27 ms·

Berlin buys thousands of apartments from corporate landlords

297 points by based2 5y ago

goldenkey 5y ago
I think all countries should be eliminating real estate speculation ;-) Xi Jinping’s famous words are “housing is for living in and not for speculation.” When will American join these other countries? Netherlands: https://news.ycombinator.com/item?id=28422768 https://news.ycombinator.com/item?id=28422768 China: https://www.aljazeera.com/economy/2021/7/28/in-its-latest-crackdown-china-intensifies-focus-on-real-estate https://www.aljazeera.com/economy/2021/7/28/in-its-latest-cr...
- sokoloff 5y ago
  > Did they get ripped off by some owners that refused to sell and haggled upward? The first sentence of the article says they bought them from two corporate landlords.
  - goldenkey 5y ago
    Missed that. Thank you good sir.
- bserge 5y ago
  People are against the idea because in their minds they won't be able to buy 2-3 homes and rent one or two out. No, this is about companies owning 150,000 apartments in a city that they simply charge ever-increasing rent for. It's lunacy.
  - andrepd 5y ago
    Well to be fair buying 2-3 homes to rent is also undesirable rent-seeking, albeit on a smaller scale.
    - fragmede 5y ago
      It matters where the money goes afterwards. If it goes to a local landlord that spends it in that same neighborhood, improving it, vs going into an REIT that will make their investors, and their board, several states away happy. This is an important distinction that between trickle down theory and practice. Getting one person to $100mm vs making 10 people $10mm-airs vs 100 people to be single digit millionaires? Matters a lot in the long run, for a lot of reasons. We can't abolish rent-seeking entirely without overthrowing the whole system, so we have to realize that there are different shades of damage done by rent-seeking.
      - andrepd 5y ago
        Trickle-down doesn't work at any scale. If you want money to "trickle" down to a group of people, simply give cash to that group of people. This means lowering taxes on labour, for instance. > We can't abolish rent-seeking entirely without overthrowing the whole system Well we can certainly ameliorate it. Implementing a proper Georgist LVT would be a nice first step.
  - danlugo92 5y ago
    I can either own 2 apartments worth $50k each, or have $100k stock in a company that owns $15k aparments. Can't outlaw one without outlawing the other one. If you ban one entity from owning more than n apartments, they'll just create apartments/n shell companies.
    - nicoburns 5y ago
      Yes you can. You tie companies back to a specific person who has control over that company. And limit ownership of residential property by those people.
  - anovikov 5y ago
    Extending that idea, we arrive from lunacy to a good thing: a city that is completely owned by one company. Where police is the company's private guards, the city council is its board of directors, and municipal taxes are just fees the company charges. And that is a good thing. I'd live in such a city if there was one. For example: no homeless. This is all a private territory, and if you don't pay your rent, a guard escorts you off the premises. Very little if any crime because crime prevention is all in one hands and these hands are protecting by and large, their own private property and their profits (because if the crime rate goes up, rent goes down and rent is how they make money). A wall keeping undesirables out. Guards/police that can check your papers anytime just simply as they can say in a hotel - "what's your room number"? So no "undocumented" aliens. There can't be any constitutional etc. bullshit that could prevent them from having an actual 24/7 guarded wall and checkpoints with papers check around their PRIVATE property. It can be a functional society where everyone who's there, belongs there.
    - nicoburns 5y ago
      What would you do when the city decides to double prices overnight because it’s a private company focussed on profit maximisation and has a complete monopoly over absolutely everything
      - anovikov 5y ago
        What's the problem? Just move elsewhere. You don't own a place there - you can only rent - so you don't lose anything - it will be about as stupid/unworkable as one hotel in a city raking up room prices 2x just because they "try to maximise profit".
      - fragmede 5y ago
        Not to mention, what happens when you get laid off or fired? Ejected from your company town?
        anovikov 5y ago
        Why? A company where one works, rents office space there. You rent an apartment. You can work for another company there, or move elsewhere.
  - luckylion 5y ago
    Meh. I have friends who lived in a Vonovia apartment in a prefab in East Berlin. It's not for me, but the rent was pretty cheap (~10 Euros/sqm, heating + warm water included) and didn't get raised during the years they lived there. Berlin just came from a place of super low rent and is slowly catching up to other large German cities. Understandably, Berliners are in shock, but it's more "things are returning to normal" than "Berlin is so expensive, nobody can live there".
    - baybal2 5y ago
      It's a dreadful irony that communist plattenbau now cost more than homes further West.
    - notanzaiiswear 5y ago
      The simple fact is that the people who complain about their homes they rent from those companies are unable to find other accommodation for a comparable rent. Which in turn implies that it is not really the fault of those companies, otherwise somebody else would be able to provide better housing for the same price.
  - notanzaiiswear 5y ago
    You can not simply charge "ever-increasing rent". You can only charge what people are willing to pay. More people are pouring into the city every day who are prepared to pay more. Simple as that. Those companies owning 150K apartments are also shareholder companies, so "small people" and their pension plans will still be affected.
    - dpatterbee 5y ago
      People have to live somewhere, if someone's forced to choose between picking up an extra job to afford rent or living on the streets, they're gunna choose the first. I'd argue this is a bad thing and people deserve places to live.
      - notanzaiiswear 5y ago
        Yes, they have to live somewhere. Not necessarily in central Berlin, or central San Francisco. There are plenty of places with cheap housing in Germany. Also just because people need something, doesn't imply they have to be given those things for free. That's not usually how it works.
- andrepd 5y ago
  Houses can be homes to live in or can be an investment. They cannot be both. Since spending considerable labour and materials building concrete boxes for the ultimate purpose of speculation is silly, then it must be the former.
  - coralreef 5y ago
    What is an investment defined as? Because I'm pretty sure someone can buy a home, rent it out and make a monthly return on it, thus satisfying both a place to live and investment. Or live it in themselves as they ride the speculative wave.
    - TeMPOraL 5y ago
      Optimizing construction for investments leads to different houses, apartments and even neighborhoods than optimizing for living - the same way as optimizing your site for ad revenue leads to a completely different structure than optimizing it for actually being useful to your visitors/customers.
    - andrepd 5y ago
      > Because I'm pretty sure someone can buy a home, rent it out and make a monthly return on it, thus satisfying both a place to live and investment. No, they are inserting themselves in the process as a middle-man providing absolutely no service or added value. All they have is capital, a monopoly on capital wrt. the person renting the house. This lets them add a drastic markup on the monthly price of housing for the person renting, as a direct first-order effect, PLUS, as an indirect effect this mechanism incentivises speculation and raises house prices even more.
      - coralreef 5y ago
        Renting out a house is a service. Being a landlord means legal responsibilities and liabilities. Houses need to be up to code, maintained, insured, and this is expensive. Grass needs to be cut, pipes need to be fixed, appliances need to be in working order. The person who wants to rent a house has obviously chosen not to, or cannot afford to, buy a house. They get the upside of having to take no financial risk, ie. fire, tornado, flooding, economic/housing market collapse, etc. The downside is they do not have ownership and make no market gains.
- sva_ 5y ago
  I don't know much about housing in Berlin, but I think the story is that in the time after the Berlin wall was torn down, late 80s, the city really needed money. As a result, they sold hundreds of thousands of publicly-owned apartments to these private companies in the 90s and 00s for almost nothing.[0][1] Now those apartments are worth a lot more, and people are mad because housing is not affordable to many. Hence you often hear demands for dispossession. The whole story is probably a lot more complicated though, idk. [0] https://www.tagesspiegel.de/berlin/nach-der-privatisierung-was-aus-den-landeseigenen-wohnungen-wurde/24025260-all.html https://www.tagesspiegel.de/berlin/nach-der-privatisierung-w... [1] https://www.tagesspiegel.de/wirtschaft/immobilien/neubau-in-berlin-als-das-tafelsilber-verkauft-wurde/13019974-2.html https://www.tagesspiegel.de/wirtschaft/immobilien/neubau-in-... edit: if you read [1] for example, the private companies bought 65000 apartments for 400 million Euro. Now the city bought back 14750 apts for 2.46 billion Euro. Considering that these houses probably have barely been renovated if at all, the quality probably dropped significantly.
- FredPret 5y ago
  Well if Xi Jinping says so…
- yunohn 5y ago
  I wouldn’t use the Netherlands as an example, your link is only a “plan” they’re floating. The housing situation here is horrible - skyrocketing prices and massive corporate ownership. Real estate is massive money, and the politicians are in on it - so nothing is going to actually change. Plus, they take forever for new builds, so supply doesn’t meet demand at all.
  - wsc981 5y ago
    One member of the Dutch royal family even owns about 500 apartments (IIRC) in Amsterdam.
- imtringued 5y ago
  There you have it (the solution): https://youtu.be/Li_MGFRNqOE https://youtu.be/Li_MGFRNqOE
mjevans 5y ago
The only way to correct the market is for more supply to exist. Adequate supply would ensure that competition works.
- bserge 5y ago
  More supply on limited land. Which will be bought out by the same 5 real estate companies, just like everything else.
  - harryh 5y ago
    Even if you were right (and I don't think you are) about the same 5 real estate companies buying up all added supply, it wouldn't matter. Those 5 companies would still be subject to the forces of supply and demand. Increased supply with flat demand means falling prices. https://twitter.com/cw4emeryville/status/1438862784024891394 https://twitter.com/cw4emeryville/status/1438862784024891394
  - inglor_cz 5y ago
