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As a person born and raised in Soviet Union, I strongly believe that whoever thinks that a proper economic response to raising prices is literally to order them

• tmalsburg2 7y ago
  Genuinely curious: what do you think would be a better response?
  • vtail 7y ago
    Raising prices = Demand > Supply. You can either try to curb the demand (by e.g. creating incentives for companies to build offices elsewhere, move government bureaucracy somewhere else, etc.) or improve the supply by facilitating new construction, which in most places on earth is limited by, again, local government restrictions. edits: grammar
    • sdegutis 7y ago
      What's wrong with legally limiting artificial price hikes to prevent people from abusing Demand > Supply for the sake of their greed? [Edit] To clarify, they seem to be "artificial" price hikes because they don't in any way necessary to cover costs. People realize they can charge more and get more money, so they simply do. That's inherently avaricious and unethical. Sure, maybe prices work themselves out, so that price goes down when supply goes up, but this seems to only be because suppliers can no longer get away with a higher price, because their competition is now selling it at a lower price. So I think it's far more ethical for a government to limit those kind of price hikes, which mainly just hurt the consumer, than to allow these abuses to continue in the name of "freedom".
      • piker 7y ago
        What's "artificial" about the price increases?
      • ThomPete 7y ago
        So basically creating an artificial demand stop is the solution to creating the "artificial" price increase?
        • jacquesm 7y ago
          The simplistic version of demand based economics do not take into account speculators who buy rental properties and do not rent them out to reduce supply and to help increase the price of the properties they are flipping.
          • ThomPete 7y ago
            Doesn't change that both are artificial.
      • rwj 7y ago
        Are you asking in the short term or the long term?
      • coryrc 7y ago
        Paul Krugman tries to help you understand: https://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent-affair.html https://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent...
      • ziziyO 7y ago
        Why is greed so bad here? The problem isn’t greed it’s the demand in the face of the lack of supply. Make other places more attractive or increase the supply available in this location.
        • wander_homer 7y ago
          > Why is greed so bad here? The problem isn’t greed it’s the demand in the face of the lack of supply. Greed is bad in this situation because you can make more money of luxury apartments than those suitable for people who are somewhere between the poverty line and upper middle class. Hence new apartments in major cities tend to be more and more expensive to satisfy the demand of wealthier people. Greed is also bad when existing apartments are made much more expensive, thereby forcing senior citizens who have been living there for decades and who are barely able to afford the rent to basically leave town, family and friends.
          • mamon 7y ago
            Upper middle class are usually not homeless, right now they occupy some pool of apartments in cities anyway. By building more luxury apartments you encourage them to move, thus leaving their old apartment behind, either by putting it on sale, or renting it out. Think of this like a domino effect: those earning $10M per year buy luxury residence, leaving their old house for those earning $1M, who in turn leave their own houses to those earning $500K, who leave their apartments for those earning $200k, and so on, and so on. In the end everybody benefits from new housing being built, even if it's only luxury housing. Also, increasing supply keeps prices down, thus decreasing profitability of buying houses as investment, causing larger share of apartments to be bought by people who actually plan to live in them. EDIT: yes, this effect might not work as described if is limited to just one city, because there might be a lot of people wanting to move from elswhere. Or more precisely: it will work, eventually, but it would require much more housing to be built to meet the demand.
            • kaybe 7y ago
              I don't think they're going to move that easily. Rent has been going so much it is eating a larger income share than before for many of them too. So what that leaves you with is disproportionate increase of demand and prices for smaller cheaper units.
      • andys627 7y ago
        The market works this out "automatically" when supply is greater than demand. If there are too many dwelling units then landlords will compete with eachother for tenants by lowering prices relative to eachother.
        • q3k 7y ago
          In the meantime while we wait for this to happen, people will keep getting evicted due to rising rent. How long do we wait? When can we expect results?
