaving, basically taking over their contract. Often that involves paying absurdly high sums to the previous renter for floors and furniture left behind, or doing renovations for them. By the way, getting into the best kindergartens and schools appears to work like that as well. Many German cities are so overcrowded that you need to network like in socialism to get what you want, as there are things that money can't buy (or at least only a lot more money can buy). Those who are not well connected have a hard time to get the city's services, or at least will end up with worse facilities. The demand is just higher than the supply, and if the demand can not be controlled by increasing the price, people will find other ways to fight for what they want...

snarf21 8y ago
Thanks for sharing, I found that very interesting.
- snarf21 8y ago
  Wow, weird. I wasn't being sarcastic. It was interesting to learn about it from someone who lives there. I guess that deserves a downvote.
hawski 8y ago
Yeah, apartments is one part of it all. I'm trying to find a place in a kindergarten and it's hell. In Berlin kindergartens are free for some time and there are no free places. My wife today tried to find a place in a private kindergarten, no luck even in one for 800 EUR/month. If we knew German language and customs better maybe it would be easier. But then I would probably just think about creating our own. We're getting desperate. If anyone knows about a place in a kita in Berlin for a 2 year old, please let me know! Private or whatever, or some kind of coop.

smileysteve 8y ago

In the U.S., this limit is expressed via property taxes and homestead exemptions; a person living in a building that they own received a ~25% discount on their property assessment;

smallgovt 8y ago

I've always thought that the advent of self-driving cars will contribute to urban sprawl and lower housing prices. I'd happily live somewhere with a 1 hr commute if rent was $3k/month cheaper and I could get work done on the way there and back with no distractions.

AdrianB1 8y ago
In some cities 1 hour commute is from one side of the city to the center or the other way around, not from suburbs to city. My commute is 1.5 hours per direction inside the city, going out would take more. Also spending 2 hours in a car, even self driven, is not the best way to spend your time. Otherwise you can live in a RV parked in front of your office.

mltvc 8y ago

I moved from Belgium to Berlin 2 months ago. To me Berlin looks really spread out compared to Belgian cities and a lot of other big cities. To test my feeling I just checked this map [1]. It's clear that the population density in Berlin is lower than in other European cities like London or Paris. Even smaller cities like Brussels, Copenhagen and Stockholm are denser. So I think there is still is a lot of potential to relax zoning laws and let more homes be built. This is the best way to lower rents imo. [1] https://pudding.cool/2018/10/city_3d/ https://pudding.cool/2018/10/city_3d/

jillesvangurp 8y ago

I've lived in Berlin for 10 years now. I moved into my place 10 years ago this month and the rent would definitely go up without the rigid German laws to prevent exactly that. By at least about 30-40% I would estimate. That's walking distance from major landmarks like the Alexanderplatz, the Berliner Dom, and the synagogue on Oranienburgerstrasse. I pay a lot by Berlin standards but I live dirt cheap by any other standards. I don't know many places in Europe where I could live this cheap and that centrally. Around 950 euros a month for an 85m2 place, including heating cost. Very nice deal. You need to move quite far out of the center of most European capitals to find anything similar and forget about it in the bigger ones like London, Amsterdam, Brussels, or Paris. However, that's not the point for the locals here. They've seen people move in over the last decades, claim their public space, and as a consequence their cost of living is going up like crazy and they are not getting a lot in return. That sort of thing creates a lot of resistance. There are a lot of people in Berlin that are not big earners. And only a few years ago they were still getting awesome deals on huge places right smack down in the middle of the coolest city in Europe (after 10 years, I know this is true). I had friends paying less than 600 euros for a 100m2 place. OK, it was in need of a bit of renovation but still. Of course that was never going to last. The same place probably goes for around 1500-2000/month now. IMHO, as a foreign contributor to the gentrification, a lot of the housing shortage is artificial and it has a lot to do with the local legislation that is designed to conserve the status quo combined with the fact that the local government sold out early for way too low to big investors. At this point they don't have a lot of control because they sold out. Also, this city is growing like crazy and it has insanely high dept due to failed projects like e.g. the new airport that was supposed to open in 2012 an will probably not open for years to come. So, they are kind of powerless to fix things and their political legitimacy is based on an electorate that would favor draconian measures. So, obviously that kind of thing is very popular with the locals. There's no money to build new stuff and besides they've sold all of the land on which this would need to happen. So, the next best thing is populist measures that don't actually solve the problem but make it look like they are doing something. There actually is a lot of land in and around Berlin. This city is pretty far from other German cities so there is a lot of country side in all compass directions. Also inside the city there is plenty of space. This city still has less inhabitants than before WW II and the cold war (4.3M in 1939 vs, 3.7M last year). Thanks to the cold war it is kind of very spread out with lots of former no mans land, huge parks, etc. People strange to Berlin always ask where 'the center' is. There's no such thing. And there are at least two areas that could lay claim to that and half a dozen more that are probably more interesting in terms of nightlife, culture and other things you would find in most city centers else where. So, lack of land is not a problem in Berlin. Constructing things on it is. And housing projects for lower incomes is not a priority.