    Remarkably, Austrian capital Vienna manages to keep a good municipal stock of affordable housing. But other cities failed to imitate Viennese methods. Also, Berlin has a lot of land that could be built upon. Land is not a scarce resource in that particular corner of Europe.
    - Sebb767 5y ago
      Berlin itself is quite full (with the exception of the airport park, which is intentionally kept as a green area). There is a lot of cheap land available in Germany, especially in the countryside on the east, but near the city the situation is different.
      - inglor_cz 5y ago
        Looking now at Berlin from the bird's perspective, Tegel airport could probably be redeveloped now that the new airport is in operation. Also, existing land use could see some improvements. Does it make sense to have a huge solar electricity park like this: https://mapy.cz/s/pohetunuzu https://mapy.cz/s/pohetunuzu in the middle of a city with a shortage of housing? That is 150 x 500 m piece of land where at least 5 thousand people could live comfortably even without a need for high-rises. (6 story houses or so). In a walking distance from an existing U-bahn station. (Not to mention the other factories around.) There is a discussion in Prague about moving some big shopping centers from the wider center to the outskirts and using the freed land for construction. But everything takes long in our state of bureaucracy.
qeternity 5y ago
As another commenter notes, housing is unaffordable because marginal demand is greater than marginal supply. We can either decrease demand, or increase supply. Housing demand is pretty sticky, so that leaves us with one option.
- mupuff1234 5y ago
  Only if you think that the demand for real estate is mostly driven by housing needs, and not speculation & monopoly style hoarding artificially driving prices higher.
  - deleted 5y ago
    [deleted]
  - qeternity 5y ago
    Without a doubt, it is not mostly driven by those things. Investors have lots of choice about what to invest in. People don’t have any choice about needing shelter. They will pay whatever the price is. I get that wealthy investors driving up housing prices gets people angry and is a good rallying cry. But it’s such a small piece of demand.
    - mupuff1234 5y ago
      Define small? Even an additional 2-3% increase in supply can have quite a large affect on prices. For example, pre-covid, there was a vast number of vacant apartments in NYC. https://www.6sqft.com/nearly-250000-nyc-rental-apartments-sit-vacant/ https://www.6sqft.com/nearly-250000-nyc-rental-apartments-si... But also being in NYC during COVID and watching the real estate market react, it feels far from an efficient market, as one side has more information, resources and time. https://www.businessinsider.com/new-york-city-rent-deals-landlords-holding-apartments-2021-3 https://www.businessinsider.com/new-york-city-rent-deals-lan...
- djrobstep 5y ago
  Please stop saying this - house prices in Australia have recorded record growth in the same year as record low immigration due to covid restrictions. The primary driver is low interest rates enabling cheap debt, not "supply".
linuxftw 5y ago
Socialized housing only creates slums. Tenants have no incentive to keep the place nice, government rationing of maintenance ensures they degrade faster than the government is willing to spend to keep them functioning. Anyone that can afford better moves out. Eventually (not that long), only destitute remain.
- FredPret 5y ago
  This, 100%. Then a new generation grows up in said slum with its attendant effects on their development and the cycle worsens
  - kebos 5y ago
    I'll take social housing over the homeless problem you get in countries without large social housing stock 100x. Maybe some % of people just aren't going to break the cycle. I'd still rather they aren't homeless and causing decay on the streets.
  - nicoffeine 5y ago
    That's why Vienna mixes subsidized housing and regular housing, often in the same building. They also allow families to stay in their housing or purchase it as long as they pay the higher rate related to their rising income.[1] The problem in the US is that there is no gray area for subsidized housing. As soon as you hit some magic number, you lose all of your benefits. The people who game the system to stay under this number are not stupid, but acting rationally because they know their new job may not stick around. They would rather have housing security than take a chance at losing everything and living in the street until their tax return shows that they are poor again. [1] https://www.newstatesman.com/spotlight/2019/09/housing-basic-human-right-vienna-model-social-housing https://www.newstatesman.com/spotlight/2019/09/housing-basic...
- nicbou 5y ago
  Berlin has a few city-owned housing companies [1] that provide above average service. You'd be much happier with DeGeWo than with Akelius. [1] https://allaboutberlin.com/guides/find-a-flat-in-berlin#housing-companies https://allaboutberlin.com/guides/find-a-flat-in-berlin#hous...
aomobile 5y ago
Didn’t they sell government housing before? Anyway this is probably a bad idea as governments are bad landlords and taxpayers will get the bill eventually
- oreilles 5y ago
  Except contrary to any other landlord, the government doesn't expect to earn money but to have a balanced budget. This is why medical expanses are much higher in the US than in any European country. This is why all basic necessities should be controlled by the government. Water, roads, internet, housing.
  - deleted 5y ago
    [deleted]
  - notanzaiiswear 5y ago
    Medical staff in the US also has much better pay than in European countries with a socialist health care system. And if you are insured, the costs don't matter that much.
    - msrenee 5y ago
      Oh yes they do. I've got "good" insurance and have such fun when I get a surprise bill for $150 for talking to a specialist for 15 minutes when I thought it would be a $25 copay under my plan. Costs a couple grand if I end up in the hospital. $25 every time I see a doctor. That adds up when it takes 4 visits over 2 weeks to figure out what the problem is and what medication I need. And the insurance itself isn't cheap.
      - notanzaiiswear 5y ago
        Why don't you know the costs upfront? "Socialist insurance" doesn't automatically cover everything you want or need, by the way. Rather, there is a government mandated list of things that are covered. There are presumably different types of private insurances, sometimes it makes sense to agree on "self pay" for small amounts, sometimes it doesn't. Also if "socialist insurance" would cover your 15 minute talk, you would never know it cost 150$. You would just wonder after a while why the health care system always seems to be on the brink of collapse.
fallingfrog 5y ago
A lot of people are saying that housing supply needs to go up to resolve the problem. This is essentially correct! But the market is not doing it, so government intervention is reasonable. The government should buy land, construct a whole bunch of high quality housing on it, then rent it at below market rates. Rents in the rest of the city will collapse downward to compete. Problem solved. This is the same tactic that the us government used to make electricity cheap in the 1930’s with the construction of the grand coulee dam. Edit: Look: governments all over the world are willing to plow unlimited amounts of money into the stock market when rich people are in trouble. But when young people just starting out can’t get an affordable apartment, somehow nothing can be done. Let’s get real. This is a matter of priorities.
- luckylion 5y ago
  > The government should buy land, construct a whole bunch of high quality housing on it, then rent it at below market rates. They can't, because they'd need to zone that land for housing use (a different part of the government is responsible and won't do it) and they'd have to relax the regulations for building houses to make it cheaper (another different part of the government is responsible and won't do it). You can't spend your budget on subsidized housing if you also want schools, infrastructure and low tax rates.
  - fallingfrog 5y ago
    Low tax rates for existing landowners are not the goal here; low rents for young people are what you want. One makes the city grow and thrive, the other just allows old or rich people to have big piles of money. I said high quality housing, not crappy housing. No need to relax regulations or fiddle with zoning.
    - luckylion 5y ago
      No, I meant tax rates in general. Berlin levies lower business taxes compared to other German cities, complains that it has less tax income and gets subsidized by the other German states while still complaining about being poor. It's an act, they could just raise taxes, but prefer not to. > I said high quality housing, not crappy housing. Okay, so what services should be cut to pay for high quality housing and then rent it out below cost? Schools? Fire fighters? Social programs? And since zoning should not be a concern, do they just build over parks?
yunohn 5y ago
Not sure how much of a real change this will make, but man, what a bad deal for taxpayers. They shouldn’t have allowed rampant corporate ownership in the first place, but now they’re going and spending public money on overpriced real estate.
- secondcoming 5y ago
  This is happening now in the UK. Lloyds bank [0] and John Lewis [1], a retailer, are both planning to tap into this revenue stream. [0] https://www.theguardian.com/business/2021/aug/19/lloyds-plans-big-move-into-uk-rental-market-with-50000-homes https://www.theguardian.com/business/2021/aug/19/lloyds-plan... [1] https://www.theguardian.com/business/2021/jul/04/john-lewis-plans-to-build-10000-rental-homes-on-its-land-waitrose https://www.theguardian.com/business/2021/jul/04/john-lewis-...
  - dazc 5y ago
    I am all for big businesses moving into buy to rent. There are far too many amatuer landlords in the UK making a living by renting out poor quality housing. My office landlord also has two small flats above (think glorified bedsits) and his partner also rents out a tiny cottage. This is their living (aprox. £3k a month), neither works or has any other business, all from a 'portfolio' of properties that maybe cost £150k twelve to fifteen years ago. As an example of market inefficiency, multiply this across the country and it's not hard to argue that the housing market is severely broken.
    - Ekaros 5y ago
      I too have no issues with large business getting involved with rentals. As long as it is clear for everyone involved that housing should be low margin business. That is very low, but relatively safe returns and mostly not from appreciation of assets.
    - bjackman 5y ago
      A lot of comments in this thread about corporate buy-to-let seem reasonable, but only under the nihilistic assumption that prices cannot fall and home ownership must be perennially out of reach for the median earner. What about instead of shifting from private parasitic landlords to corporate parasitic landlords, we just let people buy the homes they live in (by enacting one of many possible policies to limit the profitability of BTL and thus reduce competition for homebuyers)? It just doesn't seem to make any sense to try and apply free market principles to housing. There's absolutely no benefit.
