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Freezing rents is not meant to be a solution for a lack of housing. It’s a solution to the explosive increase of rents of existing ones. There are lots of peop

Freezing rents is not meant to be a solution for a lack of housing. It’s a solution to the explosive increase of rents of existing ones. There are lots of people where the rents of their current apartment have increased so much, that they had to move out. This solution is trying to fix that. Also freezing rents doesn’t mean Berlin will stop building new houses. If there is big demand for housing in a city one needs both: 1. make sure people currently living in the city are able to do so in the future 2. make sure new people coming to the city have available space Freezing rents is aimed at problem one. These solutions are not exclusive.

zanny 7y ago
Pretty much every western nation has systemically failed to recognize or support the insanely high demand for high density living in the 21st century. That is where the future of economics is, where the future of humanity in general pretty much is, and every democracy is consistently demonstrating the total inability for legislatures to sacrifice the advantage of those lucky enough to inhabit cities as they exist now for the benefit of all those who would grow the economy and future in the cities tomorrow. Largely because those in the cities have the money and influence to buy the politicians.
- jimmaswell 7y ago
  I don't buy any of this. Growing up everyone around me saw the city as somewhere you begrudgingly went out of necessity and only lived there if you had no choice, and I'm inclined to agree. In virtually every aspect I find more countryside-ish living much more pleasant. Consider virtual reality and remote work. I imagine much of the workforce will move to virtual offices in the near to medium-far future when corporations finally come around to realizing they don't have to waste so much money on rent. There's no need for programmers, graphic designers, reporters, and employees of lots of other professions to work in a physical office. So really, as cities become less of a necessity to certain jobs, I expect a moderate exodus to nicer areas, halting growth or even decreasing population in urban centers.
  - TremendousJudge 7y ago
    >Growing up everyone around me saw the city as somewhere you begrudgingly went out of necessity and only lived there if you had no choice I assume you grew up in the United States?
    - jotm 7y ago
      Cause European cities are so much better? They're not. Overcrowded, overpriced, just for jobs and getting out asap.
    - jimmaswell 7y ago
      Yes, upstate NY.
      - eli_gottlieb 7y ago
        Where? I ran screaming from the Albany area first thing I could when I turned 18.
        jimmaswell 7y ago
        Hudson Valley, somewhere around Hyde Park. I went over some of the features of the area here: https://news.ycombinator.com/item?id=20218742 https://news.ycombinator.com/item?id=20218742 What's so bad about the Albany area? I haven't been there since I went as a kid for some medical facility.
  - 0xffff2 7y ago
    >Consider virtual reality and remote work. I imagine much of the workforce will move to virtual offices in the near to medium-far future when corporations finally come around to realizing they don't have to waste so much money on rent. There's no need for programmers, graphic designers, reporters, and employees of lots of other professions to work in a physical office. So really, as cities become less of a necessity to certain jobs, I expect a moderate exodus to nicer areas, halting growth or even decreasing population in urban centers. People have been saying this for decades. Personally, I'd like nothing more than for it to be true so that I can ditch my expensive Silicon Valley apartment. But it's not. Lately I've even been seeing a lot of pushback from people who feel more productive in an office setting and don't want to work remotely.
- ng12 7y ago
  Agreed. I'm still shocked about how pervasive it is. New York, San Francisco, Denver, Austin, Vancouver, Montreal, London, Paris, Berlin, Warsaw. It seems like a complete binary: cities are either dying or in the midst of a "housing crisis".
  - deleted 7y ago
    [deleted]
- Zacharias030 7y ago
  >Pretty much every western nation has systemically failed to recognize or support the insanely high demand for high density living in the 21st century. While I agree that we have an unsolved problem here, isn't a city's government mainly responsible to do good by the people who inhabit that city and make up its electorate? That's how western democracies work, so no surprises there. I know of many people all over the world who would like to move to the US and still the 'insanely high demand' has not been supported.
- tarsinge 7y ago
  Because the root cause is not always high demand, it’s also speculation. Real Estate is now cool again (just look at investing forums or subreddits), and foreign investor money is flowing. Look for example at Portland (OR) how the rent increase correlates with the population increase. The current urban hype alone can not explain these numbers. Also another example since a few years a lot of high earning people in Paris are actively moving to cities with a better quality of life and climate (like Nantes, Bordeaux), in fact as high than 80% would do it if they could [1]. Yet bizarrely this has absolutely no impact on the market. [1] https://www.lepoint.fr/dossiers/economie/bac8-saut-secteur-prive/80-des-cadres-parisiens-veulent-fuir-paris-01-09-2016-2065217_3163.php https://www.lepoint.fr/dossiers/economie/bac8-saut-secteur-p...