      • vtail 7y ago
        You are using emotionally charged words ("artificial", "abuse", "greed"), which makes a bit hard to have a constructive argument, but let me try :). One way to think about prices is as a signal. When greedy landlords raise prices, they send two signals: (1) To other landlords and wanna-be-landlords, saying it's an attractive market which would justify new construction or cleaning up your spare bedroom and putting it on the market, both increasing supply, and (2) to current and future renters, making it more economical for them to move elsewhere and thus save on their rent, thus reducing demand.
        • rolltiide 7y ago
          remember, gentrification is typically used as a pejorative good point in that it undermines constructive argument
        • sdegutis 7y ago
          I just edited the comment to clarify what I meant by those words. And they should be used because they are accurate in this context. Although I did convert "greed" to "avarice" in my clarification since I think it's more accurate here.
      • gumby 7y ago
        Doesn't that discourage people from building more housing, which is what would actually bring the price down?
    • supercall 7y ago
      You're assuming the high prices are a result of high demand. Speculators and other bad actors are also driving up prices.
      • jstanley 7y ago
        Speculators drive up prices by buying. They are "demand" as well.
      • pulse7 7y ago
        Speculators are "fake demand".
      • cco 7y ago
        I would imagine, but obviously can't speak for the parent poster, that if you suggested limiting speculation they could agree on a sensible implementation of that policy. I have not met anybody so far who thinks wealthy foreigners should be able to use real estate to launder money, store value, hide wealth, or otherwise not use real estate for what it is meant for, that is to say as places for people to live, play, or work.
        • jodrellblank 7y ago
          Since all that does happen, what relevance is it to say you haven't met anyone who supports it? Do you consider yourself the kind of person who should have met such people? Do you move in those circles? Do you meet a disproportionately large amount of people, or people at high levels who influence policy?
      • JanSt 7y ago
        The thing is, that there is no real "pure" speculation without the demand. In Berlin only 1.7% of housing is empty, of which 41% is because of ongoing modernisation, 31% because of renter currently changing and 12% because of mold or other damages. So only approx. 0.27% of housing is empty in hope of higher prices or because of other reasons. [1] The demand is real. No living space is created by this policy. Much will not be build because of it. [1] https://www.morgenpost.de/berlin/article214572349/Nur-1-7-Prozent-der-Berliner-Wohnungen-stehen-leer.html https://www.morgenpost.de/berlin/article214572349/Nur-1-7-Pr...
    • tmalsburg2 7y ago
      But how well has this worked in comparable cities like London or Paris where only wealthy people can afford to live?
      • vtail 7y ago
        And only really wealthy people can afford to stay in a 5-star luxury hotel. The underlying mechanisms are the same: when demand for a resource is greater than supply, you can either artificially limited the demand by some controlling body, or let the market bring them into equilibrium through pricing signals.
        • tmalsburg2 7y ago
          By electing a socialist government the people of Berlin have indicated that they don't want their city to become a five star hotel. Simply letting the market take control is therefore not an option.
      • mixmastamyk 7y ago
        I understand it worked in Vancouver where it was tried. I've not heard news that London or Paris has tried.
    • fpoling 7y ago
      The problem is that market reaction can be too slow. In such case introducing new rules can be good as they destabilize the slow status quo and makes things to move in the desired direction quicker. Berlin government hopes that by restricting rent in older buildings it will push the market to build quicker.
    • quakenul 7y ago
      When things go bad government should intervene to protect people. These steps are always going to be extraordinary, because the situation is extraordinary, but it is the very role of government to apply necessary fixes without false pride for any economic or governmental models. Of course, questions as to how one ended up in a bad situation have to be asked. Underlying issues should be fixed. But when things get out of hand, when extraordinary action is deemed necessary to adjust for an untenable situation, it is not only right but paramount to take action. As is with all issues, people will disagree with any specific course of action. By all means, vote to that effect.
      • WkndTriathlete 7y ago
        > But when things get out of hand, when extraordinary action is deemed necessary to adjust for an untenable situation, it is not only right but paramount to take them. That rationale is also how wars get started. Not that I disagree with you, per se: lethal "cures" and excessive pollution were killing people in the early 20th century in the US and government intervention was required. But the Korean and Vietnam wars were also the result of people thinking that the spread of communism was also untenable.
