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An issue that many commenters here are missing is that the problem with rent control will manifest more sharply in the future. Sure, the impact today seems rel

An issue that many commenters here are missing is that the problem with rent control will manifest more sharply in the future. Sure, the impact today seems relatively equitable: a windfall for people that rent today coupled with a small drop in supply. But fast forward 10 or 20 years and the situation looks far worse: everyone who got a windfall today is still living in the same apartment, whereas anyone trying to enter the rental market is utterly SOL. The people that are really getting screwed are 10 years old today: when they try to move out of Mom and Dad's they will enter a market with vastly reduced supply since nobody has any incentive to move. This is why if you're 19 you can't afford to live in Manhattan: you're either old (and lucky) or rich.

throwaway85858 6y ago
not just in 10 or 20 years, more like in 9 months! The supreme court will probably rule that the Mietendeckel is unconstitutional in November, which will lead to a nasty situation for many renters with old contracts. If the tenants are lucky the landlord will just ask for the money "saved" to be paid back, but the unlucky ones will be evicted, as being in arrears of more than one month is grounds for termination regardless if you pay it back the the debt or not.
- germanier 6y ago
  It's extremely unlikely that the court will strike down the law in a way that this situation arises. It's not like everybody starts to pretend that a law has never existed if it's ruled unconstitutional. Usually arrangements will be made for those that relied on it. Especially in a case like this, where another basic right is affected. (It's two months btw)
  - throwaway85858 6y ago
    perhaps, but if MietenWoG is struck down that leaves only the BGB. yes you're right, two months not one.
    - germanier 6y ago
      As I said, "strike down" usually doesn't mean "transport everyone into a parallel universe where the law has never existed but all people still have acted the same and deal with the fallout no matter how unjust". Rulings are usually much more nuanced than that (and constitutionally required to be that).
      - blub 6y ago
        This is one more of those "software engineer tries to apply algorithmic thinking to law and gets ridiculous results" situations. If you continue to be patient and repeat that humanity doesn't function according to algorithms, they'll eventually get the message or get bored and leave to work on the next disruption.
- distances 6y ago
  The tenants are not in arrears. In the common case rents were lowered officially by landlords, with a footnote that the difference is due in full if the law is striked down.
  - throwaway85858 6y ago
    Nope! The rental amount agreed in the contract is to be owed by the tenant, this is not changed by the MietenWoG. https://ikb-law.blog/2020/11/19/resume-zum-mietendeckel/ https://ikb-law.blog/2020/11/19/resume-zum-mietendeckel/
    - distances 6y ago
      And as stated in the third paragraph of your link, it's not grounds for termination if the landlord has agreed that part of the rent is suspended until the matter has gone through courts.
- Tenoke 6y ago
  I have to say - I'm very jealous of my few friends who somehow managed to get a new place in the last few months. Their new contracts are already at the lowered prices so they don't have to fear the backrent like I do (and my reduction is quite big as I was paying way above the average for the area due to having a hard time finding anything in the first place).
deleted 6y ago
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vkou 6y ago
Kicking people out of their homes doesn't solve the supply problem, because it doesn't create new housing. It just shuffles around who lives in existing houses. If you have a housing problem, and you want to solve it, you need to do two things. 1. Not kick people out of housing that they have. (Because it is incredibly disruptive to people's lives.) 2. Build new housing, until demand is met. Rent control accomplishes #1, proper city planning accomplishes #2. If you're not doing #2, complaining about #1 isn't going to solve the problem. If you are doing #2, then #1 isn't a problem.
- kmeisthax 6y ago
  You can't do #2 without doing #1 - most in-demand land is already occupied and unused land is typically not worth developing (or doing so would cause environmental harm). In an all-owner-occupant suburb, this isn't so much of a problem: you're literally paying people lots of money to accept the disruption of having to move. However, in almost every other kind of housing arrangement, ownership over the building is separate from occupancy, and it's not the occupant's choice to make regarding increasing the housing supply. This is the left-NIMBY trap: any action to increase housing units necessarily displaces the most marginalized parts of society. If your pro-development policy doesn't include a plan to house people who are being displaced without increasing their expenses, then you're likely to make people start protesting the new buildings that need to be built in order to accommodate demand and actually cap rent growth. Other than that, yes. Make housing printer go brrr.
  - zamfi 6y ago
    This is one of the most reasoned explanations of the key problem where development meets rent control that I've ever read. If you turned it into a longer piece that explored the monetary and non-monetary incentives on all sides I would send it to everyone thinking about this issue. If I can help please let me know.
  - ghaff 6y ago
    This is the bulldoze the Mission and replace it with at least midrises plan. But it will be fine. For tech people.
anoncake 6y ago
Giving people "incentive to move" – aka forcing them out of their homes – doesn't increase supply. Unless they're "moving" onto the streets in which case you did free up a flat.
- jdxcode 6y ago
  "I'd like to move out of my rent-controlled apartment in SF because my job is in Mountain View, but I don't want to walk away from this rate."
  - anoncake 6y ago
    We're talking about Berlin.
    - pertymcpert 6y ago
      It's just a temporary short term fix. Like opioid pain killers, over time the downsides massively outweigh any benefits.
      - imtringued 6y ago
        Exactly, it's a pain killer. It's about making people shut up and stop talking about the problem.
      - anoncake 6y ago
        It's not that simple. Opioids are used all over the world, only in the USA did they cause a crisis. Countries with saner political systems shouldn't judge policies by how they worked in the USA.
    - floren 6y ago
      "I'd like to move out of my rent-controlled apartment in Spandau because my job is in Eberswalde, but I don't want to walk away from this rate."
      - 6y ago
908B64B197 6y ago
The beauty of it is it doesn't matter to the bureaucrats: since the 19 years old can't live in the city he also can't vote in the municipal elections! It also has bad impact on the type of buildings that get built. If you have to build some rent-controlled housing as part of your development project, and some jurisdictions will force developers to do that, it pushes you to build the rest of your building to be as upscale as possible to attract higher paying customers (better margins). And it also removes the incentives of ever upgrading the rent-controlled buildings more than the minimal legal maintenance. Because any dollar is better spent on the upscale offerings.
- thesuitonym 6y ago
  I don't know how it is in Germany, but in the US, rent controlled buildings can only have the rent increased if the landlord upgrades the building, so it actually incentivizes them to do upgrades, as that's the only way they can increase rent.
  - Kalium 6y ago