  - camgunz 7y ago
    I would give you 10 upvotes if I could. The main reason for rent (and housing prices in general) increases is speculation and investment. There is billions of dollars in rentals and mortgages, and it's in everyone's interest that real estate worth goes up... unless you're trying to rent an apartment or buy a house. Someone pretty smart once said you can't have both real estate as an infinitely increasing source of wealth _and_ affordable housing at the same time. You only get to pick one.
  - candybar 7y ago
    This doesn't make any sense - real estate speculation would increase the purchase price of real estate but cannot directly impact rental rates. Speculation means people are bidding up prices for real estate beyond what's supportable by current demand, based on expected future demand. This generally doesn't make sense in the rental market - as a tenant, you're not entitled to benefit from any future increase in demand and it doesn't make sense to pay more that what the rental is worth to you now. This means rents, in aggregate, are a relatively accurate measure of the current supply and demand, free of speculative intents. Ironically, certain types of rent control laws could lead to the rental market being influenced by speculation. Rent control laws effectively turn tenants into partial owners - this means, depending on the law, it may make sense to rent at an above-market rate, if that allows you to keep renting the same unit at what would later be a below-market rate. Likewise, from the landlord's perspective, it may not make sense to rent even at a market rate, because to do so may lock you out of getting what would be a higher market rate in the future.
- hnick 7y ago
  It's so strange - the promise of the "information super-highway" in the 90s was that proximity wouldn't matter as much. But if anything it matters more, since every minute spent idle (e.g. travelling to meet someone) has a higher associated cost due to the opportunity cost of lost productivity. So we tend to clump and cluster.
  - thirdsun 7y ago
    > But if anything it matters more, since every minute spent idle (e.g. travelling to meet someone) has a higher associated cost due to the opportunity cost of lost productivity. Which sounds like another vote for remote work instead of clumping and clustering. Why care about proximity and the time it takes to travel when everyone you'd want to meet, regardless of location, is a message, call or video conference away and reachable from your home, favorite coffee shop or local office? And no, I'm not saying that this has to replace all face to face interaction, but I think it should become the default for work environments that are compatible with this approach.
    - hnick 7y ago
      I totally agree. I'm just trying to get my head around why it seems that our promised decentralisation never came to be. Maybe old habits just die hard.
      - hwio 7y ago
        It is decentralized, just family rather than work.
    - majewsky 7y ago
      Speaking as a German, a big part of why this decentralization isn't happening is that Germany's internet infrastructure is a fucking joke. I'm sometimes even having trouble with getting consistent 3G coverage in large city centers. When driving around the countryside, it's frequently 2G or no service at all. And it's looking similarly bad for broadband internet access in homes. My parents don't have any broadband service whatsoever. They use a 4G hotspot to go online, and get an average connection speed of 170 KB/s. This is par for the course in rural Germany.
- pergadad 7y ago
  Yes and no. Yes your want to make an offer to those arriving, but you also don't want to destroy a city by letting prices go so high that only a certain caste of people is able to afford it - think SF. Not everyone can be rich enough to afford decent living inside a city. And yet you still want cheap burgers and services, as well as public schools and trash collection and police. None of those can afford big city living if you allow the tech & big business crowd to simply price them out of the market.
briandear 7y ago
They are necessarily connected. Supply and demand is connected. If rents are frozen, that lowers housing liquidity (because people won’t move if their rent stays “affordable,”) which reduces supply and necessarily creates a shortage. It lowers mobility as well since there is a shortage of available housing which leads to inefficiency— if someone moves to another job in another part of the city, that person would be less likely to be able to move. Then, there’s added stress on transit since people must commute less optimally. On the issue of new housing, who would risk capital to build new housing when their returns would be subject to the whims of rent caps? What’s the incentive to improve existing housing when the revenue for doing so is limited? Basically, what’s the point of making non-legally required improvements if you can’t raise rent to cover those expenses. That’s going to result in a decline of housing quality over time. Unless the government is also going to reduce taxes and expenses and inflation for property owners to help offset the lack of revenue growth? Property owner expenses are going down are they? That lack of revenue growth also means less future capital to build more housing. Rent control benefits a specific group, but ends up costing the whole far more than it saves the few. It’s popular to “protect” the visible because they are visible and typically sympathetic figures. But there is a greater harm being effected that is less noticed because the face of that effect is the “greedy” property owner, but the invisible victim is the overall public.