        • quakenul 7y ago
          Nope. Just like physics is exactly not how an atom bomb got dropped -- in an extremely important distinction between physics and atom bomb dropping -- there is a very important distinction between government intervention and going to war. In a complicated world things will correlate. I hope this neither makes a generalised case against physics nor government intervention.
    • rchaud 7y ago
      How do you know that these supply building and incentive programs are not part of the plan? Such programs take years to materialize and show impact. I would imagine that's why they voted on a 5-year freeze.
    • mrzool 7y ago
      > Raising prices = Demand > Supply That’s a simplistic view of the problem (simplistic as in introductory-economics-textbook-simplistic), and you have no idea what you’re talking about. Demand is obviously a factor (duh), but the main reason for the terrible, pathologic inflation of the real estate prices in Berlin is called speculation, together with government incompetence and, in some cases, blatant corruption. This rent cap is an emergency measure meant to stop evictions and give people around here a break. Of course it’s not going to solve the problem in the long run. No one is expecting that.
      • JanSt 7y ago
        Can you elaborate on what you define as speculation and how it increases prices?
    • peterwwillis 7y ago
      So we just need to magically create more housing and make it cheaper, or magically prevent people from wanting to live there. I'm not aware of either of these things happening in any modern city. (well, the latter happens whenever the local economy tanks)
    • Vinnl 7y ago
      Hmm, this description made me wonder: wouldn't this measure reduce demand from investors looking to buy houses to rent out? In other words: if the bottleneck for new housing isn't that nobody's buying them, then this would at least lower the prices for people looking to buy a house to live in?
  • deelowe 7y ago
    Address the issues that are limiting the supply.
  • georgeecollins 7y ago
    I am not the OP, but based on the point of view perhaps the OP would say: encourage more housing development to lower prices?
    • skohan 7y ago
      Wouldn't this do that indirectly? If you can't buy up existing housing stock and increase rents to gain revenue, you have to build new units if you want to charge higher rent.
  • wutbrodo 7y ago
    If the market isn't the most efficient way to allocate resources, even allocating them centrally according to clear rules makes more sense than just commanding prices to stop rising, as if a price is merely an arbitrary number dreamed up by a seller instead of a description of a market reality that the economy will contort itself to move towards.
  • letier 7y ago
    Taxing vacancy
    • JanSt 7y ago
      Vacancy is extremely low in Berlin
      • letier 7y ago
        True actually, after some quick research. There is only roughly 18000 empty apartments.
  • jacquesm 7y ago
    Build more housing, ensure that it can't be bought by speculators, incentivize renters to buy the property they are in.
  • sonnyblarney 7y ago
    If there is a 'market abberation' find it, and deal with it. For example, if tons of foreigners are buying homes, this might be a problem. Regulate it. If tons of people are buying 2-3 homes and renting, thereby driving a wedge between home-owners/non-home-owners, regulate that. If the issue is low interest rates, which are necessary for the regular economy, consider building in housing prices into the inflationary index, because it's a real thing that people have to pay for. This might affect how rate are set. That said, it's ECB and not really Germany anymore. FYI this should hint at the incredibly serious problems of Euro-area countries losing monetary policy by joining the Eurozone ... If it's really just supply/demand build more homes. It could be a function of older, crappier areas finally getting caught up in the modern world, in which case this might be an existential change that Berlin will have to deal with. The 'downtown' spots will eventually be paid for by people with decent jobs. Some pretty harsh and weird rules would have to be put in place to stop this. Zone some areas for affordable housing. My bet is the answer is mostly to build, but also that it's a 'neighbourhood' issue i.e. Kreuzebeurg (sorry, forget the spelling) is becoming gentrified and that's going to be a tough nut to alter.