    In the US, rent control is regulated by states and enacted by cities. Each state and city is free to do so differently. As such, it can and does vary quite significantly place to place. This means it's impossible to offer an informed comment about rent control in the US.
    - lotsofpulp 6y ago
      I don’t think any US state has laws about rent prices. It’s all up to unit cities.
      - Kalium 6y ago
        Some states (California and Oregon come to mind) place limits about the terms of rent control that may be imposed by cities.
        6y ago
anothernewdude 6y ago
They'd be SOL anyway. Honestly there is no downside here, because this happens anyway.
- fock 6y ago
  totally agree: here's no rent control but a friend could see trickle-down economics at work from his office with half the condos (10years old building) across the yard being "under renovation" so that owners can just squeeze supply to artifically increase prices without being fined for this antisocial behavior...
asdff 6y ago
If people could move en masse out of cramped expensive rent controlled housing in manhattan, they would. Moving requires upfront capital that a lot of people don't have. Banning rent control doesn't move these working people into more space in some suburb on the outskirts of town, it moves them into a tent under an overpass.
- Robotbeat 6y ago
  Right. Rent control has created a situation where people are stuck in cramped apartments and no one has incentive to fix the problem. And there aren’t any easy outs. Just have to relentlessly attack the housing supply crunch until rent control isn’t needed.
  - asdff 6y ago
    All rent control says is that you can't raise rent more than x% a year. In my city that is 4%. For a landlord, being able to raise rent 4% a year is a great thing; that's a 15% increase every 3 years. Not all real estate markets even support that level of growth, my rent in collegetown USA was stagant for my four years, but for places where rents surge by double digits a year it puts some brakes in place, since wages don't follow suit with a double digit hike a year. In a world where wages aren't going up by that much, rent control is needed to protect workers from price gouging by scrupulous landlords taking advantage of a sellers market. I don't know why so many are against simple consumer side protections such as preventing price gouging on shelter; we make it (sensibly) illegal to price gouge on food and water and other essential goods, but shelter is somehow an investment.
blablabla123 6y ago
Either a cheap apartment is hard to find and afterwards it's even harder to move somewhere else. The alternative - as in other cities - is that it's still hard to find an apartment that has a normal price. Of course this also attracts scammers. The apartment situation in dense areas is bad, no matter if it's Berlin or not. At least the local government is working on a solution to not end up like Manhattan, both price- and concrete-wise. If they find a sustainable solution, then this would be a game-changer and other cities might adopt that.
e40 6y ago
I experienced exactly this in the early 1980's. In Berkeley, CA. Apartments were scarce because of rent control. I had a coworker that lived in his apartment from late 70's until late 90's. He paid less than $300/mo. It was great for him. He saved a ton of money and bought a house in Berkeley in the late 90's. But, as a student I had to live in Oakland and was never able to find an apartment. Every time I went to look at one there were another 99 people there. It was so frustrating.
- latchkey 6y ago
  Around 1994/5 I wanted to move to Berkeley. I had a very hard time finding a place. I looked at so many attics turned into bedrooms and other crappy places. Eventually, I found an ideal (relatively) place and there was a good 50+ people looking at the same apartment during a showing... I walked up to the landlord (who was a lawyer in his day job) and said... "I know you can't pick favorites, but I have a good salary and I'm not a student." ... he ended up making his top picks write an essay on why we wanted the apartment. I got the place and stayed there for 10 years. Interestingly, during the last few years I was there, rent control ended and the landlord really wanted me out because he knew that he could make 2-3x more. He turned into a slumlord and refused to make any improvements and the ones he made were all half assed. The storage locker in the carport under the building got broken into as well. Eventually, I left for SF and sublet the place to some friends illegally because they needed an inexpensive place. He eventually found out about that and I had to let the place go. I guess my point is that I've seen first hand rent control and no rent control go through both phases. I really don't think there is a good solution. Someone always gets the short end of the stick.
  - slavik81 6y ago
    If there was no rent control, why didn't he just raise the price up to market value when your lease came up for renewal? I live in a city without rent control, and your experience is entirely foreign to me. Heck, my current landlord has offered to pay for things that I don't think are even really his responsibility. He's just happy to have good tenants paying market rate. Switching tenants will probably cost a few thousand dollars in lost rent, and it won't earn him any more income, so he treats us well.
Krasnol 6y ago
The only difference to the situation right now that people are able to stay where they are. They wouldn't otherwise.
Xylakant 6y ago
A counterexample is Vienna, which utilizes a well balanced system of rent-control and social housing to have incredibly low rents and still a stable supply of flats. One tweak they apply is that rent-control does not apply to new developments, so creating new flats is more lucrative than turning old buildings into luxury developments. The city also acts as a competitor, driving prices down by offering cheap flats. There are definitively problems with rent-control if applied bluntly, but the it's a tool that can be useful. [1] https://www.immobilienwirtschaft.tu-berlin.de/fileadmin/fg287/ERES/Presentations/Funk-Rent-control-in-Austria.pdf https://www.immobilienwirtschaft.tu-berlin.de/fileadmin/fg28...
- DetroitThrow 6y ago
  Very interesting approach, it's almost as if developers get a "patent" on creating useful housing stock.
- dionidium 6y ago
  > One tweak they apply is that rent-control does not apply to new developments, so creating new flats is more lucrative than turning old buildings into luxury developments. Typical YIMBY broken record here, but in the U.S. it's more or less illegal to build new housing on almost every inch of land (especially in the most expensive cities). We don't need to develop baroque incentives for developers to create housing; we need to stop making it illegal.
  - lotsofpulp 6y ago
    It is most certainly not illegal to build new housing in the US. https://www.census.gov/construction/nrc/pdf/newresconst.pdf https://www.census.gov/construction/nrc/pdf/newresconst.pdf
    - dionidium 6y ago
      It's illegal to build at all on some plots of land. It's illegal to build apartments on most plots of land in most cities (this is called "single-family zoning" and it dominates most U.S. cities). It's illegal to build large apartment buildings on still more plots of land. And then, yes, of course, there are some plots of land where it's legal to build one or more of the categories listed above. The places where housing is scarce are in the former groups, by and large, not the latter, which is to say the problem where housing is scarce is indeed that it's illegal to build enough housing there. Those places don't need to incentivize development. They need to make it legal.
JPKab 6y ago