- fxleach 7y ago
  I agree with some of your points but I think you're misguided on a couple. >because people won’t move if their rent stays “affordable,” This is the issue rent control is trying to solve. There will always be rich people that can afford to live in the city, and they basically raise the bar on what developers and landlords think people can afford. They stay comfy while the rest basically pour all their paycheck into rent, forgo savings, and feel stuck. What about the rest of the people that work in the city with median income (or lower) jobs? They get pushed out further and further from city centres. In turn, that creates enormous strain on public transit and traffic congestion becomes unbearable. That being said I don't believe rent control is the proper solution, but it's the only one most people agree on right now. I'd like to hear about more solutions if there are any.
seunosewa 7y ago
Why must people currently living in a city be able to do so in the future? I think it makes sense to allow people whose skills are more valuable to a city to take the place of those whose skills are ... more valuable elsewhere. Cities evolve. Do I deserve to continue living in a city in perpetuity just because I happened to get to the city before others?
- max_hoffmann 7y ago
  Why should we exclude some people from living in attractive cities? Being less wealthy doesn’t mean a job is less valuable. Police officers, firefighters, bakers, artists, nurses… currently struggle living in attractive cities because they cannot afford it. This makes these cities less liveable for everyone.
  - seunosewa 7y ago
    I see no reason why a productive city with a high-earning, tax-paying population won't be able to pay police officers, firefighters, nurses, etc. as much as they need to be paid in order to do their important jobs well. I don't see why artists who do important work e.g. for Apple won't be paid well too.
  - Pyxl101 7y ago
    This seems like a problem that is naturally solved by market forces, supply and demand. If some job is sufficiently valued in a city, then businesses and government will pay whatever wage is necessary to hire people to perform that job. If people who are doing some job cannot afford to live in a city, then they will move away or find a different job. This will cause a shortage of people performing the job. If there is a shortage of people doing the job, and the results of that job are sufficiently valued, then employers will be forced to raise wages until they can attract the number of employees required. For example, if a city has a shortage of police offers, then they can solve that shortage by paying police officers a higher wage. If the city cannot recruit police without a higher wage, then the city will need to allocate more funds to police compensation so that they can pay a higher wage. If the city doesn't have the funds, then they may need to take the issue to the voters, who can approve some form of appropriation like a new tax to pay for it. Alternatively, perhaps the voters will not approve a tax, and the city will not pay a higher wage for police, and there will be a police shortage. That's the voters' decision. The city will experience the consequence of the police shortage, whatever that may be. Later, the voters may change their mind and decide to approve the tax. My point is that the fact of there being a labor shortage will cause a correction naturally via market forces.
bko 7y ago
Freezing rents to fight increasing costs makes as much sense as limiting the maximum reading on thermometers to fight increasing temperatures. Prices aren't just arbitrary numbers attributed to goods. They convey information. Information that cannot be captured by any one group alone. That's the point of prices. Freezing rents will create a lot of unintended consequences, as price controls normally do. I imagine that apartments would be poorly maintained as landlords won't need to attract new tenants. Many people will illegally sublet their homes and capture market rents. Landlords will be suspicious and begin treating their tenants with contempt. Investment in building real estate will reduce considerably. The city would be less vibrant and it will be harder to attract young talent or new businesses.
- drugme 7y ago
  Freezing rents to fight increasing costs makes as much sense as limiting the maximum reading on thermometers to fight increasing temperatures. You realize that, logically speaking -- there's no analogy to be made here. Right?