    • HillaryBriss 7y ago
      another interesting area: regulations on building which drive the costs upward. case in point: Los Angeles requires that new construction include parking for a certain number of cars per housing unit. usually this means placing the new building on top of a subterranean parking structure, which costs a lot more than a building on a normal foundation. and new construction must also include a certain amount of outdoor space per unit which also reduces the number of units which can be built into a given lot. all of this overhead is passed along to new tenants/buyers.
      • just_myles 7y ago
        I was at a city council meeting for my specific city and that requirement for parking spaces per unit does not fully support all tenants. So street parking goes way up on a traditionally quiet street. It happening more and more as they start erecting these new "luxury" apartments.
  • cerebrum 7y ago
    No need to reinvent the wheel: https://en.wikipedia.org/wiki/Public_housing_in_Hong_Kong https://en.wikipedia.org/wiki/Public_housing_in_Hong_Kong
  • rolltiide 7y ago
    I think there could be a better way to regulate how rents are determined, for example: One symptom is that current tenants are subject to arbitrarily high rent increases, masquaraded as "market rate" But when they finally evict, the landlord has to actually change the rent to something different until someone bites. Often times it is much lower or has some other concession. If there were some way to regulate this behavior without easy ways to get around it, it could alleviate some pressure.
    • kaybe 7y ago
      > Often times it is much lower or has some other concession. No, it's going to become higher than a rent increase would allow (those have a limit by law, new contracts don't (yet)), that's the problem. As long as you stay put you're mostly fine but if you have to move.. urgh.
      • rolltiide 7y ago
        > No, it's going to become higher than a rent increase would allow (those have a limit by law, new contracts don't (yet)), that's the problem. Yes I get that But there are ALSO circumstances where a landlord TRIES to have a much higher increase as new contracts don't have a limit, but they go way above what actual participants in the market would bite at. There are also circumstances where EXISTING tenants don't have a limit on increases This observation is not just about Berlin.
  • pinkfoot 7y ago
    New, affordable, extremely good schools in open fields.
  • fredm-de 7y ago
    Modernize public transit to better connect the outer quarters. Build new apartments on these outer areas.
• StreamBright 7y ago
  Government intervention always work! ;) I am surprised these measured tried again when we know already the outcome. This is the definition of insanity.
• fpoling 7y ago
  On a city level socialist policies are OK and can be even good. This is similar how communism works on a family level. In Soviet Union the problems came from central planning for the whole country with essentially no feedback loops for bureaucrats and party bosses in charge.
• CPLX 7y ago
  As a person living in New York who thinks rent stabilization has been largely more successful than not at achieving its goals, I disagree.
  • partiallypro 7y ago
    The data disagrees with you, it has caused shortages. Especially pre-90s. Since I was downvoted for stating things that are factually observed: https://web.stanford.edu/~diamondr/DMQ.pdf https://web.stanford.edu/~diamondr/DMQ.pdf https://www.bloomberg.com/opinion/articles/2018-01-18/yup-rent-control-does-more-harm-than-good https://www.bloomberg.com/opinion/articles/2018-01-18/yup-re... https://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent-affair.html https://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent... https://www.economist.com/the-economist-explains/2015/08/30/do-rent-controls-work https://www.economist.com/the-economist-explains/2015/08/30/... http://iea.org.uk/sites/default/files/publications/files/Verdict%20On%20Rent%20Control.pdf http://iea.org.uk/sites/default/files/publications/files/Ver...
    • CPLX 7y ago
      The goal of rent stabilization is to make neighborhoods more stable. The concept is right there in the name, and that's exactly what it does. It's not built to stop shortages, or to increase the availability of apartments for people moving to the city.
      • chimeracoder 7y ago
        > The goal of rent stabilization is to make neighborhoods more stable. The concept is right there in the name, and that's exactly what it does. No, it's not. Rent stabilization is, purportedly, about ensuring that poor or low-income residents specifically aren't pushed out of neighborhoods or New York City entirely due to gentrification and rising rents. In terms of making housing affordable for those people, rent stabilization is incredibly ineffective.
        • CPLX 7y ago
• Causality1 7y ago
  The same thing will happen there as has happened in California. Landlords exit the market, developers stop building new housing, and ten years later you have a housing crisis twice as bad as the current one.