There is plenty of scientific denialism on the right. Along with anti nuclear, the belief that rent control is a remotely good idea is an example of scientific denialism on the left. There are some decent arguments to be made against nuclear but rent control has always always caused more harm than good everywhere it's been tried.
- dragonwriter 6y ago
  > Along with anti nuclear, the belief that rent control is a remotely good idea is an example of scientific denialism on the left. No, because “good idea” isn't an objective claim within the domain of science , it's a subjective value claim outside of the domain of science. Now, it's possible that in some cases this belief could be supported by belief in an objective claim that is itself an example of science denialism, but it could just be that people who believe that rent control is an good idea have different values than you do.
  - handoflixue 6y ago
    One can generally look at the stated values of the people advocating for a policy, and then run objective studies on whether that policy produces outcomes in line with those stated values. A lot of people, confronted with proof that their favorite policy does not do what they want, will simply deny the science and continue to believe that this policy is concordant with their values. Some policies are also bad enough that one can safely say that no reasonable mainstream set of values could endorse it without denying the actual facts of the matter - for instance, re-introducing lead and asbestos is just plain Not A Good Idea for any set of values worth discussing, despite the fact that there are most assuredly a few sociopaths out there who'd be happy to make a buck gutting those regulations. I've no personal experience with "rent control" but I get the impression that the people saying it's a bad idea genuinely mean one of these two cases, not simply a difference of values. Whether the science actually agrees with them, however, is quite beyond my expertise :)
    - dllthomas 6y ago
      The values that people hold don't necessarily match those that people profess. I don't think that's what's at play here, but it can be good to keep in mind.
cbmuser 6y ago
That's correct and can be observed in Stockholm, for example: > https://www.bbc.com/worklife/article/20160517-this-is-one-city-where-youll-never-find-a-home https://www.bbc.com/worklife/article/20160517-this-is-one-ci...
- rags2riches 6y ago
  It's very nice for homeowners that have built a small fortune over decades, thanks to rising house prices, to have a way to exit the market and move into a rent controlled apartment in the best part of town. It's not as nice for young people or other newcomers without capital and a couple of decades in the apartment queue. They still have to pay market prices to rent, but have to make do with second or third hand renting where they have no protection and can be forced to move on a very short notice. Meanwhile, the difference in rents is pocketed by someone that is probably using it to pay down a mortgage on their actual home.
tehjoker 6y ago
I think you're missing a larger point: why should people be forced to move? There's no natural law that says people should be ceaselessly pushed around by market forces.
- Negitivefrags 6y ago
  If you define natural laws as the things that happen when you remove actual laws, then I would say people being forced to move would be exactly what happens.
  - cool_dude85 6y ago
    Yes, if you define natural laws this way, people being forced to move by roving bands of gun toting warlords would be exactly what happens. Or maybe "forced to move" isn't quite strong enough to describe it. Seems like this way of defining natural laws is a bit silly.
- gameman144 6y ago
  One could just as easily say that you're missing the opposite point: why should policy prevent new people from moving in? In either scenario, policy will disadvantage one group and advantage another. Any policies that aim to give stability to long-term tenants is liable to disadvantage new and shorter-term tenants. There's no natural law dictating that people should be forced to move out, but there's also no natural law dictating that newcomers should be forced away.
  - tehjoker 6y ago
    I agree, but I don't think the literal lord of a property should be able to force people to migrate by demanding higher tribute. There should be a rational humane process that isn't driven by simple greed.
    - mjevans 6y ago
      As a suggestion for a process... Pick a duration upon which to re-evaluate the value of property. Distribute this roughly evenly over all the property everywhere so that it isn't all at once. When a property's up for evaluation, offer it for 'sale' via a distributed dutch auction as part of a block with similar properties in the same jurisdiction (roughly, zipcodes, or maybe divided up should work). The block is bid on as a whole, with up to 25% (rounded up) of any of it excluded from the bids (high or low) and with any 'inspection noted defects' (post sale) deducted from the transfer price of the property. Price for a given unit would be proportional to the previously evaluated (by market sale or bid) price of the property among the whole group. Any units not receiving sufficient bidding coverage to provide a fair price should be re-tried with the aim towards the median value of the next group of properties in that area. The resulting offer is then forwarded to the residents as proof of their new property value and the basis for all taxes upon it. The resident has an option to accept that value anytime within 8 months, for a specified date of no more than 6 months from when they've accepted the offer.
mancerayder 6y ago
>This is why if you're 19 you can't afford to live in Manhattan: you're either old (and lucky) or rich. Or a real estate broker who knows building owners willing to rent out the stabilized units (50 pct are stabilized, 50 free market more or less). Or you paid a broker fee to this broker. Or you sublet from a rent stabilized tenant who charges market rent.. No one talks about how easy corruption happens in these situations. The bifurcated market in NYC sucks - it should be all stabilized or all free market.
- Kalium 6y ago
  SF famously has a black market in rent controlled sublets. In theory the amount a master tenant can charge for a room is a question of proportionate space and overall rent. In practice, they charge a lot more, and it's exceptionally rarely challenged.
statstutor 6y ago
> everyone... is still living in the same apartment I don't think this is a function of rent control. The people who were renting 10-20 years ago will still need somewhere to live. If there isn't sufficient new housing available, then this increases competition for existing housing, but kicking people out of their homes doesn't seem like a good solution either.
cm2187 6y ago
Also 10-20y down the line, the incentives to invest into and maintain a rent controlled unit being very small, they will be in a really poor state.
- lm28469 6y ago
  This is already the case... Renovated ones are squeezing us to the last euro but even insalubrious flats are asking for crazy rents.
skohan 6y ago
The thing is, what's the alternative? I live in Berlin, and my neighbours are in their 70's. Should they be forced to find a new flat way outside the city because the rent triples over the course of a few years so young tech workers relocating from London can have a place in the cool part of town? The rental market is different in Germany than it is in other countries: less people own their homes, and getting a housing contract feels a lot more like a permanent thing than when I was living in the US. You pay 3 months rent up front as the security deposit, and most flats don't come with a fitted kitchen so you have to take care of it yourself.
- throwaway6734 6y ago
  build more housing
  - skohan 6y ago
    why is this mutually exclusive?
    - whatshisface 6y ago