nkmnz 5y ago
For everyone not familiar with German rental markets: Berlin is quite cheap compared to other big and small cities. From cities as big as Munich to smaller ones like Mainz, most cities are more expensive (except for those in the former GDR). Cheap(er) rents are part of the reason why people move to Berlin - the more the Senate does to control rent, the more people will want to move to Berlin. The only way is to increase supply - or rebuild the wall ;-)
- Tenoke 5y ago
  It's gotten way closer than even 5 years ago. I 'overpay' as an ex-pat in Berlin but my rent is within 10% of the average Munich rent (unless it's risen there recently as well) for a comparable place.
  - nkmnz 5y ago
    Interesting. I guess it’s a more high end rental? I don’t know the High end markets in both places that well, but I know it’s much more expensive for students and others with low income to live in Munich (which has risen recently, indeed) than it is in Berlin. But the gap might be closing nevertheless.
    - skohan 5y ago
      It wouldn't have to be. Finding a flat is extremely competitive in Berlin, so it's not uncommon for agencies and unscrupulous landlords to take advantage of "Auslanders" who might not be aware of rent control laws. When the rents were temporarily lowered to the "fair rate" during corona, and everyone could see what they should be paying, this was eye-opening for a lot of my friends.
      - nkmnz 5y ago
        What do you mean by "fair rate during corona"? The local government broke the federal constitution by limiting rents in a way it has no jurisdiction for. We should be very happy that our constitutional court prevented further unlawful behaviour.
ArmandGrillet 5y ago
Instead of buying what they sold two decades ago for practically nothing, they should have built more supply. Open Google Maps and check Kreuzberg, a district of Berlin. South of it is Tempelhofer Feld, 355 hectares (a third of Kreuzberg), a discontinued airport next to the city only used for people to bike and do barbecues. It's an old airport so it looks bland and there are smaller parks right next to it offering the space to do barbecues and play with your dog. It's been a decade that this airport is not being used yet it's still in that state. Paris' housing crisis is mostly due to the road surrounding it (le Périph') but Berlin doest not have that yet housing is getting more expensive extremely fast, faster than in Paris actually.
- nicbou 5y ago
  Tempelhofer Feld is a green space where people can meet, exercise, and enjoy their free time without being expected to spend money. Berlin's green spaces is one of its strongest assets. Don't let that city turn into a concrete hell. I'd much rather see Kleingarten disappear than public spaces.
  - notanzaiiswear 5y ago
    They wanted to build just on a small stripe on the side of it, it is not as if they would have to fill the whole place with houses. But even that was shot down via "Volksentscheid".
    - probably_wrong 5y ago
      I think the referendum against building in Tempelhof saw right through the project and understood what its end goal would have been: it would have created apartments that those being priced out of Berlin wouldn't have been able to afford. The losses would be socialized (namely, the park) while the benefits would go to the wealthy. For those unfamiliar with the situation I found this article [1] which, biased as it is, I think accurately reflects the opinion of the common Berliner at the time. If the plan had proposed 100% social housing, I bet the story would have been different. [1] https://www.exberliner.com/features/opinion/everyone-is-lying-to-you-about-tempelhofer-feld/ https://www.exberliner.com/features/opinion/everyone-is-lyin...
deleted 5y ago
[deleted]
nicoffeine 5y ago
Posted in another thread, but there is a very interesting theory about why Germany has stable housing prices compared to other nations. This funding model may also explain why local municipalities are against multi-family housing, which is driving sprawl and unwalkable zoning policy in the US. 'Local German officials, like local leaders everywhere, seek bigger budgets to provide more and better services to their constituents. What’s different about Germany is that the way to get bigger budgets is to increase local populations. And, as Professor Buettner says, “Ultimately, to get people, municipalities will need to support housing.” The result is a system of incentives that is the opposite of “fiscal zoning”—the US practice of zoning land in ways that maximize local governments’ income and minimize their costs. In places with high sales taxes, such as Washington State, leaders zone more land for shopping centers. In places where residential property taxes are capped, such as California, they zone less land for homes and more for offices. In affluent suburbs, they often zone land for houses on large lots, excluding low-income people. Maximizing property values is such a central concern of local government in the United States that Dartmouth economist William Fischel developed the notion into an entire political theory. His “homevoter hypothesis” holds that local governments are almost single-mindedly focused on maximizing real estate values, because homeowners typically vote their home values in local elections. German jurisdictions gain financially by maximizing population, not house values, and because renters outnumber homeowners in the country, homevoters are not the dominant electoral force in local German elections. Renters are.' https://www.sightline.org/2021/05/27/yes-other-countries-do-housing-better-case-2-germany/ https://www.sightline.org/2021/05/27/yes-other-countries-do-...
- sagarm 5y ago
  I'm very confused: if you want to have more residents in your city with a fixed amount of land, then you need multifamily housing. Walkability is also associated with density and benefits from multi-family and mixed use zoning.
fnord77 5y ago
SF is looking into buying unsold luxury condos from developers.
- no_butterscotch 5y ago
  To put homeless in?
  - fnord77 5y ago
    yes
refurb 5y ago
I recall on rule of fixing a market problem is to apply the most direct fix possible. The government would be better off just giving money directly to renters to pay their rent. This has the added benefit that the cost of subsidy of very transparent and it provides a nice incentive to increase housing supply.
- axiosgunnar 5y ago
  I, as a taxpayer, refuse to finance a few lucky grandfathered-in people that want to live in a highly sought-after district but cannot afford the rent. There is no human right to an apartment in the city center of a megapolis.
  - refurb 5y ago
    But it’s no different than your tax dollars buying housing from private entities or building public housing and charging lower than market rent. It’s all dollars out of your pocket.
- dredmorbius 5y ago
  Land is an inelastic good. "Buy land. They ain't makin' any more of the stuff." -- Will Rogers In economics, rents are goods or services whose supply is inelastic (doesn't increase when demand increases), so that any increase in demand simply results in a rise in price. Another way of looking at this is that all surplus value of that service is appropriated by the seller. This contrasts to normal commodity goods in which price tends to fall to the cost of provisioning. Note that wages generally behave this way as well, with the result that unskilled workers (lacking any wage premium) in a rents-based world are squeezed between wages which deny them all surplus value of labour and rents which appropriate all surplus value of housing. Any increase in wages is immediately met by a corresponding increase in rents. Your proposal of a direct rent subsidy is the equivalent of a wage increase. You'll pay it to the workers, who'll in turn pass it on directly to the landlords. Counterintuitively: if you want to lower the cost of housing, tax the unimproved value of land. Where regulation allows for increased utilisation density, the result is that the tax (as with the wage increase) is passed on to landlords. It effectively takes up the surplus value of housing, and appropriates it for public expenditure. Landlord profits are reduced. Landlords can increase profits by increasing the real estate units available --- by building more units on the same land. This means one or more of less unbuilt land per property (setbacks and easements), smaller units (more people in a given space), or more floors. Building two storeys rather than one doubles the available real estate. Building up 5 or 10 storeys increases land by a factor of 5 or 10. (It's not necessary to build cloud-scraping towers, even modest increases in height limits will greatly increase housing densities.) Housing is a good for which increasing taxes, if done correctly, INCREASES supply. Highly counterintuitive, but true. https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax
lifeisstillgood 5y ago
The housing market is complex, but one point I would like to make, is that if there is now a (global?) opportunity to borrow capital, buy houses on a mass scale and rent them out, that implies to me that there is a failure in mortgage market - families want housing in a location, it is possible to borrow money and buy them, but those families don't have access to that monet. This implies a) inequality in wealth and incomes b) failure to change mortgage market to account for higher risk in harder to reach areas (this is what savings and loans were literally made for) c) errr d) that's it.
- IkmoIkmo 5y ago
  > The housing market is complex, but one point I would like to make, is that if there is now a (global?) opportunity to borrow capital, buy houses on a mass scale and rent them out, that implies to me that there is a failure in mortgage market - families want housing in a location, it is possible to borrow money and buy them, but those families don't have access to that monet. Not sure I see the issue. Renting and owning has very different risk profiles, which is why you'll find people can rent a place they're unable to buy. The risks are with loss of income, e.g. due to job loss, sickness etc. Such things are somewhat inevitable in the span of a 30y mortgage. In such a situation the tenant can move to more appropriate alternative housing, e.g. moving to a smaller home, a home that's not as well located, sharing a home with others, friends, family etc. In the case of an owner it gets trickier, typically the person would eventually be forced to sell the house to be released from the contractual obligations to pay the mortgage. The risk events' probabilities correlate, i.e. you're more likely to lose your job in an economic downturn, as does everyone else, which means home prices are more likely to be low during an economic downturn, meaning a forced-sale during such times can mean you're selling your home for less than the value of the loan, leaving you not only out of income, out of a home, but also with a sizeable debt. In other words, there can be reasonable explanations for why a government could buy homes and rent them out to tenants who can afford the rent, while those same tenants could not afford an equivalent mortgage. Second, I think it'd be very sensible to assume that the government is not going to be renting out these units at market rate. In other words, they're subsidising the tenants, with taxpayer money. That's why the rent would be affordable, but the purchase would not, for the tenants. If anything that implies this decision is lowering the effects of inequalities, due to in-effect a redistribution of wealth from rich to poor.