  • lostdog 7y ago
    Rent control doesn't apply to new construction in California.
    • WalterSear 7y ago
      Requiring a portion of builds be below market rate is an equivalent disincentive from builders perspective.
      • lostdog 7y ago
        Interesting point. It would only apply to the 15%-25% of below-market-rate units, so yes it would reduce supply, but not as much as making the entire building rent controlled (or below market rate).
        • WalterSear 7y ago
          Building is quite a risky proposition, mostly due to the large investments required, the time to recoup them, and the uncertainty of the costs. Delays and unforeseen issues quite often turn a construction into a money-losing venture. Once those risks are factored in, despite the large return on successful investments, the profits aren't great. So, it doesn't take much to make a proposition unattractive. Luxury apartments tend to be more attractive to builders not simply because they can make more money, but because the increased profit result in lower risk.
• perfunctory 7y ago
  In the west we don’t order prises to stop rising. We just invade a country when oil prises become too high.
• rchaud 7y ago
  I wasn't aware the Soviet Union allowed rich investors to buy up chunks of the housing supply and rent them out as hotels without a business license, while also bypassing the numerous regulations that hotels have to abide by.
  • dgellow 7y ago
    If you’re talking about Airbnb, as far as I know what you’re describing is not allowed in Berlin.
    • rchaud 7y ago
      The ban was lifted in May 2018: https://www.citylab.com/life/2018/03/berlin-airbnb-vacation-rental-regulation-law/556397/ https://www.citylab.com/life/2018/03/berlin-airbnb-vacation-...
      • dgellow 7y ago
        Interesting, thank you for the information. Though, from your link: > It nonetheless imposes some pretty firm conditions on vacation rentals and makes the penalties for ignoring them far more stringent. All landlords seeking to rent out their home will only be allowed to do so if they get a general permit from their borough, even if they intend only to rent their property out for occasional short stays. While landlords applying for a permit at their primary residency will likely be approved, second home owners may face a more rigorous process. Landlords who leave an apartment untenanted, meanwhile, will need a special permit from the borough to do so after three months of vacancy without having a permanent tenant registered, cutting the current vacancy grace period in half. Most strikingly, the maximum penalty for breaking the rules has been multiplied by five, to a potential fine of €500,000 ($617,000).
  • jupp0r 7y ago
    No, they just declared housing to be affordable (in the $20/month ballpark region) and people had to apply 10 years in advance to move to a larger apartment. This is my parent's experience in east Germany, should be similar to Soviet Union.
• jseliger 7y ago
  It's like we never learn https://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent-affair.html https://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent... https://www.theguardian.com/world/2015/aug/19/why-stockholm-housing-rules-rent-control-flat https://www.theguardian.com/world/2015/aug/19/why-stockholm-...
  • 2tab 7y ago
    That Stockholm article is deceptive at best. The Stockholm housing market suffers above all else from lack of regulation of mortgages. The rental market simply can't compete with a 100 year double mortgage without default. The result being Sweden having among the highest amount of household debt of the OECD countries. Of course the head of the landlord lobby organization wants their members to be able to charge higher rents despite few rentals being built today when they are able to charge three times the rent of older rent controlled units. As most people simple can't afford them.
• Dwipatra 7y ago
  So how do they solve this in Russia?
• LifeLiverTransp 7y ago
  Yes, in capitalism, the strong man setting the price is the one who owns the city by owning the #something# fund. This is a outrageous uprising by the people against dominant male. If stalin could see this, he would purge that idea right out of society.
• johnnyfaehell 7y ago
  To be fair, this isn't their first or only response. They're building housing as fast as possible. Within a 5 minute walk from my apartment in the last year there has been 5 brand new housing towers built. They've also introduced laws to stop people from buying up apartments to rent out via Airbnb. Considering even with the law that limits how much they can raise their prices, they're just doing unneeded renovations to get around that law and increase the rent 40%. This law in combination with the housing construction going on throughout the city and the Airbnb law I think it's the right direction.