      Rent control could technically be done by handing money to tennants to then hand to landlords, but in practice it's done by taking money away from landlords. Obviously, that's going to keep landlords from being able to give that money to construction companies. Another possible solution would be to take money away from tenants and landlords both to give directly to construction companies. That's socialized housing. However in the long run it's not likely to be much cheaper, because it's not like landlords are making that much profit in the first place. The profit in renting is about the cost of capital, the government is not going to do much better.
      - asdff 6y ago
        Is that how rent control is done in Europe? In the U.S. at least, rent control isn't taking money away from anyone. All rent control stipulates is that for the duration of your lease you cannot raise rent a certain percentage, such as 4% a year. Not having rent control allows rents to exceed earned wages for working people and pushes them to the street sooner than it pushes them out of the city.
tamrix 6y ago
Exactly, this is to increase rent prices by shorting supply, not to protect the people.
ClumsyPilot 6y ago
I feel the discussion about rent misses the forest for the trees: most houses are sold, not let out by developers. Price of house is affected by the interest rate much more than it is affected by the rent: i.e. if interest rates fall by half, and rents fall by half, house prices go up. If you could buy a house with zero percent interest rate, then any rent, no matter how tiny, is building you equity. Then you have to conisder thay mant houses are bough as 'investment' and many owners literally dont bother renting them out, they just wait for price of the house to go up. This is a serious problem in london
Spooky23 6y ago
Manhattan has been unchanged for 100 years. You’re either rich or poor to live there. It’s kinda bizarre that you see the ability of people to live in their home for 20 years as a problem. Frankly it goes to show the hypocrisy of many of the cheerleaders for higher density housing, pushing for a future where as an individual you get discarded and banished to the hinterlands when your value declines.
jpambrun 6y ago
Rent are controlled in Quebec since as far as I can remember. Rent are affordable in Montreal and supply is not a problem.
- lotsofpulp 6y ago
  It’s because there’s isn’t that many people that want to live on Montreal. The root issue in Berlin and SF and NYC is the demand far outstrips the supply. The only solution is to create more Berlins, but that’s not going to happen for myriad reasons.
asdff 6y ago
Where would that person in that rent controlled apartment be otherwise? Chances are, on the street. Moving requires upfront capital. It requires promise of a job at the other end. If you are in a high cost of living area like NYC or CA, you might have to quit your job if you want to find a more affordable apartment; there might be absolutely nothing affordable within a three hour drive of your job of cleaning up a downtown office or working a bar, and there may be absolutely no jobs in areas that are affordable. Throw in multiple earners, as is the case of many working poor in overcrowded rent controlled apartments, and you've complicated the problem further and make it even more difficult to wind down your life in one location and wind up in another. And let's be reasonable here, rent control is not some handout. It's not a subsidy or a tax. The price you pay on your first year in a rent controlled apartment is market rate. Rent control simply says rents cannot go up say, beyond 4% a year. Perfectly reasonable in a world where wages for the working poor rarely go up beyond 4% a year. If landlords want to make more rental income per year, they should instead lobby their city council members to allow them to build more units per parcel, rather than lobby to artificially constrain housing supply with zoning and/or red tape in effort to raise real estate values.
- rayiner 6y ago
  > Where would that person in that rent controlled apartment be otherwise? Or, you know, New Jersey. Or some suburb. The same place younger people have to go because rent control destroyed the housing market in the city.
  - asdff 6y ago
    And that will work fine for 1 person or 10 people but not 100 people or the 1000 in that rent controlled building in NYC, because you don't have a Manhattan's worth of jobs for working people in some suburb in New Jersey. Sure, some people can afford the car, the insurance, the gas, the parking, the hours a day commuting, but for those that can't, they end up on the street. In some areas, like in CA, you really don't save very much at all going out to the suburbs. A house like this one (1) would be literally 1/10th the price if not less somewhere else, but such is the housing market for some metropolitan areas in the US these days. 1. https://www.zillow.com/homedetails/20722-Pioneer-Blvd-Lakewood-CA-90715/21129045_zpid/ https://www.zillow.com/homedetails/20722-Pioneer-Blvd-Lakewo...
junon 6y ago
I live in Berlin. What you're describing in "10 or 20 years" is already the case. That's why these actions are being taken now. I waited 6 months for an apartment here when I first moved. Pretty much everyone who doesn't want to spend insane prices on a unit has to. And even then, I'm still paying 500-600 more than I should be. It's insanity. The main problem is that there are immigrants (primarily from one country in particular, but that's less important) coming in and buying up all of the "houses" here (note that "House" in Berlin means a large apartment-complex-like house, not a single American Style, white picket fence house) and then increasing the prices slightly. I'm not anti-immigration, clearly, but there are still concrete economic effects that haven't been solved yet. I don't think anyone knows what these measures will lead to, but at least it's something.
- mtrovo 6y ago
  You don't need the slightly racist comment, biggest problem imho is that house ownership is very low in berlin (last time I read about it was around only 15% of people live on their owned houses) and really hard to change that. You have to think that everytime you're looking at buying a place you're competing with Blackrock, Deutsche Wohne and other not so nice funds with much more room for negotiation than you. That's why even if you and your partner makes top 10% salary you're probably not rich enough to own a house. And on top of that germany has very strict laws about transparency of home ownership so there's no clear way to know the distribution of home ownership or who are the biggest landlords and where they got their money from. Which is bad because there's a lot of shady people buying whole complexes, but it's also working as intended as a lot of politicians are also big landlords.
  - junon 6y ago
    A country isn't a race, and I omitted the specific country for the very purpose of not painting a picture based on their skin color, because it has literally nothing to do with it. It's also not a reflection of their character or their culture, either. Please don't mis-assert that it's "racism". Also, have you been to Berlin? Of course people don't own houses here. Unless you're outside the ring, there are very few houses to be bought. If you're talking about owning apartments within the large houses here, it makes sense that a lot of people don't want to own them - because not a lot of young people want to be tied down to a 40sqm unit in one part of the city for the rest of their lives, or deal with all of the hassle of subletting and the tenancy laws here unless they were serious about holding and nurturing those securities.
zpeti 6y ago
But politicians need votes within 4-5 years. So who really cares. At least the young people getting apartments now are getting a good deal. Who cares about the future??
deleted 6y ago
[deleted]