kartoshechka 5y ago
SyntaxError: JSON.parse: unexpected character at line 1 column 1 of the JSON data ayyy spa for a static content site
- b0ner_t0ner 5y ago
  Source is HTML, but came back as JSON MIME type. Something in their memcached borked.
dathinab 5y ago
A lot of people say that "more houses need to be build" to fix it. The problem is less "not having apartments" but "not having affordable apartments". A a lot of "housing" had been build in the recent years but hardly any of it increased the "supply of affordable housing". Most had been very expensive "luxurious"(1) living spaces, from small one family houses to large "luxus" apartments. At the same time a lot of affordable living space has been converted into non affordable ones or removed from the rental marked. Reasons for this are many fold and include: - Prices in Berlin had been unrealistic low, so once they started rising/people realized it they rose fast attracting a lot of speculative investments, speeding up the price rise and level above what it should have been. - Stupid formulated laws around "energy" renovations turned out to be a perfect backdoor to circumvent existing limitations about how much rent can rise, especially if combined with little continues wide spread Illegal acting allowed massively bumping prices in short time. - Certain tax changes done ~7 or so years ago increased renovation cost massively, and the price boom and building (of non affordable housing) boom made it hard to build/renovate affordable housing for people just owning a small number of apartments). - Also maybe thinks like Aribnb had a bad effect, but I can't judge this. So what should be changed IMHO: 1. Change the energy renovation law to not be trivially abusable. 2. Make regulations which favor affordable rentable living space over all other versions (also favor it over office space). 3. Change certain laws about tax handling of losses from "rent", i.e. there are people which but absurd prices on apartments with the intent of them to not ever be rented because they bought them for speculative investments and selling a unrelated one is easier/better. If a apartment is in a area with a deficit of (affordable) living space you should not be able to tax-deduct losses because you werent able to rent out an apartment. (Similar the kind of "buy to sell at a higher price later" behaviour should be illegal.). 4. Add a legal method the state can use to punish organizations which en-mass do a lot of systematic small illegal things which each on themself are not worth opening up a law suite and affect a different person, like systematically trying to increase rents slightly more then average every time. 5. Maybe (idk, only if it matter) auto-sync databases of platforms like Airbnb with residential databases to auto detect abuse. 6. Undo mistakes of the past where Berlin reduced affordable housing programs. (1): Price wise, not necessarily quality wise.
game_the0ry 5y ago
Former real estate investment professional here. This is likely a bad deal for the German taxpayer and a great deal for the corporate landlords. Essentially, the Berlin gov has given the corporate landlords a profitable exit for their investments. The corp landlords, seeing the writing on the wall and fearing lower rents, unrest among tenants, and diminishing exit opportunities via selling to the market (which wont want to deal with the risks) can now exit by selling to the government. The German / Berlin gov gets an investment that is all but guaranteed to be a loss assuming they drop the rents for the tenants. Thus, tax payer eats the loss. I see something similar playing out in the US, and not just for corp landlords - it could happen to baby boomers looking to sell their homes upon retirement. During the last housing crisis in '08, Alan Greenspan and Warren Buffet suggested buying homes and destroying them, effectively lowering the housing supply in order keep prices at the same level in a market with lower demand [1]. Key takeaway from all this - governments and the folks that influence them (who also own and get their primary income from assets) wont let asset prices go down. They would rather destroy assets and lower supply to protect price levels. This dynamic teed-up a political war between those who own assets vs those who do not, young vs old, establishment vs anti-establishment, etc. I feel for tenants - I am one myself. However, better to let the market to clear market inefficiencies. [1] https://www.fool.com/investing/general/2011/10/06/creative-destruction-in-the-housing-market.aspx https://www.fool.com/investing/general/2011/10/06/creative-d...
- markenqualitaet 5y ago
  Maybe more complex. Legally, you cannot increase rents above 10% of the respective average here. If Berlin-owned rents aren't increasing, this will slow down the whole market. Now, this depends a lot on how the law will be enforced in the future.
richwater 5y ago
Anyone who thinks you can take this model and apply it to America, with all the evidence we have of horrific public projects, is quite literally insane.
Leparamour 5y ago
I'm a bit surprised. I thought the referendum over this wasn't due for another week, since there will be general and state elections next sunday. This looks like a hail mary move before elections could have switched up majorities and brought a change in administration. As a born-Berliner I'm highly critical of this populist move, that was mainly organized by transplants who demand stuff for free all the time: UBI AND open borders. Unfazed by the fact that somebody will have to foot the bill for socialist cloud castles eventually. These people will move back to their hometowns when they have made the living situation in Berlin become untenable, for me it's my home and where all of my family lives.
- markenqualitaet 5y ago
  The above comment is propaganda. I doubt the person is from Berlin or lives there still. The Deutsche Wohnen Enteignung campaign has broad and diverse support across the population. This was actually proven in an investigation for possible "radical left" influences, suggested by the conservative opposition.
  - Leparamour 5y ago
    >The above comment is propaganda. I doubt the person is from Berlin or lives there still. Haha, what? I should probably be grateful you didn't outright call me a Nazi or something. If you're in fact involved with the campaign feel free to ask around where your fellow people are from originally. How about you? Real Berliner? Or do you move back if Berlin doesn't pan out for you? For instance, I haven't met a single signature collector that was native to Berlin and boy have I been engaging them in discussion when I ran into them every day while commuting between Neukölln and Friedrichshain. >The Deutsche Wohnen Enteignung campaign has broad and diverse support across the population. This is actual propaganda. >This was actually proven in an investigation for possible "radical left" influences Explain this then: https://interventionistische-linke.org/beitrag/unterstutzt-mit-uns-deutsche-wohnen-co-enteignen https://interventionistische-linke.org/beitrag/unterstutzt-m...
    - markenqualitaet 5y ago
acd 5y ago
Corporate landlords are speculating on housing with central bank artificial lowered interest rates. Its also maybe not in accordance with UN human rights article 17. "Everyone has the right to own property alone as well as in association with others." If a corporation owns the property and you have to rent then it may not be in compliance with article 17. https://www.un.org/en/about-us/universal-declaration-of-human-rights https://www.un.org/en/about-us/universal-declaration-of-huma...
- dragonwriter 5y ago
  > If a corporation owns the property and you have to rent then it may not be in compliance with article 17. A corporation is a vehicle for owning property in association, so denying it the right to use itd assets to acquire property would arguably violate Article 17, as would not permitting such associative ownership vehicles. The right to own property doesn't imply the means to individually afford the particular quantity, class, or specific item of property you desire, only the freedom to use the resources you have to acquire property. EDIT: OTOH, if the market conditions the government allows to persist make adequate housing (not necessarily ownership) unaffordable, after whatever social support is provided and considering the cost of other necessities, it is a violation of Section 1 of Article 25. “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.”
Bombthecat 5y ago
And in ten years, Berlin will sell them back for cheap to another firm...
madballster 5y ago
Every taxpayer in Berlin is basically subsidizing these state owned apartments which are rented out at below market rates.
nkmnz 5y ago
treasure trove of data about the berlin housing market: https://guthmann.estate/de/marktreport/berlin/ https://guthmann.estate/de/marktreport/berlin/
einpoklum 5y ago
Why buy rather than expropriate? Berlin has lots of people with no apartments, and the commercial corporations have apartments without permanent residents. Instead, Berlin is funneling ~200K EUR of public funds x 14,750 to partially rectify an allocation anomaly of Capitalism. (If you're against expropriation - it could just be a massively high tax on apartments owned besides the one you physically live in; or a strong de-criminalization of squatting of such apartments, including allowing for registering as the resident based on actual residence etc.)
hikerclimber1 5y ago
Everything is subjective. Especially laws
dredmorbius 5y ago
For those wondering what drives real estate prices, there's a look at the most expensive ZIP code in the US, 95027, a/k/a Atherton, CA: The town’s ascendance stems largely from its single-family zoning, 1-acre-minimum lot sizes, flat land, streamlined permits and changing buyer demographics — which have translated into soaring house sizes and skyrocketing prices. https://www.sfchronicle.com/business/networth/article/Here-s-how-Atherton-became-the-Bay-Area-s-14188989.php https://www.sfchronicle.com/business/networth/article/Here-s... If you want abundant, affordable housing, invert at least those first two conditions: - Multi-family zoning - Small lot sizes Flat land and streamlined permits for denser housing will also help. Mostly, though, you've got to build. And tax land values to keep that from appreciating with no end.