  • vtail 7y ago
    People buying apartments to rent out via Airbnb is not inherently a bad thing - it just indicates there is existing unsatisfied demand for short term rentals, which cannot be fulfilled by hotel industry. And guess what - hotel industry is another example of an industry heavily regulated by government (zoning laws, construction permits etc.). So the Airbnb problem most likely has the same underlying root cause.
    • bpfrh 7y ago
      No it is an indication that people are cheap and a person who bought a apartment as an investment now makes 30-60€ a night vs about 600 a month. There is a reason hotels are expensive. Airbnb does the same as uber. They start a business with either exploits a loophole or is illegal. Btw. at least in austria, if you want to rent your apartment on such a plattform you have to clear it with everyone who lives in that house. Of course nobody does that and of course the plattforms don't verify that, because they are "just a connecting plattform, we don't give any warranty but of course we get millions of of this"
      • flanbiscuit 7y ago
        > if you want to rent your apartment on such a plattform you have to clear it with everyone who lives in that house. I love this idea. My friend currently lives in a building in Brooklyn where a person rents out rooms in his apartment on AirBnB and it's been nothing but an annoyance since day one. I'm glad NYC has put some restrictions on AirBnB .
• SomeOldThrow 7y ago
  Anyone who looks at regulations like this and sees the Soviet Union is themselves a lunatic. This is not a planned economy, and people do not need to profit from housing to build it, and housing should be a human right.
  • innocentoldguy 7y ago
    If you take the monetary incentive of profit away, what other motivator exists for people to take huge financial risks and expend vast amounts of money to purchase land and construct houses and other living structures? I guess you do have the right to wander into the forest and build yourself a fortress out of pine cones and moss, but if you want to live in a modern house with modern amenities, there's going to be a profit incentive behind it. It's basic economics.
    • kaybe 7y ago
      > I guess you do have the right to wander into the forest and build yourself a fortress out of pine cones and moss.. Is there anywhere where this would be legal? Certainly not in Germany.
  • refurb 7y ago
    OK, then look at NYC in the 1970's. Severe rent control resulted in crumbling buildings. Price controls are bad policy.
    • bpfrh 7y ago
      NYC is in america which has a complete different economic Idea. While Germany was and sometimes still is a social market economy America is a full blown free markt, of course just slapping a rent control and nothing else is a bad idea
      • refurb 7y ago
        America is a full blown free markt NYC? No, it's not a full blown free market by the very fact they have rent control.
• IAmEveryone 7y ago
  That's true for, say, bread. Or really any fungible good where labor makes up most of the price of the product. If you artificially suppress those prices, there isn't enough money to pay the farmers and bakers, and no bread will be made. This freeze actually exempts new construction, so the whole problem is mood. But it's still interesting to think it through, and the result is different than simple economics may make you think: Housing is different than bread, or cars, or mobile phones. It doesn't actually cost meaningfully more to build a new house in the middle of Berlin than to do so in some empty village in the countryside: the costs of material are the same, and for the most part so is labor. The only difference is the cost of land. The effect, according to the basic supply/demand scheme of economics you are invoking should be to depress land value, with no effect on the amount of housing units being built. That's true as long as the rent it is possible to charge is high enough to cover the costs of construction. One can take a guess at the actual value by looking for the cheapest rents in newly constructed housing, which for Germany is about half of Berlin's average. In the limit, land value would tend toward zero, although that's rather theoretical because at some point owners just wouldn't care about selling. This hints at some additional factors that may have minor impact: maybe there is an expectation that land value will rise again after those five years, and the actual discount in the market is therefore smaller, etc. But even then, it's only land value that would be affected.
  • ashtonian 7y ago
    Location location location. You seem to be asserting that the land value is arbitrary simply because it's located in a different area. The value is higher because the land is a lot more useful/productive / accessible/developed. You can't just wipe all that value away.