throwaway85858 6y ago

not just in 10 or 20 years, more like in 9 months! The supreme court will probably rule that the Mietendeckel is unconstitutional in November, which will lead to a nasty situation for many renters with old contracts. If the tenants are lucky the landlord will just ask for the money "saved" to be paid back, but the unlucky ones will be evicted, as being in arrears of more than one month is grounds for termination regardless if you pay it back the the debt or not.

germanier 6y ago
It's extremely unlikely that the court will strike down the law in a way that this situation arises. It's not like everybody starts to pretend that a law has never existed if it's ruled unconstitutional. Usually arrangements will be made for those that relied on it. Especially in a case like this, where another basic right is affected. (It's two months btw)
- throwaway85858 6y ago
  perhaps, but if MietenWoG is struck down that leaves only the BGB. yes you're right, two months not one.
  - germanier 6y ago
    As I said, "strike down" usually doesn't mean "transport everyone into a parallel universe where the law has never existed but all people still have acted the same and deal with the fallout no matter how unjust". Rulings are usually much more nuanced than that (and constitutionally required to be that).
    - blub 6y ago
      This is one more of those "software engineer tries to apply algorithmic thinking to law and gets ridiculous results" situations. If you continue to be patient and repeat that humanity doesn't function according to algorithms, they'll eventually get the message or get bored and leave to work on the next disruption.
distances 6y ago
The tenants are not in arrears. In the common case rents were lowered officially by landlords, with a footnote that the difference is due in full if the law is striked down.
- throwaway85858 6y ago
  Nope! The rental amount agreed in the contract is to be owed by the tenant, this is not changed by the MietenWoG. https://ikb-law.blog/2020/11/19/resume-zum-mietendeckel/ https://ikb-law.blog/2020/11/19/resume-zum-mietendeckel/
  - distances 6y ago
    And as stated in the third paragraph of your link, it's not grounds for termination if the landlord has agreed that part of the rent is suspended until the matter has gone through courts.
Tenoke 6y ago
I have to say - I'm very jealous of my few friends who somehow managed to get a new place in the last few months. Their new contracts are already at the lowered prices so they don't have to fear the backrent like I do (and my reduction is quite big as I was paying way above the average for the area due to having a hard time finding anything in the first place).

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vkou 6y ago

Kicking people out of their homes doesn't solve the supply problem, because it doesn't create new housing. It just shuffles around who lives in existing houses. If you have a housing problem, and you want to solve it, you need to do two things. 1. Not kick people out of housing that they have. (Because it is incredibly disruptive to people's lives.) 2. Build new housing, until demand is met. Rent control accomplishes #1, proper city planning accomplishes #2. If you're not doing #2, complaining about #1 isn't going to solve the problem. If you are doing #2, then #1 isn't a problem.

kmeisthax 6y ago
You can't do #2 without doing #1 - most in-demand land is already occupied and unused land is typically not worth developing (or doing so would cause environmental harm). In an all-owner-occupant suburb, this isn't so much of a problem: you're literally paying people lots of money to accept the disruption of having to move. However, in almost every other kind of housing arrangement, ownership over the building is separate from occupancy, and it's not the occupant's choice to make regarding increasing the housing supply. This is the left-NIMBY trap: any action to increase housing units necessarily displaces the most marginalized parts of society. If your pro-development policy doesn't include a plan to house people who are being displaced without increasing their expenses, then you're likely to make people start protesting the new buildings that need to be built in order to accommodate demand and actually cap rent growth. Other than that, yes. Make housing printer go brrr.
- zamfi 6y ago
  This is one of the most reasoned explanations of the key problem where development meets rent control that I've ever read. If you turned it into a longer piece that explored the monetary and non-monetary incentives on all sides I would send it to everyone thinking about this issue. If I can help please let me know.
- ghaff 6y ago
  This is the bulldoze the Mission and replace it with at least midrises plan. But it will be fine. For tech people.

anoncake 6y ago

Giving people "incentive to move" – aka forcing them out of their homes – doesn't increase supply. Unless they're "moving" onto the streets in which case you did free up a flat.

jdxcode 6y ago
"I'd like to move out of my rent-controlled apartment in SF because my job is in Mountain View, but I don't want to walk away from this rate."
- anoncake 6y ago
  We're talking about Berlin.
  - pertymcpert 6y ago
    It's just a temporary short term fix. Like opioid pain killers, over time the downsides massively outweigh any benefits.
    - imtringued 6y ago
      Exactly, it's a pain killer. It's about making people shut up and stop talking about the problem.
    - anoncake 6y ago
      It's not that simple. Opioids are used all over the world, only in the USA did they cause a crisis. Countries with saner political systems shouldn't judge policies by how they worked in the USA.
  - floren 6y ago
    "I'd like to move out of my rent-controlled apartment in Spandau because my job is in Eberswalde, but I don't want to walk away from this rate."
    - 6y ago

908B64B197 6y ago

The beauty of it is it doesn't matter to the bureaucrats: since the 19 years old can't live in the city he also can't vote in the municipal elections! It also has bad impact on the type of buildings that get built. If you have to build some rent-controlled housing as part of your development project, and some jurisdictions will force developers to do that, it pushes you to build the rest of your building to be as upscale as possible to attract higher paying customers (better margins). And it also removes the incentives of ever upgrading the rent-controlled buildings more than the minimal legal maintenance. Because any dollar is better spent on the upscale offerings.