zanny 7y ago

Pretty much every western nation has systemically failed to recognize or support the insanely high demand for high density living in the 21st century. That is where the future of economics is, where the future of humanity in general pretty much is, and every democracy is consistently demonstrating the total inability for legislatures to sacrifice the advantage of those lucky enough to inhabit cities as they exist now for the benefit of all those who would grow the economy and future in the cities tomorrow. Largely because those in the cities have the money and influence to buy the politicians.

jimmaswell 7y ago
I don't buy any of this. Growing up everyone around me saw the city as somewhere you begrudgingly went out of necessity and only lived there if you had no choice, and I'm inclined to agree. In virtually every aspect I find more countryside-ish living much more pleasant. Consider virtual reality and remote work. I imagine much of the workforce will move to virtual offices in the near to medium-far future when corporations finally come around to realizing they don't have to waste so much money on rent. There's no need for programmers, graphic designers, reporters, and employees of lots of other professions to work in a physical office. So really, as cities become less of a necessity to certain jobs, I expect a moderate exodus to nicer areas, halting growth or even decreasing population in urban centers.
- TremendousJudge 7y ago
  >Growing up everyone around me saw the city as somewhere you begrudgingly went out of necessity and only lived there if you had no choice I assume you grew up in the United States?
  - jotm 7y ago
    Cause European cities are so much better? They're not. Overcrowded, overpriced, just for jobs and getting out asap.
  - jimmaswell 7y ago
    Yes, upstate NY.
    - eli_gottlieb 7y ago
      Where? I ran screaming from the Albany area first thing I could when I turned 18.
      - jimmaswell 7y ago
        Hudson Valley, somewhere around Hyde Park. I went over some of the features of the area here: https://news.ycombinator.com/item?id=20218742 https://news.ycombinator.com/item?id=20218742 What's so bad about the Albany area? I haven't been there since I went as a kid for some medical facility.
- 0xffff2 7y ago
  >Consider virtual reality and remote work. I imagine much of the workforce will move to virtual offices in the near to medium-far future when corporations finally come around to realizing they don't have to waste so much money on rent. There's no need for programmers, graphic designers, reporters, and employees of lots of other professions to work in a physical office. So really, as cities become less of a necessity to certain jobs, I expect a moderate exodus to nicer areas, halting growth or even decreasing population in urban centers. People have been saying this for decades. Personally, I'd like nothing more than for it to be true so that I can ditch my expensive Silicon Valley apartment. But it's not. Lately I've even been seeing a lot of pushback from people who feel more productive in an office setting and don't want to work remotely.
ng12 7y ago
Agreed. I'm still shocked about how pervasive it is. New York, San Francisco, Denver, Austin, Vancouver, Montreal, London, Paris, Berlin, Warsaw. It seems like a complete binary: cities are either dying or in the midst of a "housing crisis".
- deleted 7y ago
  [deleted]
Zacharias030 7y ago
>Pretty much every western nation has systemically failed to recognize or support the insanely high demand for high density living in the 21st century. While I agree that we have an unsolved problem here, isn't a city's government mainly responsible to do good by the people who inhabit that city and make up its electorate? That's how western democracies work, so no surprises there. I know of many people all over the world who would like to move to the US and still the 'insanely high demand' has not been supported.
tarsinge 7y ago
Because the root cause is not always high demand, it’s also speculation. Real Estate is now cool again (just look at investing forums or subreddits), and foreign investor money is flowing. Look for example at Portland (OR) how the rent increase correlates with the population increase. The current urban hype alone can not explain these numbers. Also another example since a few years a lot of high earning people in Paris are actively moving to cities with a better quality of life and climate (like Nantes, Bordeaux), in fact as high than 80% would do it if they could [1]. Yet bizarrely this has absolutely no impact on the market. [1] https://www.lepoint.fr/dossiers/economie/bac8-saut-secteur-prive/80-des-cadres-parisiens-veulent-fuir-paris-01-09-2016-2065217_3163.php https://www.lepoint.fr/dossiers/economie/bac8-saut-secteur-p...