297 points by based2 5y ago

I think all countries should be eliminating real estate speculation ;-) Xi Jinping’s famous words are “housing is for living in and not for speculation.” When will American join these other countries? Netherlands: https://news.ycombinator.com/item?id=28422768 https://news.ycombinator.com/item?id=28422768 China: https://www.aljazeera.com/economy/2021/7/28/in-its-latest-crackdown-china-intensifies-focus-on-real-estate https://www.aljazeera.com/economy/2021/7/28/in-its-latest-cr...

sokoloff 5y ago
> Did they get ripped off by some owners that refused to sell and haggled upward? The first sentence of the article says they bought them from two corporate landlords.
- goldenkey 5y ago
  Missed that. Thank you good sir.
bserge 5y ago
People are against the idea because in their minds they won't be able to buy 2-3 homes and rent one or two out. No, this is about companies owning 150,000 apartments in a city that they simply charge ever-increasing rent for. It's lunacy.
- andrepd 5y ago
  Well to be fair buying 2-3 homes to rent is also undesirable rent-seeking, albeit on a smaller scale.
  - fragmede 5y ago
    It matters where the money goes afterwards. If it goes to a local landlord that spends it in that same neighborhood, improving it, vs going into an REIT that will make their investors, and their board, several states away happy. This is an important distinction that between trickle down theory and practice. Getting one person to $100mm vs making 10 people $10mm-airs vs 100 people to be single digit millionaires? Matters a lot in the long run, for a lot of reasons. We can't abolish rent-seeking entirely without overthrowing the whole system, so we have to realize that there are different shades of damage done by rent-seeking.
    - andrepd 5y ago
      Trickle-down doesn't work at any scale. If you want money to "trickle" down to a group of people, simply give cash to that group of people. This means lowering taxes on labour, for instance. > We can't abolish rent-seeking entirely without overthrowing the whole system Well we can certainly ameliorate it. Implementing a proper Georgist LVT would be a nice first step.
- danlugo92 5y ago
  I can either own 2 apartments worth $50k each, or have $100k stock in a company that owns $15k aparments. Can't outlaw one without outlawing the other one. If you ban one entity from owning more than n apartments, they'll just create apartments/n shell companies.
  - nicoburns 5y ago
    Yes you can. You tie companies back to a specific person who has control over that company. And limit ownership of residential property by those people.
- anovikov 5y ago
  Extending that idea, we arrive from lunacy to a good thing: a city that is completely owned by one company. Where police is the company's private guards, the city council is its board of directors, and municipal taxes are just fees the company charges. And that is a good thing. I'd live in such a city if there was one. For example: no homeless. This is all a private territory, and if you don't pay your rent, a guard escorts you off the premises. Very little if any crime because crime prevention is all in one hands and these hands are protecting by and large, their own private property and their profits (because if the crime rate goes up, rent goes down and rent is how they make money). A wall keeping undesirables out. Guards/police that can check your papers anytime just simply as they can say in a hotel - "what's your room number"? So no "undocumented" aliens. There can't be any constitutional etc. bullshit that could prevent them from having an actual 24/7 guarded wall and checkpoints with papers check around their PRIVATE property. It can be a functional society where everyone who's there, belongs there.
  - nicoburns 5y ago
    What would you do when the city decides to double prices overnight because it’s a private company focussed on profit maximisation and has a complete monopoly over absolutely everything
    - anovikov 5y ago
      What's the problem? Just move elsewhere. You don't own a place there - you can only rent - so you don't lose anything - it will be about as stupid/unworkable as one hotel in a city raking up room prices 2x just because they "try to maximise profit".
    - fragmede 5y ago
      Not to mention, what happens when you get laid off or fired? Ejected from your company town?
      - anovikov 5y ago
        Why? A company where one works, rents office space there. You rent an apartment. You can work for another company there, or move elsewhere.
- luckylion 5y ago
  Meh. I have friends who lived in a Vonovia apartment in a prefab in East Berlin. It's not for me, but the rent was pretty cheap (~10 Euros/sqm, heating + warm water included) and didn't get raised during the years they lived there. Berlin just came from a place of super low rent and is slowly catching up to other large German cities. Understandably, Berliners are in shock, but it's more "things are returning to normal" than "Berlin is so expensive, nobody can live there".
  - baybal2 5y ago
    It's a dreadful irony that communist plattenbau now cost more than homes further West.
  - notanzaiiswear 5y ago
    The simple fact is that the people who complain about their homes they rent from those companies are unable to find other accommodation for a comparable rent. Which in turn implies that it is not really the fault of those companies, otherwise somebody else would be able to provide better housing for the same price.
- notanzaiiswear 5y ago
  You can not simply charge "ever-increasing rent". You can only charge what people are willing to pay. More people are pouring into the city every day who are prepared to pay more. Simple as that. Those companies owning 150K apartments are also shareholder companies, so "small people" and their pension plans will still be affected.
  - dpatterbee 5y ago
    People have to live somewhere, if someone's forced to choose between picking up an extra job to afford rent or living on the streets, they're gunna choose the first. I'd argue this is a bad thing and people deserve places to live.
    - notanzaiiswear 5y ago
      Yes, they have to live somewhere. Not necessarily in central Berlin, or central San Francisco. There are plenty of places with cheap housing in Germany. Also just because people need something, doesn't imply they have to be given those things for free. That's not usually how it works.
andrepd 5y ago
Houses can be homes to live in or can be an investment. They cannot be both. Since spending considerable labour and materials building concrete boxes for the ultimate purpose of speculation is silly, then it must be the former.
- coralreef 5y ago
  What is an investment defined as? Because I'm pretty sure someone can buy a home, rent it out and make a monthly return on it, thus satisfying both a place to live and investment. Or live it in themselves as they ride the speculative wave.
  - TeMPOraL 5y ago
    Optimizing construction for investments leads to different houses, apartments and even neighborhoods than optimizing for living - the same way as optimizing your site for ad revenue leads to a completely different structure than optimizing it for actually being useful to your visitors/customers.
  - andrepd 5y ago
    > Because I'm pretty sure someone can buy a home, rent it out and make a monthly return on it, thus satisfying both a place to live and investment. No, they are inserting themselves in the process as a middle-man providing absolutely no service or added value. All they have is capital, a monopoly on capital wrt. the person renting the house. This lets them add a drastic markup on the monthly price of housing for the person renting, as a direct first-order effect, PLUS, as an indirect effect this mechanism incentivises speculation and raises house prices even more.
    - coralreef 5y ago
      Renting out a house is a service. Being a landlord means legal responsibilities and liabilities. Houses need to be up to code, maintained, insured, and this is expensive. Grass needs to be cut, pipes need to be fixed, appliances need to be in working order. The person who wants to rent a house has obviously chosen not to, or cannot afford to, buy a house. They get the upside of having to take no financial risk, ie. fire, tornado, flooding, economic/housing market collapse, etc. The downside is they do not have ownership and make no market gains.
sva_ 5y ago
I don't know much about housing in Berlin, but I think the story is that in the time after the Berlin wall was torn down, late 80s, the city really needed money. As a result, they sold hundreds of thousands of publicly-owned apartments to these private companies in the 90s and 00s for almost nothing.[0][1] Now those apartments are worth a lot more, and people are mad because housing is not affordable to many. Hence you often hear demands for dispossession. The whole story is probably a lot more complicated though, idk. [0] https://www.tagesspiegel.de/berlin/nach-der-privatisierung-was-aus-den-landeseigenen-wohnungen-wurde/24025260-all.html https://www.tagesspiegel.de/berlin/nach-der-privatisierung-w... [1] https://www.tagesspiegel.de/wirtschaft/immobilien/neubau-in-berlin-als-das-tafelsilber-verkauft-wurde/13019974-2.html https://www.tagesspiegel.de/wirtschaft/immobilien/neubau-in-... edit: if you read [1] for example, the private companies bought 65000 apartments for 400 million Euro. Now the city bought back 14750 apts for 2.46 billion Euro. Considering that these houses probably have barely been renovated if at all, the quality probably dropped significantly.
FredPret 5y ago
Well if Xi Jinping says so…
yunohn 5y ago
I wouldn’t use the Netherlands as an example, your link is only a “plan” they’re floating. The housing situation here is horrible - skyrocketing prices and massive corporate ownership. Real estate is massive money, and the politicians are in on it - so nothing is going to actually change. Plus, they take forever for new builds, so supply doesn’t meet demand at all.
- wsc981 5y ago
  One member of the Dutch royal family even owns about 500 apartments (IIRC) in Amsterdam.
imtringued 5y ago
There you have it (the solution): https://youtu.be/Li_MGFRNqOE https://youtu.be/Li_MGFRNqOE

mjevans 5y ago

The only way to correct the market is for more supply to exist. Adequate supply would ensure that competition works.