thesuitonym 6y ago
I don't know how it is in Germany, but in the US, rent controlled buildings can only have the rent increased if the landlord upgrades the building, so it actually incentivizes them to do upgrades, as that's the only way they can increase rent.
- Kalium 6y ago
  In the US, rent control is regulated by states and enacted by cities. Each state and city is free to do so differently. As such, it can and does vary quite significantly place to place. This means it's impossible to offer an informed comment about rent control in the US.
  - lotsofpulp 6y ago
    I don’t think any US state has laws about rent prices. It’s all up to unit cities.
    - Kalium 6y ago
      Some states (California and Oregon come to mind) place limits about the terms of rent control that may be imposed by cities.
      - 6y ago

anothernewdude 6y ago

They'd be SOL anyway. Honestly there is no downside here, because this happens anyway.

fock 6y ago
totally agree: here's no rent control but a friend could see trickle-down economics at work from his office with half the condos (10years old building) across the yard being "under renovation" so that owners can just squeeze supply to artifically increase prices without being fined for this antisocial behavior...

asdff 6y ago

If people could move en masse out of cramped expensive rent controlled housing in manhattan, they would. Moving requires upfront capital that a lot of people don't have. Banning rent control doesn't move these working people into more space in some suburb on the outskirts of town, it moves them into a tent under an overpass.

Robotbeat 6y ago
Right. Rent control has created a situation where people are stuck in cramped apartments and no one has incentive to fix the problem. And there aren’t any easy outs. Just have to relentlessly attack the housing supply crunch until rent control isn’t needed.
- asdff 6y ago
  All rent control says is that you can't raise rent more than x% a year. In my city that is 4%. For a landlord, being able to raise rent 4% a year is a great thing; that's a 15% increase every 3 years. Not all real estate markets even support that level of growth, my rent in collegetown USA was stagant for my four years, but for places where rents surge by double digits a year it puts some brakes in place, since wages don't follow suit with a double digit hike a year. In a world where wages aren't going up by that much, rent control is needed to protect workers from price gouging by scrupulous landlords taking advantage of a sellers market. I don't know why so many are against simple consumer side protections such as preventing price gouging on shelter; we make it (sensibly) illegal to price gouge on food and water and other essential goods, but shelter is somehow an investment.

blablabla123 6y ago

Either a cheap apartment is hard to find and afterwards it's even harder to move somewhere else. The alternative - as in other cities - is that it's still hard to find an apartment that has a normal price. Of course this also attracts scammers. The apartment situation in dense areas is bad, no matter if it's Berlin or not. At least the local government is working on a solution to not end up like Manhattan, both price- and concrete-wise. If they find a sustainable solution, then this would be a game-changer and other cities might adopt that.

e40 6y ago

I experienced exactly this in the early 1980's. In Berkeley, CA. Apartments were scarce because of rent control. I had a coworker that lived in his apartment from late 70's until late 90's. He paid less than $300/mo. It was great for him. He saved a ton of money and bought a house in Berkeley in the late 90's. But, as a student I had to live in Oakland and was never able to find an apartment. Every time I went to look at one there were another 99 people there. It was so frustrating.

latchkey 6y ago
Around 1994/5 I wanted to move to Berkeley. I had a very hard time finding a place. I looked at so many attics turned into bedrooms and other crappy places. Eventually, I found an ideal (relatively) place and there was a good 50+ people looking at the same apartment during a showing... I walked up to the landlord (who was a lawyer in his day job) and said... "I know you can't pick favorites, but I have a good salary and I'm not a student." ... he ended up making his top picks write an essay on why we wanted the apartment. I got the place and stayed there for 10 years. Interestingly, during the last few years I was there, rent control ended and the landlord really wanted me out because he knew that he could make 2-3x more. He turned into a slumlord and refused to make any improvements and the ones he made were all half assed. The storage locker in the carport under the building got broken into as well. Eventually, I left for SF and sublet the place to some friends illegally because they needed an inexpensive place. He eventually found out about that and I had to let the place go. I guess my point is that I've seen first hand rent control and no rent control go through both phases. I really don't think there is a good solution. Someone always gets the short end of the stick.
- slavik81 6y ago
  If there was no rent control, why didn't he just raise the price up to market value when your lease came up for renewal? I live in a city without rent control, and your experience is entirely foreign to me. Heck, my current landlord has offered to pay for things that I don't think are even really his responsibility. He's just happy to have good tenants paying market rate. Switching tenants will probably cost a few thousand dollars in lost rent, and it won't earn him any more income, so he treats us well.

Krasnol 6y ago

The only difference to the situation right now that people are able to stay where they are. They wouldn't otherwise.

Xylakant 6y ago

A counterexample is Vienna, which utilizes a well balanced system of rent-control and social housing to have incredibly low rents and still a stable supply of flats. One tweak they apply is that rent-control does not apply to new developments, so creating new flats is more lucrative than turning old buildings into luxury developments. The city also acts as a competitor, driving prices down by offering cheap flats. There are definitively problems with rent-control if applied bluntly, but the it's a tool that can be useful. [1] https://www.immobilienwirtschaft.tu-berlin.de/fileadmin/fg287/ERES/Presentations/Funk-Rent-control-in-Austria.pdf https://www.immobilienwirtschaft.tu-berlin.de/fileadmin/fg28...

DetroitThrow 6y ago
Very interesting approach, it's almost as if developers get a "patent" on creating useful housing stock.
dionidium 6y ago
> One tweak they apply is that rent-control does not apply to new developments, so creating new flats is more lucrative than turning old buildings into luxury developments. Typical YIMBY broken record here, but in the U.S. it's more or less illegal to build new housing on almost every inch of land (especially in the most expensive cities). We don't need to develop baroque incentives for developers to create housing; we need to stop making it illegal.
- lotsofpulp 6y ago
  It is most certainly not illegal to build new housing in the US. https://www.census.gov/construction/nrc/pdf/newresconst.pdf https://www.census.gov/construction/nrc/pdf/newresconst.pdf
  - dionidium 6y ago
    It's illegal to build at all on some plots of land. It's illegal to build apartments on most plots of land in most cities (this is called "single-family zoning" and it dominates most U.S. cities). It's illegal to build large apartment buildings on still more plots of land. And then, yes, of course, there are some plots of land where it's legal to build one or more of the categories listed above. The places where housing is scarce are in the former groups, by and large, not the latter, which is to say the problem where housing is scarce is indeed that it's illegal to build enough housing there. Those places don't need to incentivize development. They need to make it legal.