- camgunz 7y ago
  I would give you 10 upvotes if I could. The main reason for rent (and housing prices in general) increases is speculation and investment. There is billions of dollars in rentals and mortgages, and it's in everyone's interest that real estate worth goes up... unless you're trying to rent an apartment or buy a house. Someone pretty smart once said you can't have both real estate as an infinitely increasing source of wealth _and_ affordable housing at the same time. You only get to pick one.
- candybar 7y ago
  This doesn't make any sense - real estate speculation would increase the purchase price of real estate but cannot directly impact rental rates. Speculation means people are bidding up prices for real estate beyond what's supportable by current demand, based on expected future demand. This generally doesn't make sense in the rental market - as a tenant, you're not entitled to benefit from any future increase in demand and it doesn't make sense to pay more that what the rental is worth to you now. This means rents, in aggregate, are a relatively accurate measure of the current supply and demand, free of speculative intents. Ironically, certain types of rent control laws could lead to the rental market being influenced by speculation. Rent control laws effectively turn tenants into partial owners - this means, depending on the law, it may make sense to rent at an above-market rate, if that allows you to keep renting the same unit at what would later be a below-market rate. Likewise, from the landlord's perspective, it may not make sense to rent even at a market rate, because to do so may lock you out of getting what would be a higher market rate in the future.
hnick 7y ago
It's so strange - the promise of the "information super-highway" in the 90s was that proximity wouldn't matter as much. But if anything it matters more, since every minute spent idle (e.g. travelling to meet someone) has a higher associated cost due to the opportunity cost of lost productivity. So we tend to clump and cluster.
- thirdsun 7y ago
  > But if anything it matters more, since every minute spent idle (e.g. travelling to meet someone) has a higher associated cost due to the opportunity cost of lost productivity. Which sounds like another vote for remote work instead of clumping and clustering. Why care about proximity and the time it takes to travel when everyone you'd want to meet, regardless of location, is a message, call or video conference away and reachable from your home, favorite coffee shop or local office? And no, I'm not saying that this has to replace all face to face interaction, but I think it should become the default for work environments that are compatible with this approach.
  - hnick 7y ago
    I totally agree. I'm just trying to get my head around why it seems that our promised decentralisation never came to be. Maybe old habits just die hard.
    - hwio 7y ago
      It is decentralized, just family rather than work.
  - majewsky 7y ago
    Speaking as a German, a big part of why this decentralization isn't happening is that Germany's internet infrastructure is a fucking joke. I'm sometimes even having trouble with getting consistent 3G coverage in large city centers. When driving around the countryside, it's frequently 2G or no service at all. And it's looking similarly bad for broadband internet access in homes. My parents don't have any broadband service whatsoever. They use a 4G hotspot to go online, and get an average connection speed of 170 KB/s. This is par for the course in rural Germany.
pergadad 7y ago
Yes and no. Yes your want to make an offer to those arriving, but you also don't want to destroy a city by letting prices go so high that only a certain caste of people is able to afford it - think SF. Not everyone can be rich enough to afford decent living inside a city. And yet you still want cheap burgers and services, as well as public schools and trash collection and police. None of those can afford big city living if you allow the tech & big business crowd to simply price them out of the market.