bserge 5y ago
More supply on limited land. Which will be bought out by the same 5 real estate companies, just like everything else.
- harryh 5y ago
  Even if you were right (and I don't think you are) about the same 5 real estate companies buying up all added supply, it wouldn't matter. Those 5 companies would still be subject to the forces of supply and demand. Increased supply with flat demand means falling prices. https://twitter.com/cw4emeryville/status/1438862784024891394 https://twitter.com/cw4emeryville/status/1438862784024891394
- inglor_cz 5y ago
  Remarkably, Austrian capital Vienna manages to keep a good municipal stock of affordable housing. But other cities failed to imitate Viennese methods. Also, Berlin has a lot of land that could be built upon. Land is not a scarce resource in that particular corner of Europe.
  - Sebb767 5y ago
    Berlin itself is quite full (with the exception of the airport park, which is intentionally kept as a green area). There is a lot of cheap land available in Germany, especially in the countryside on the east, but near the city the situation is different.
    - inglor_cz 5y ago
      Looking now at Berlin from the bird's perspective, Tegel airport could probably be redeveloped now that the new airport is in operation. Also, existing land use could see some improvements. Does it make sense to have a huge solar electricity park like this: https://mapy.cz/s/pohetunuzu https://mapy.cz/s/pohetunuzu in the middle of a city with a shortage of housing? That is 150 x 500 m piece of land where at least 5 thousand people could live comfortably even without a need for high-rises. (6 story houses or so). In a walking distance from an existing U-bahn station. (Not to mention the other factories around.) There is a discussion in Prague about moving some big shopping centers from the wider center to the outskirts and using the freed land for construction. But everything takes long in our state of bureaucracy.

qeternity 5y ago

As another commenter notes, housing is unaffordable because marginal demand is greater than marginal supply. We can either decrease demand, or increase supply. Housing demand is pretty sticky, so that leaves us with one option.

mupuff1234 5y ago
Only if you think that the demand for real estate is mostly driven by housing needs, and not speculation & monopoly style hoarding artificially driving prices higher.
- deleted 5y ago
  [deleted]
- qeternity 5y ago
  Without a doubt, it is not mostly driven by those things. Investors have lots of choice about what to invest in. People don’t have any choice about needing shelter. They will pay whatever the price is. I get that wealthy investors driving up housing prices gets people angry and is a good rallying cry. But it’s such a small piece of demand.
  - mupuff1234 5y ago
    Define small? Even an additional 2-3% increase in supply can have quite a large affect on prices. For example, pre-covid, there was a vast number of vacant apartments in NYC. https://www.6sqft.com/nearly-250000-nyc-rental-apartments-sit-vacant/ https://www.6sqft.com/nearly-250000-nyc-rental-apartments-si... But also being in NYC during COVID and watching the real estate market react, it feels far from an efficient market, as one side has more information, resources and time. https://www.businessinsider.com/new-york-city-rent-deals-landlords-holding-apartments-2021-3 https://www.businessinsider.com/new-york-city-rent-deals-lan...
djrobstep 5y ago
Please stop saying this - house prices in Australia have recorded record growth in the same year as record low immigration due to covid restrictions. The primary driver is low interest rates enabling cheap debt, not "supply".

linuxftw 5y ago

Socialized housing only creates slums. Tenants have no incentive to keep the place nice, government rationing of maintenance ensures they degrade faster than the government is willing to spend to keep them functioning. Anyone that can afford better moves out. Eventually (not that long), only destitute remain.

FredPret 5y ago
This, 100%. Then a new generation grows up in said slum with its attendant effects on their development and the cycle worsens
- kebos 5y ago
  I'll take social housing over the homeless problem you get in countries without large social housing stock 100x. Maybe some % of people just aren't going to break the cycle. I'd still rather they aren't homeless and causing decay on the streets.
- nicoffeine 5y ago
  That's why Vienna mixes subsidized housing and regular housing, often in the same building. They also allow families to stay in their housing or purchase it as long as they pay the higher rate related to their rising income.[1] The problem in the US is that there is no gray area for subsidized housing. As soon as you hit some magic number, you lose all of your benefits. The people who game the system to stay under this number are not stupid, but acting rationally because they know their new job may not stick around. They would rather have housing security than take a chance at losing everything and living in the street until their tax return shows that they are poor again. [1] https://www.newstatesman.com/spotlight/2019/09/housing-basic-human-right-vienna-model-social-housing https://www.newstatesman.com/spotlight/2019/09/housing-basic...
nicbou 5y ago
Berlin has a few city-owned housing companies [1] that provide above average service. You'd be much happier with DeGeWo than with Akelius. [1] https://allaboutberlin.com/guides/find-a-flat-in-berlin#housing-companies https://allaboutberlin.com/guides/find-a-flat-in-berlin#hous...

aomobile 5y ago

Didn’t they sell government housing before? Anyway this is probably a bad idea as governments are bad landlords and taxpayers will get the bill eventually

oreilles 5y ago
Except contrary to any other landlord, the government doesn't expect to earn money but to have a balanced budget. This is why medical expanses are much higher in the US than in any European country. This is why all basic necessities should be controlled by the government. Water, roads, internet, housing.
- deleted 5y ago
  [deleted]
- notanzaiiswear 5y ago
  Medical staff in the US also has much better pay than in European countries with a socialist health care system. And if you are insured, the costs don't matter that much.
  - msrenee 5y ago
    Oh yes they do. I've got "good" insurance and have such fun when I get a surprise bill for $150 for talking to a specialist for 15 minutes when I thought it would be a $25 copay under my plan. Costs a couple grand if I end up in the hospital. $25 every time I see a doctor. That adds up when it takes 4 visits over 2 weeks to figure out what the problem is and what medication I need. And the insurance itself isn't cheap.
    - notanzaiiswear 5y ago
      Why don't you know the costs upfront? "Socialist insurance" doesn't automatically cover everything you want or need, by the way. Rather, there is a government mandated list of things that are covered. There are presumably different types of private insurances, sometimes it makes sense to agree on "self pay" for small amounts, sometimes it doesn't. Also if "socialist insurance" would cover your 15 minute talk, you would never know it cost 150$. You would just wonder after a while why the health care system always seems to be on the brink of collapse.

fallingfrog 5y ago

A lot of people are saying that housing supply needs to go up to resolve the problem. This is essentially correct! But the market is not doing it, so government intervention is reasonable. The government should buy land, construct a whole bunch of high quality housing on it, then rent it at below market rates. Rents in the rest of the city will collapse downward to compete. Problem solved. This is the same tactic that the us government used to make electricity cheap in the 1930’s with the construction of the grand coulee dam. Edit: Look: governments all over the world are willing to plow unlimited amounts of money into the stock market when rich people are in trouble. But when young people just starting out can’t get an affordable apartment, somehow nothing can be done. Let’s get real. This is a matter of priorities.

luckylion 5y ago
> The government should buy land, construct a whole bunch of high quality housing on it, then rent it at below market rates. They can't, because they'd need to zone that land for housing use (a different part of the government is responsible and won't do it) and they'd have to relax the regulations for building houses to make it cheaper (another different part of the government is responsible and won't do it). You can't spend your budget on subsidized housing if you also want schools, infrastructure and low tax rates.
- fallingfrog 5y ago
  Low tax rates for existing landowners are not the goal here; low rents for young people are what you want. One makes the city grow and thrive, the other just allows old or rich people to have big piles of money. I said high quality housing, not crappy housing. No need to relax regulations or fiddle with zoning.
  - luckylion 5y ago
    No, I meant tax rates in general. Berlin levies lower business taxes compared to other German cities, complains that it has less tax income and gets subsidized by the other German states while still complaining about being poor. It's an act, they could just raise taxes, but prefer not to. > I said high quality housing, not crappy housing. Okay, so what services should be cut to pay for high quality housing and then rent it out below cost? Schools? Fire fighters? Social programs? And since zoning should not be a concern, do they just build over parks?

yunohn 5y ago

Not sure how much of a real change this will make, but man, what a bad deal for taxpayers. They shouldn’t have allowed rampant corporate ownership in the first place, but now they’re going and spending public money on overpriced real estate.

secondcoming 5y ago
This is happening now in the UK. Lloyds bank [0] and John Lewis [1], a retailer, are both planning to tap into this revenue stream. [0] https://www.theguardian.com/business/2021/aug/19/lloyds-plans-big-move-into-uk-rental-market-with-50000-homes https://www.theguardian.com/business/2021/aug/19/lloyds-plan... [1] https://www.theguardian.com/business/2021/jul/04/john-lewis-plans-to-build-10000-rental-homes-on-its-land-waitrose https://www.theguardian.com/business/2021/jul/04/john-lewis-...
- dazc 5y ago
  I am all for big businesses moving into buy to rent. There are far too many amatuer landlords in the UK making a living by renting out poor quality housing. My office landlord also has two small flats above (think glorified bedsits) and his partner also rents out a tiny cottage. This is their living (aprox. £3k a month), neither works or has any other business, all from a 'portfolio' of properties that maybe cost £150k twelve to fifteen years ago. As an example of market inefficiency, multiply this across the country and it's not hard to argue that the housing market is severely broken.
  - Ekaros 5y ago
    I too have no issues with large business getting involved with rentals. As long as it is clear for everyone involved that housing should be low margin business. That is very low, but relatively safe returns and mostly not from appreciation of assets.
  - bjackman 5y ago
    A lot of comments in this thread about corporate buy-to-let seem reasonable, but only under the nihilistic assumption that prices cannot fall and home ownership must be perennially out of reach for the median earner. What about instead of shifting from private parasitic landlords to corporate parasitic landlords, we just let people buy the homes they live in (by enacting one of many possible policies to limit the profitability of BTL and thus reduce competition for homebuyers)? It just doesn't seem to make any sense to try and apply free market principles to housing. There's absolutely no benefit.