JPKab 6y ago

There is plenty of scientific denialism on the right. Along with anti nuclear, the belief that rent control is a remotely good idea is an example of scientific denialism on the left. There are some decent arguments to be made against nuclear but rent control has always always caused more harm than good everywhere it's been tried.

dragonwriter 6y ago
> Along with anti nuclear, the belief that rent control is a remotely good idea is an example of scientific denialism on the left. No, because “good idea” isn't an objective claim within the domain of science , it's a subjective value claim outside of the domain of science. Now, it's possible that in some cases this belief could be supported by belief in an objective claim that is itself an example of science denialism, but it could just be that people who believe that rent control is an good idea have different values than you do.
- handoflixue 6y ago
  One can generally look at the stated values of the people advocating for a policy, and then run objective studies on whether that policy produces outcomes in line with those stated values. A lot of people, confronted with proof that their favorite policy does not do what they want, will simply deny the science and continue to believe that this policy is concordant with their values. Some policies are also bad enough that one can safely say that no reasonable mainstream set of values could endorse it without denying the actual facts of the matter - for instance, re-introducing lead and asbestos is just plain Not A Good Idea for any set of values worth discussing, despite the fact that there are most assuredly a few sociopaths out there who'd be happy to make a buck gutting those regulations. I've no personal experience with "rent control" but I get the impression that the people saying it's a bad idea genuinely mean one of these two cases, not simply a difference of values. Whether the science actually agrees with them, however, is quite beyond my expertise :)
  - dllthomas 6y ago
    The values that people hold don't necessarily match those that people profess. I don't think that's what's at play here, but it can be good to keep in mind.

cbmuser 6y ago

That's correct and can be observed in Stockholm, for example: > https://www.bbc.com/worklife/article/20160517-this-is-one-city-where-youll-never-find-a-home https://www.bbc.com/worklife/article/20160517-this-is-one-ci...

rags2riches 6y ago
It's very nice for homeowners that have built a small fortune over decades, thanks to rising house prices, to have a way to exit the market and move into a rent controlled apartment in the best part of town. It's not as nice for young people or other newcomers without capital and a couple of decades in the apartment queue. They still have to pay market prices to rent, but have to make do with second or third hand renting where they have no protection and can be forced to move on a very short notice. Meanwhile, the difference in rents is pocketed by someone that is probably using it to pay down a mortgage on their actual home.

tehjoker 6y ago

I think you're missing a larger point: why should people be forced to move? There's no natural law that says people should be ceaselessly pushed around by market forces.

Negitivefrags 6y ago
If you define natural laws as the things that happen when you remove actual laws, then I would say people being forced to move would be exactly what happens.
- cool_dude85 6y ago
  Yes, if you define natural laws this way, people being forced to move by roving bands of gun toting warlords would be exactly what happens. Or maybe "forced to move" isn't quite strong enough to describe it. Seems like this way of defining natural laws is a bit silly.
gameman144 6y ago
One could just as easily say that you're missing the opposite point: why should policy prevent new people from moving in? In either scenario, policy will disadvantage one group and advantage another. Any policies that aim to give stability to long-term tenants is liable to disadvantage new and shorter-term tenants. There's no natural law dictating that people should be forced to move out, but there's also no natural law dictating that newcomers should be forced away.
- tehjoker 6y ago
  I agree, but I don't think the literal lord of a property should be able to force people to migrate by demanding higher tribute. There should be a rational humane process that isn't driven by simple greed.
  - mjevans 6y ago
    As a suggestion for a process... Pick a duration upon which to re-evaluate the value of property. Distribute this roughly evenly over all the property everywhere so that it isn't all at once. When a property's up for evaluation, offer it for 'sale' via a distributed dutch auction as part of a block with similar properties in the same jurisdiction (roughly, zipcodes, or maybe divided up should work). The block is bid on as a whole, with up to 25% (rounded up) of any of it excluded from the bids (high or low) and with any 'inspection noted defects' (post sale) deducted from the transfer price of the property. Price for a given unit would be proportional to the previously evaluated (by market sale or bid) price of the property among the whole group. Any units not receiving sufficient bidding coverage to provide a fair price should be re-tried with the aim towards the median value of the next group of properties in that area. The resulting offer is then forwarded to the residents as proof of their new property value and the basis for all taxes upon it. The resident has an option to accept that value anytime within 8 months, for a specified date of no more than 6 months from when they've accepted the offer.

mancerayder 6y ago

>This is why if you're 19 you can't afford to live in Manhattan: you're either old (and lucky) or rich. Or a real estate broker who knows building owners willing to rent out the stabilized units (50 pct are stabilized, 50 free market more or less). Or you paid a broker fee to this broker. Or you sublet from a rent stabilized tenant who charges market rent.. No one talks about how easy corruption happens in these situations. The bifurcated market in NYC sucks - it should be all stabilized or all free market.

Kalium 6y ago
SF famously has a black market in rent controlled sublets. In theory the amount a master tenant can charge for a room is a question of proportionate space and overall rent. In practice, they charge a lot more, and it's exceptionally rarely challenged.

statstutor 6y ago

> everyone... is still living in the same apartment I don't think this is a function of rent control. The people who were renting 10-20 years ago will still need somewhere to live. If there isn't sufficient new housing available, then this increases competition for existing housing, but kicking people out of their homes doesn't seem like a good solution either.

cm2187 6y ago

Also 10-20y down the line, the incentives to invest into and maintain a rent controlled unit being very small, they will be in a really poor state.

lm28469 6y ago
This is already the case... Renovated ones are squeezing us to the last euro but even insalubrious flats are asking for crazy rents.

skohan 6y ago

The thing is, what's the alternative? I live in Berlin, and my neighbours are in their 70's. Should they be forced to find a new flat way outside the city because the rent triples over the course of a few years so young tech workers relocating from London can have a place in the cool part of town? The rental market is different in Germany than it is in other countries: less people own their homes, and getting a housing contract feels a lot more like a permanent thing than when I was living in the US. You pay 3 months rent up front as the security deposit, and most flats don't come with a fitted kitchen so you have to take care of it yourself.

throwaway6734 6y ago
build more housing
- skohan 6y ago
  why is this mutually exclusive?
  - whatshisface 6y ago
    Rent control could technically be done by handing money to tennants to then hand to landlords, but in practice it's done by taking money away from landlords. Obviously, that's going to keep landlords from being able to give that money to construction companies. Another possible solution would be to take money away from tenants and landlords both to give directly to construction companies. That's socialized housing. However in the long run it's not likely to be much cheaper, because it's not like landlords are making that much profit in the first place. The profit in renting is about the cost of capital, the government is not going to do much better.
    - asdff 6y ago
      Is that how rent control is done in Europe? In the U.S. at least, rent control isn't taking money away from anyone. All rent control stipulates is that for the duration of your lease you cannot raise rent a certain percentage, such as 4% a year. Not having rent control allows rents to exceed earned wages for working people and pushes them to the street sooner than it pushes them out of the city.

tamrix 6y ago

Exactly, this is to increase rent prices by shorting supply, not to protect the people.