briandear 7y ago

They are necessarily connected. Supply and demand is connected. If rents are frozen, that lowers housing liquidity (because people won’t move if their rent stays “affordable,”) which reduces supply and necessarily creates a shortage. It lowers mobility as well since there is a shortage of available housing which leads to inefficiency— if someone moves to another job in another part of the city, that person would be less likely to be able to move. Then, there’s added stress on transit since people must commute less optimally. On the issue of new housing, who would risk capital to build new housing when their returns would be subject to the whims of rent caps? What’s the incentive to improve existing housing when the revenue for doing so is limited? Basically, what’s the point of making non-legally required improvements if you can’t raise rent to cover those expenses. That’s going to result in a decline of housing quality over time. Unless the government is also going to reduce taxes and expenses and inflation for property owners to help offset the lack of revenue growth? Property owner expenses are going down are they? That lack of revenue growth also means less future capital to build more housing. Rent control benefits a specific group, but ends up costing the whole far more than it saves the few. It’s popular to “protect” the visible because they are visible and typically sympathetic figures. But there is a greater harm being effected that is less noticed because the face of that effect is the “greedy” property owner, but the invisible victim is the overall public.

fxleach 7y ago
I agree with some of your points but I think you're misguided on a couple. >because people won’t move if their rent stays “affordable,” This is the issue rent control is trying to solve. There will always be rich people that can afford to live in the city, and they basically raise the bar on what developers and landlords think people can afford. They stay comfy while the rest basically pour all their paycheck into rent, forgo savings, and feel stuck. What about the rest of the people that work in the city with median income (or lower) jobs? They get pushed out further and further from city centres. In turn, that creates enormous strain on public transit and traffic congestion becomes unbearable. That being said I don't believe rent control is the proper solution, but it's the only one most people agree on right now. I'd like to hear about more solutions if there are any.

seunosewa 7y ago

Why must people currently living in a city be able to do so in the future? I think it makes sense to allow people whose skills are more valuable to a city to take the place of those whose skills are ... more valuable elsewhere. Cities evolve. Do I deserve to continue living in a city in perpetuity just because I happened to get to the city before others?

max_hoffmann 7y ago
Why should we exclude some people from living in attractive cities? Being less wealthy doesn’t mean a job is less valuable. Police officers, firefighters, bakers, artists, nurses… currently struggle living in attractive cities because they cannot afford it. This makes these cities less liveable for everyone.
- seunosewa 7y ago
  I see no reason why a productive city with a high-earning, tax-paying population won't be able to pay police officers, firefighters, nurses, etc. as much as they need to be paid in order to do their important jobs well. I don't see why artists who do important work e.g. for Apple won't be paid well too.
- Pyxl101 7y ago
  This seems like a problem that is naturally solved by market forces, supply and demand. If some job is sufficiently valued in a city, then businesses and government will pay whatever wage is necessary to hire people to perform that job. If people who are doing some job cannot afford to live in a city, then they will move away or find a different job. This will cause a shortage of people performing the job. If there is a shortage of people doing the job, and the results of that job are sufficiently valued, then employers will be forced to raise wages until they can attract the number of employees required. For example, if a city has a shortage of police offers, then they can solve that shortage by paying police officers a higher wage. If the city cannot recruit police without a higher wage, then the city will need to allocate more funds to police compensation so that they can pay a higher wage. If the city doesn't have the funds, then they may need to take the issue to the voters, who can approve some form of appropriation like a new tax to pay for it. Alternatively, perhaps the voters will not approve a tax, and the city will not pay a higher wage for police, and there will be a police shortage. That's the voters' decision. The city will experience the consequence of the police shortage, whatever that may be. Later, the voters may change their mind and decide to approve the tax. My point is that the fact of there being a labor shortage will cause a correction naturally via market forces.

bko 7y ago

Freezing rents to fight increasing costs makes as much sense as limiting the maximum reading on thermometers to fight increasing temperatures. Prices aren't just arbitrary numbers attributed to goods. They convey information. Information that cannot be captured by any one group alone. That's the point of prices. Freezing rents will create a lot of unintended consequences, as price controls normally do. I imagine that apartments would be poorly maintained as landlords won't need to attract new tenants. Many people will illegally sublet their homes and capture market rents. Landlords will be suspicious and begin treating their tenants with contempt. Investment in building real estate will reduce considerably. The city would be less vibrant and it will be harder to attract young talent or new businesses.

drugme 7y ago
Freezing rents to fight increasing costs makes as much sense as limiting the maximum reading on thermometers to fight increasing temperatures. You realize that, logically speaking -- there's no analogy to be made here. Right?