nkmnz 5y ago

For everyone not familiar with German rental markets: Berlin is quite cheap compared to other big and small cities. From cities as big as Munich to smaller ones like Mainz, most cities are more expensive (except for those in the former GDR). Cheap(er) rents are part of the reason why people move to Berlin - the more the Senate does to control rent, the more people will want to move to Berlin. The only way is to increase supply - or rebuild the wall ;-)

Tenoke 5y ago
It's gotten way closer than even 5 years ago. I 'overpay' as an ex-pat in Berlin but my rent is within 10% of the average Munich rent (unless it's risen there recently as well) for a comparable place.
- nkmnz 5y ago
  Interesting. I guess it’s a more high end rental? I don’t know the High end markets in both places that well, but I know it’s much more expensive for students and others with low income to live in Munich (which has risen recently, indeed) than it is in Berlin. But the gap might be closing nevertheless.
  - skohan 5y ago
    It wouldn't have to be. Finding a flat is extremely competitive in Berlin, so it's not uncommon for agencies and unscrupulous landlords to take advantage of "Auslanders" who might not be aware of rent control laws. When the rents were temporarily lowered to the "fair rate" during corona, and everyone could see what they should be paying, this was eye-opening for a lot of my friends.
    - nkmnz 5y ago
      What do you mean by "fair rate during corona"? The local government broke the federal constitution by limiting rents in a way it has no jurisdiction for. We should be very happy that our constitutional court prevented further unlawful behaviour.

ArmandGrillet 5y ago

Instead of buying what they sold two decades ago for practically nothing, they should have built more supply. Open Google Maps and check Kreuzberg, a district of Berlin. South of it is Tempelhofer Feld, 355 hectares (a third of Kreuzberg), a discontinued airport next to the city only used for people to bike and do barbecues. It's an old airport so it looks bland and there are smaller parks right next to it offering the space to do barbecues and play with your dog. It's been a decade that this airport is not being used yet it's still in that state. Paris' housing crisis is mostly due to the road surrounding it (le Périph') but Berlin doest not have that yet housing is getting more expensive extremely fast, faster than in Paris actually.

nicbou 5y ago
Tempelhofer Feld is a green space where people can meet, exercise, and enjoy their free time without being expected to spend money. Berlin's green spaces is one of its strongest assets. Don't let that city turn into a concrete hell. I'd much rather see Kleingarten disappear than public spaces.
- notanzaiiswear 5y ago
  They wanted to build just on a small stripe on the side of it, it is not as if they would have to fill the whole place with houses. But even that was shot down via "Volksentscheid".
  - probably_wrong 5y ago
    I think the referendum against building in Tempelhof saw right through the project and understood what its end goal would have been: it would have created apartments that those being priced out of Berlin wouldn't have been able to afford. The losses would be socialized (namely, the park) while the benefits would go to the wealthy. For those unfamiliar with the situation I found this article [1] which, biased as it is, I think accurately reflects the opinion of the common Berliner at the time. If the plan had proposed 100% social housing, I bet the story would have been different. [1] https://www.exberliner.com/features/opinion/everyone-is-lying-to-you-about-tempelhofer-feld/ https://www.exberliner.com/features/opinion/everyone-is-lyin...

deleted 5y ago

[deleted]

nicoffeine 5y ago

Posted in another thread, but there is a very interesting theory about why Germany has stable housing prices compared to other nations. This funding model may also explain why local municipalities are against multi-family housing, which is driving sprawl and unwalkable zoning policy in the US. 'Local German officials, like local leaders everywhere, seek bigger budgets to provide more and better services to their constituents. What’s different about Germany is that the way to get bigger budgets is to increase local populations. And, as Professor Buettner says, “Ultimately, to get people, municipalities will need to support housing.” The result is a system of incentives that is the opposite of “fiscal zoning”—the US practice of zoning land in ways that maximize local governments’ income and minimize their costs. In places with high sales taxes, such as Washington State, leaders zone more land for shopping centers. In places where residential property taxes are capped, such as California, they zone less land for homes and more for offices. In affluent suburbs, they often zone land for houses on large lots, excluding low-income people. Maximizing property values is such a central concern of local government in the United States that Dartmouth economist William Fischel developed the notion into an entire political theory. His “homevoter hypothesis” holds that local governments are almost single-mindedly focused on maximizing real estate values, because homeowners typically vote their home values in local elections. German jurisdictions gain financially by maximizing population, not house values, and because renters outnumber homeowners in the country, homevoters are not the dominant electoral force in local German elections. Renters are.' https://www.sightline.org/2021/05/27/yes-other-countries-do-housing-better-case-2-germany/ https://www.sightline.org/2021/05/27/yes-other-countries-do-...

sagarm 5y ago
I'm very confused: if you want to have more residents in your city with a fixed amount of land, then you need multifamily housing. Walkability is also associated with density and benefits from multi-family and mixed use zoning.

fnord77 5y ago

SF is looking into buying unsold luxury condos from developers.

no_butterscotch 5y ago
To put homeless in?
- fnord77 5y ago
  yes

refurb 5y ago

I recall on rule of fixing a market problem is to apply the most direct fix possible. The government would be better off just giving money directly to renters to pay their rent. This has the added benefit that the cost of subsidy of very transparent and it provides a nice incentive to increase housing supply.

axiosgunnar 5y ago
I, as a taxpayer, refuse to finance a few lucky grandfathered-in people that want to live in a highly sought-after district but cannot afford the rent. There is no human right to an apartment in the city center of a megapolis.
- refurb 5y ago
  But it’s no different than your tax dollars buying housing from private entities or building public housing and charging lower than market rent. It’s all dollars out of your pocket.
dredmorbius 5y ago
Land is an inelastic good. "Buy land. They ain't makin' any more of the stuff." -- Will Rogers In economics, rents are goods or services whose supply is inelastic (doesn't increase when demand increases), so that any increase in demand simply results in a rise in price. Another way of looking at this is that all surplus value of that service is appropriated by the seller. This contrasts to normal commodity goods in which price tends to fall to the cost of provisioning. Note that wages generally behave this way as well, with the result that unskilled workers (lacking any wage premium) in a rents-based world are squeezed between wages which deny them all surplus value of labour and rents which appropriate all surplus value of housing. Any increase in wages is immediately met by a corresponding increase in rents. Your proposal of a direct rent subsidy is the equivalent of a wage increase. You'll pay it to the workers, who'll in turn pass it on directly to the landlords. Counterintuitively: if you want to lower the cost of housing, tax the unimproved value of land. Where regulation allows for increased utilisation density, the result is that the tax (as with the wage increase) is passed on to landlords. It effectively takes up the surplus value of housing, and appropriates it for public expenditure. Landlord profits are reduced. Landlords can increase profits by increasing the real estate units available --- by building more units on the same land. This means one or more of less unbuilt land per property (setbacks and easements), smaller units (more people in a given space), or more floors. Building two storeys rather than one doubles the available real estate. Building up 5 or 10 storeys increases land by a factor of 5 or 10. (It's not necessary to build cloud-scraping towers, even modest increases in height limits will greatly increase housing densities.) Housing is a good for which increasing taxes, if done correctly, INCREASES supply. Highly counterintuitive, but true. https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax

lifeisstillgood 5y ago

The housing market is complex, but one point I would like to make, is that if there is now a (global?) opportunity to borrow capital, buy houses on a mass scale and rent them out, that implies to me that there is a failure in mortgage market - families want housing in a location, it is possible to borrow money and buy them, but those families don't have access to that monet. This implies a) inequality in wealth and incomes b) failure to change mortgage market to account for higher risk in harder to reach areas (this is what savings and loans were literally made for) c) errr d) that's it.