ClumsyPilot 6y ago

I feel the discussion about rent misses the forest for the trees: most houses are sold, not let out by developers. Price of house is affected by the interest rate much more than it is affected by the rent: i.e. if interest rates fall by half, and rents fall by half, house prices go up. If you could buy a house with zero percent interest rate, then any rent, no matter how tiny, is building you equity. Then you have to conisder thay mant houses are bough as 'investment' and many owners literally dont bother renting them out, they just wait for price of the house to go up. This is a serious problem in london

Spooky23 6y ago

Manhattan has been unchanged for 100 years. You’re either rich or poor to live there. It’s kinda bizarre that you see the ability of people to live in their home for 20 years as a problem. Frankly it goes to show the hypocrisy of many of the cheerleaders for higher density housing, pushing for a future where as an individual you get discarded and banished to the hinterlands when your value declines.

jpambrun 6y ago

Rent are controlled in Quebec since as far as I can remember. Rent are affordable in Montreal and supply is not a problem.

lotsofpulp 6y ago
It’s because there’s isn’t that many people that want to live on Montreal. The root issue in Berlin and SF and NYC is the demand far outstrips the supply. The only solution is to create more Berlins, but that’s not going to happen for myriad reasons.

asdff 6y ago

Where would that person in that rent controlled apartment be otherwise? Chances are, on the street. Moving requires upfront capital. It requires promise of a job at the other end. If you are in a high cost of living area like NYC or CA, you might have to quit your job if you want to find a more affordable apartment; there might be absolutely nothing affordable within a three hour drive of your job of cleaning up a downtown office or working a bar, and there may be absolutely no jobs in areas that are affordable. Throw in multiple earners, as is the case of many working poor in overcrowded rent controlled apartments, and you've complicated the problem further and make it even more difficult to wind down your life in one location and wind up in another. And let's be reasonable here, rent control is not some handout. It's not a subsidy or a tax. The price you pay on your first year in a rent controlled apartment is market rate. Rent control simply says rents cannot go up say, beyond 4% a year. Perfectly reasonable in a world where wages for the working poor rarely go up beyond 4% a year. If landlords want to make more rental income per year, they should instead lobby their city council members to allow them to build more units per parcel, rather than lobby to artificially constrain housing supply with zoning and/or red tape in effort to raise real estate values.

rayiner 6y ago
> Where would that person in that rent controlled apartment be otherwise? Or, you know, New Jersey. Or some suburb. The same place younger people have to go because rent control destroyed the housing market in the city.
- asdff 6y ago
  And that will work fine for 1 person or 10 people but not 100 people or the 1000 in that rent controlled building in NYC, because you don't have a Manhattan's worth of jobs for working people in some suburb in New Jersey. Sure, some people can afford the car, the insurance, the gas, the parking, the hours a day commuting, but for those that can't, they end up on the street. In some areas, like in CA, you really don't save very much at all going out to the suburbs. A house like this one (1) would be literally 1/10th the price if not less somewhere else, but such is the housing market for some metropolitan areas in the US these days. 1. https://www.zillow.com/homedetails/20722-Pioneer-Blvd-Lakewood-CA-90715/21129045_zpid/ https://www.zillow.com/homedetails/20722-Pioneer-Blvd-Lakewo...

junon 6y ago

I live in Berlin. What you're describing in "10 or 20 years" is already the case. That's why these actions are being taken now. I waited 6 months for an apartment here when I first moved. Pretty much everyone who doesn't want to spend insane prices on a unit has to. And even then, I'm still paying 500-600 more than I should be. It's insanity. The main problem is that there are immigrants (primarily from one country in particular, but that's less important) coming in and buying up all of the "houses" here (note that "House" in Berlin means a large apartment-complex-like house, not a single American Style, white picket fence house) and then increasing the prices slightly. I'm not anti-immigration, clearly, but there are still concrete economic effects that haven't been solved yet. I don't think anyone knows what these measures will lead to, but at least it's something.

mtrovo 6y ago
You don't need the slightly racist comment, biggest problem imho is that house ownership is very low in berlin (last time I read about it was around only 15% of people live on their owned houses) and really hard to change that. You have to think that everytime you're looking at buying a place you're competing with Blackrock, Deutsche Wohne and other not so nice funds with much more room for negotiation than you. That's why even if you and your partner makes top 10% salary you're probably not rich enough to own a house. And on top of that germany has very strict laws about transparency of home ownership so there's no clear way to know the distribution of home ownership or who are the biggest landlords and where they got their money from. Which is bad because there's a lot of shady people buying whole complexes, but it's also working as intended as a lot of politicians are also big landlords.
- junon 6y ago
  A country isn't a race, and I omitted the specific country for the very purpose of not painting a picture based on their skin color, because it has literally nothing to do with it. It's also not a reflection of their character or their culture, either. Please don't mis-assert that it's "racism". Also, have you been to Berlin? Of course people don't own houses here. Unless you're outside the ring, there are very few houses to be bought. If you're talking about owning apartments within the large houses here, it makes sense that a lot of people don't want to own them - because not a lot of young people want to be tied down to a 40sqm unit in one part of the city for the rest of their lives, or deal with all of the hassle of subletting and the tenancy laws here unless they were serious about holding and nurturing those securities.

zpeti 6y ago

But politicians need votes within 4-5 years. So who really cares. At least the young people getting apartments now are getting a good deal. Who cares about the future??

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