    • Slartie 7y ago
      But you can arbitrarily depress it. Its value is the sum of all positive aspects (such as good infrastructure, nice views at a river) and all negative aspects (such as air pollution, noise). Implementing a restriction on rents adds a huge negative aspect that however is only negative for those interested in investing for appreciation, not at all for those who eventually live in that place. This should indeed depress the lands' value, just like it would happen if an airport opened up right next to it, but without all that noise. But as long as land costs plus construction costs are still lower than whatever you can get in return via rents, investors should still be inclined to invest in new buildings, they should just not be willing to pay too much for the land, because there's this big negative aspect connected to it.
• jordanbeiber 7y ago
  Soviet and planed economy truly sucked, so an anarchy style laissez fair market is the only other viable option? Why do something equally retarded in the other direction? Reasonable regulation is the only way we can hope to achieve a decent balance in a social democracy. Something that arguably works pretty well here in parts of the west.
• slg 7y ago
  These kind of moves are band-aids that don't provide a viable long term solution. But sometimes the hospital is really far away and using a band-aid allows you to temporarily protect yourself from excessive blood loss or infection while you wait to get proper medical attention.
• johnchristopher 7y ago
  Why, how do you do it in Soviet Union ?
• wnevets 7y ago
  Has everyone forgotten about the price freezes in the US? This is hardly a socialist tactic.
• bpfrh 7y ago
  As a person living in austria, I strongly believe that goverment build housing and strong regulation of pricing and the market is the only way to keep housing affordable for all people and not make it a speculation object like in germany/berlin. Did you know that in the late 90 the housing was good and affordable? And that a big chunk was owned by the city or state? That these things were then sold for pennies, to companies who only want to exploit people? Did you know that after there were laws passed against raising the rent exorbitant, many companies cheated? They raised the cost that you have to pay for the house services which are included, without doing that services or charging way to high edit: fixed formatting
  • stefanfisk 7y ago
    the exact same transition happened here in Sweden, and now the housing market is so fucked that it might take down the economy in the next recession.
    • afjl 7y ago
      What's wrong with the housing market in Sweden?
  • linuxftw 7y ago
    > Did you know that in the late 90 the housing was good and affordable? Obviously, affordable is subjective. People in cities have demanded ever-expanding services. Better sanitation, better public transit, electricity, everything new has to be super safe, everything new has to have 16 handi-capable toilets per 1 handi-capable user, subsidized housing for the poor, free education, free higher education, free healthcare, higher taxes on businesses, higher regulation of existing businesses. Some of those things are probably necessary. Some are probably really nice to have. Everything has a price. Rent control is a great way to make slums. There's no market incentive to make your placer any nicer than someone else's because you're competing for a set amount of $$. The good landlords will exit the business, and you'll only have slums.
  • codedokode 7y ago
    But there are different houses. Typically the most expensive are those located in the center of a big city with good transportation access. Do such apartments need price regulation? Poor people could live somewhere further from center where the prices are more affordable. Otherwise you make those nicely located apartments unavailable for other people who are ready to pay more.
• nine_k 7y ago
  My hope is that it's not a proper economic response, but short-term political firefighting. That is, "something has to be done" while the capacity is being built, and it cannot be built fast enough. Surely price control will result in various shortages, lines, increased corruption, etc. OTOH this may be, at least in the politicians' reasoning, not as bad as rapidly pricing out their constituencies out of the houses where they live. And if not directly their constituencies, this applies to all low-wage workers needed by the city economy; raising their wages abruptly would raise other prices abruptly, which may be politically undesirable. So, as a temporary throttling measure this may be not so nonsensical, with emphasis on "temporary".
• coldtea 7y ago
  And as a person born in the west, ordering prices to stop raising is a useful and often necessary tool in the economic policy toolkit.
• s17n 7y ago
  Capping rents isn't like capping bread prices or whatever - the money is just going to the land owners, there's no elasticity of supply and no marginal cost. Capping rents just means that instead of allocating the scarce housing to whoever can pay the most, and giving a bunch of free money to the rentiers, you allocate the scarce housing more or less randomly, and the renters in aggregate keep more of their money.