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The problem isn't developers at all - they make only a small margin. The people who are abusing the system are equity investors who demand a return on their in
by closetohome 7y ago
The problem isn't developers at all - they make only a small margin.
The people who are abusing the system are equity investors who demand a return on their investment within as little as 2-3 years, leading to unrealistically high rents. All rent control is doing in this case is forcing investors to take a longer period of return.
- Roritharr 7y agoDid nobody think that to invest, you need to have liquidity? It's called LIQUID for a reason. If another place has better investment opportunities, the investment will simply cease. Why would anyone take their LIQUID assets and put it into real estate (in german it's called IMMOBILIEN, meaning immovables to make it clear) in a place that actively discourages return on invest?
- closetohome 7y agoIn some cities that would absolutely be an issue. However in this specific case I don't believe Berlin will ever lack for real estate investment. In other popular cities we've just seen the type of investor change, from opportunistic to activist.
- ghostly_s 7y agoI'm curious about this, which cities with those be?
- Consultant32452 7y agoIf you flush the market with supply, you get the same result. You also get the side benefit of more poor people have access to housing. The rent control model means a small portion of the poor wins the artificially low rent lottery.