galfarragem 8y ago

Everything but freezing rents! Freezing rents literally destroyed Portuguese city fabric and renting market during that time: landlords didn't want to rent more houses neither repair the rented ones. Until recently wasn't uncommon to have old people renting a flat in Lisbon city center for 20€.

ip26 8y ago
I wonder if cities that freeze rents also freeze property taxes?
- manfredo 8y ago
  Some do. California froze property taxes state wide. Many cities then instituted price controls on rents. The result is prices over $10 per square foot in cities like San Francisco. Rent control means that renters have a big incentive not to move to different apartments. I've even heard stories of people continuing to rent their places after they've moved to different cities so that they can keep the same rents if they ever move back to San Francisco. Freezes on property taxes means that homeowners try to hold onto their home as long as possible. Because many home owners invest a big portion of their net worth into their house, they are often very adverse to anything that might make home values go down (like building more housing). Frozen rents + frozen property taxes = extremely high rents due to little supply of housing

berlinerluft 8y ago

It's horrible. They do everything to prevent more housing from being built. The fact is, the city is just popular, so people are moving in, which drives the prices up. The government of Berlin consists of incompetent socialists. Just look at the disaster of the new airport for a popular example. Please don't take any cues from them. They only persist because Berlin get's a lot of subsidies from the rest of the country.

thecleaner 8y ago
The thing is what would happen if they respond yoy he growing demand and build more housing ? If the economy of the city slows down even a little bit it will be hit hard with bad debt. Companies are currently mushrooming in Berlin. Keeping rents affordable could in fact help the people and help create more companies there.
- berlinerluft 8y ago
  I don't think the city should do the building, so I don't understand what you mean by bad debt? Affordable rents don't help much if you can't find a place to rent. It is not just a problem for people who want to move to the city, but also for people whose situation has changed, and who now can't move. (Like having kids, switching jobs, that sort of thing).

WC3w6pXxgGd 8y ago

How about this: get the government completely out of it. Government has and will only continue to make this situation worse.

manicdee 8y ago

All you people claiming that the only way to reduce housing costs is to build more housing are missing the other only way to reduce housing costs. Remember, there is not only supply but also demand. We need to reduce population growth to below zero. A sustainable world population is probably close to 0.9B, far less than the current level of about 9B, and significantly less than projected “stable” population of around 11B Current world population is expansionist and we are down to less than 300 years worth of phosphates, with no plans to reclaim phosphates from the ocean.

mdorazio 8y ago
That doesn't work because it's not only general population growth that's driving housing shortages in cities, it's that people are moving to popular cities from less popular places. San Francisco doesn't have a housing problem because too many people had babies in the last 10 years, it has a housing problem because way more people want to move to San Francisco from other US cities than it can support. Another way to think about it: Japan's population is flat or declining depending on the stat you look at, but Tokyo is still increasing in population.
- manicdee 8y ago
  Is Japan’s population currently 1/10th of its peak?
jupp0r 8y ago
Germany's population growth is already negative, people still want to live in cities, hence they grow while rural areas decline.