IkmoIkmo 5y ago
> The housing market is complex, but one point I would like to make, is that if there is now a (global?) opportunity to borrow capital, buy houses on a mass scale and rent them out, that implies to me that there is a failure in mortgage market - families want housing in a location, it is possible to borrow money and buy them, but those families don't have access to that monet. Not sure I see the issue. Renting and owning has very different risk profiles, which is why you'll find people can rent a place they're unable to buy. The risks are with loss of income, e.g. due to job loss, sickness etc. Such things are somewhat inevitable in the span of a 30y mortgage. In such a situation the tenant can move to more appropriate alternative housing, e.g. moving to a smaller home, a home that's not as well located, sharing a home with others, friends, family etc. In the case of an owner it gets trickier, typically the person would eventually be forced to sell the house to be released from the contractual obligations to pay the mortgage. The risk events' probabilities correlate, i.e. you're more likely to lose your job in an economic downturn, as does everyone else, which means home prices are more likely to be low during an economic downturn, meaning a forced-sale during such times can mean you're selling your home for less than the value of the loan, leaving you not only out of income, out of a home, but also with a sizeable debt. In other words, there can be reasonable explanations for why a government could buy homes and rent them out to tenants who can afford the rent, while those same tenants could not afford an equivalent mortgage. Second, I think it'd be very sensible to assume that the government is not going to be renting out these units at market rate. In other words, they're subsidising the tenants, with taxpayer money. That's why the rent would be affordable, but the purchase would not, for the tenants. If anything that implies this decision is lowering the effects of inequalities, due to in-effect a redistribution of wealth from rich to poor.

kartoshechka 5y ago

SyntaxError: JSON.parse: unexpected character at line 1 column 1 of the JSON data ayyy spa for a static content site

b0ner_t0ner 5y ago
Source is HTML, but came back as JSON MIME type. Something in their memcached borked.

dathinab 5y ago

A lot of people say that "more houses need to be build" to fix it. The problem is less "not having apartments" but "not having affordable apartments". A a lot of "housing" had been build in the recent years but hardly any of it increased the "supply of affordable housing". Most had been very expensive "luxurious"(1) living spaces, from small one family houses to large "luxus" apartments. At the same time a lot of affordable living space has been converted into non affordable ones or removed from the rental marked. Reasons for this are many fold and include: - Prices in Berlin had been unrealistic low, so once they started rising/people realized it they rose fast attracting a lot of speculative investments, speeding up the price rise and level above what it should have been. - Stupid formulated laws around "energy" renovations turned out to be a perfect backdoor to circumvent existing limitations about how much rent can rise, especially if combined with little continues wide spread Illegal acting allowed massively bumping prices in short time. - Certain tax changes done ~7 or so years ago increased renovation cost massively, and the price boom and building (of non affordable housing) boom made it hard to build/renovate affordable housing for people just owning a small number of apartments). - Also maybe thinks like Aribnb had a bad effect, but I can't judge this. So what should be changed IMHO: 1. Change the energy renovation law to not be trivially abusable. 2. Make regulations which favor affordable rentable living space over all other versions (also favor it over office space). 3. Change certain laws about tax handling of losses from "rent", i.e. there are people which but absurd prices on apartments with the intent of them to not ever be rented because they bought them for speculative investments and selling a unrelated one is easier/better. If a apartment is in a area with a deficit of (affordable) living space you should not be able to tax-deduct losses because you werent able to rent out an apartment. (Similar the kind of "buy to sell at a higher price later" behaviour should be illegal.). 4. Add a legal method the state can use to punish organizations which en-mass do a lot of systematic small illegal things which each on themself are not worth opening up a law suite and affect a different person, like systematically trying to increase rents slightly more then average every time. 5. Maybe (idk, only if it matter) auto-sync databases of platforms like Airbnb with residential databases to auto detect abuse. 6. Undo mistakes of the past where Berlin reduced affordable housing programs. (1): Price wise, not necessarily quality wise.

game_the0ry 5y ago

Former real estate investment professional here. This is likely a bad deal for the German taxpayer and a great deal for the corporate landlords. Essentially, the Berlin gov has given the corporate landlords a profitable exit for their investments. The corp landlords, seeing the writing on the wall and fearing lower rents, unrest among tenants, and diminishing exit opportunities via selling to the market (which wont want to deal with the risks) can now exit by selling to the government. The German / Berlin gov gets an investment that is all but guaranteed to be a loss assuming they drop the rents for the tenants. Thus, tax payer eats the loss. I see something similar playing out in the US, and not just for corp landlords - it could happen to baby boomers looking to sell their homes upon retirement. During the last housing crisis in '08, Alan Greenspan and Warren Buffet suggested buying homes and destroying them, effectively lowering the housing supply in order keep prices at the same level in a market with lower demand [1]. Key takeaway from all this - governments and the folks that influence them (who also own and get their primary income from assets) wont let asset prices go down. They would rather destroy assets and lower supply to protect price levels. This dynamic teed-up a political war between those who own assets vs those who do not, young vs old, establishment vs anti-establishment, etc. I feel for tenants - I am one myself. However, better to let the market to clear market inefficiencies. [1] https://www.fool.com/investing/general/2011/10/06/creative-destruction-in-the-housing-market.aspx https://www.fool.com/investing/general/2011/10/06/creative-d...

markenqualitaet 5y ago
Maybe more complex. Legally, you cannot increase rents above 10% of the respective average here. If Berlin-owned rents aren't increasing, this will slow down the whole market. Now, this depends a lot on how the law will be enforced in the future.

richwater 5y ago

Anyone who thinks you can take this model and apply it to America, with all the evidence we have of horrific public projects, is quite literally insane.

Leparamour 5y ago

I'm a bit surprised. I thought the referendum over this wasn't due for another week, since there will be general and state elections next sunday. This looks like a hail mary move before elections could have switched up majorities and brought a change in administration. As a born-Berliner I'm highly critical of this populist move, that was mainly organized by transplants who demand stuff for free all the time: UBI AND open borders. Unfazed by the fact that somebody will have to foot the bill for socialist cloud castles eventually. These people will move back to their hometowns when they have made the living situation in Berlin become untenable, for me it's my home and where all of my family lives.

markenqualitaet 5y ago
The above comment is propaganda. I doubt the person is from Berlin or lives there still. The Deutsche Wohnen Enteignung campaign has broad and diverse support across the population. This was actually proven in an investigation for possible "radical left" influences, suggested by the conservative opposition.
- Leparamour 5y ago
  >The above comment is propaganda. I doubt the person is from Berlin or lives there still. Haha, what? I should probably be grateful you didn't outright call me a Nazi or something. If you're in fact involved with the campaign feel free to ask around where your fellow people are from originally. How about you? Real Berliner? Or do you move back if Berlin doesn't pan out for you? For instance, I haven't met a single signature collector that was native to Berlin and boy have I been engaging them in discussion when I ran into them every day while commuting between Neukölln and Friedrichshain. >The Deutsche Wohnen Enteignung campaign has broad and diverse support across the population. This is actual propaganda. >This was actually proven in an investigation for possible "radical left" influences Explain this then: https://interventionistische-linke.org/beitrag/unterstutzt-mit-uns-deutsche-wohnen-co-enteignen https://interventionistische-linke.org/beitrag/unterstutzt-m...
  - markenqualitaet 5y ago

acd 5y ago

Corporate landlords are speculating on housing with central bank artificial lowered interest rates. Its also maybe not in accordance with UN human rights article 17. "Everyone has the right to own property alone as well as in association with others." If a corporation owns the property and you have to rent then it may not be in compliance with article 17. https://www.un.org/en/about-us/universal-declaration-of-human-rights https://www.un.org/en/about-us/universal-declaration-of-huma...

dragonwriter 5y ago
> If a corporation owns the property and you have to rent then it may not be in compliance with article 17. A corporation is a vehicle for owning property in association, so denying it the right to use itd assets to acquire property would arguably violate Article 17, as would not permitting such associative ownership vehicles. The right to own property doesn't imply the means to individually afford the particular quantity, class, or specific item of property you desire, only the freedom to use the resources you have to acquire property. EDIT: OTOH, if the market conditions the government allows to persist make adequate housing (not necessarily ownership) unaffordable, after whatever social support is provided and considering the cost of other necessities, it is a violation of Section 1 of Article 25. “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.”

Bombthecat 5y ago

And in ten years, Berlin will sell them back for cheap to another firm...

madballster 5y ago

Every taxpayer in Berlin is basically subsidizing these state owned apartments which are rented out at below market rates.

nkmnz 5y ago

treasure trove of data about the berlin housing market: https://guthmann.estate/de/marktreport/berlin/ https://guthmann.estate/de/marktreport/berlin/

einpoklum 5y ago

Why buy rather than expropriate? Berlin has lots of people with no apartments, and the commercial corporations have apartments without permanent residents. Instead, Berlin is funneling ~200K EUR of public funds x 14,750 to partially rectify an allocation anomaly of Capitalism. (If you're against expropriation - it could just be a massively high tax on apartments owned besides the one you physically live in; or a strong de-criminalization of squatting of such apartments, including allowing for registering as the resident based on actual residence etc.)

hikerclimber1 5y ago

Everything is subjective. Especially laws

dredmorbius 5y ago

For those wondering what drives real estate prices, there's a look at the most expensive ZIP code in the US, 95027, a/k/a Atherton, CA: The town’s ascendance stems largely from its single-family zoning, 1-acre-minimum lot sizes, flat land, streamlined permits and changing buyer demographics — which have translated into soaring house sizes and skyrocketing prices. https://www.sfchronicle.com/business/networth/article/Here-s-how-Atherton-became-the-Bay-Area-s-14188989.php https://www.sfchronicle.com/business/networth/article/Here-s... If you want abundant, affordable housing, invert at least those first two conditions: - Multi-family zoning - Small lot sizes Flat land and streamlined permits for denser housing will also help. Mostly, though, you've got to build. And tax land values to keep that from appreciating with no end.