5 ms·

This is exactly the kind of solution I favor in the states. Buy up properties, build or expanding housing supply, and then either continue to subsidize it or s

by kiba 5y ago

This is exactly the kind of solution I favor in the states. Buy up properties, build or expanding housing supply, and then either continue to subsidize it or sell it back to the market while imposing land value tax. Why? Because the problem is lack of political will. You can't expand housing supply if nobody wants to. It's a piecemeal solution until we figure out something better or that society is willing to support public housing initiative. Otherwise, we would be waiting forever for entrenched political opposition to die or the situation to worsen over time.

notanzaiiswear 5y ago
Or, you could simply allow private entities to build housing. I am sure especially in those "hot" areas where prices are spiralling out of control, there is no shortage of entities with the "will" to build. That is usually the point behind markets, rising prices give an incentive to increase supply.
- yunohn 5y ago
  There’s always real estate developers willing to build. The problem is that they never want to build affordable housing, only massively profitable housing. Also, an underlying problem is usually lack of land - a limited resource by nature.
  - ryan93 5y ago
    If they build luxury apts rich people take those freeing up crappier apts for middle income people and so on. Silicon valley millionaires dont want to spend 2.5 million on shitty 50yr old homes, but they cant get new ones built
    - yunohn 5y ago
      Thanks for this non-insightful comment and derailing a post about Berlin into yet another SV rant.
- awild 5y ago
  Berlin has been a hot market for a long time, what's been built has been a lot of very expensive apartments. There is actually some leerstand but they are luxury apartments without renters. The biggest thing the market has achieved in Berlin is allowing landlords to rent out shitty apartments at abhorrent prices (25sqm at 600€) without incentive to actually provide good services for the renters
  - asdfasgasdgasdg 5y ago
    It would surprise me if Berlin is permissive with respect to permitting new housing. It would be quite unique among desirable western cities if it did. When the amount of new housing allowed is insufficient to keep up with growth in demand, obviously developers are going to tackle the most lucrative segment of the market, since they can essentially pick their buyers. If there were ten people who want new cars but you have one import permit, and your cut is 10%, are you going to import the luxury car or the econobox?
    - awild 5y ago
      I agree and that's why I think the problem cannot be solved in private hands but with communal ownership.
      - asdfasgasdgasdg 5y ago
        If you permit enough new housing to satisfy demand, that would also solve the problem. As long as insufficient new housing is being built, prices will go up on market rate housing. The lucky few who manage to get into price controlled housing will have better prices, but everyone else will face higher costs or be unable to live in a region entirely. One thing is for sure: as long as any private housing ownership is allowed, rich people aren't going to be the ones left high and dry.
        awild 5y ago
        The amount of new apts would be dramatically high to curb prices and make them realistic again. And Berlin is probably also not able to magically create as much new living space as is needed in that short of a time frame especially given the developers unwillingness to build affordable housing. I think where we probably fundamentally don't agree is that not all things need to be provided through a market. (or I think my point is more so that we've at least observed it not reall working here, so we could at least try a different strategy or multitudes and see how far those take us)
- Jenk 5y ago
  > you could simply allow private entities to build housing. London is the poster boy for exactly why you don't do this. The result is builders and landlords buying up land, "delaying" (often indefinitely) building the homes to artificially drive up the prices of existing housing, or building tiny, tiny, apartments in huge hive-like blocks and towers, with insane prices.
  - dnissley 5y ago
    Nobody lives there anymore. It's too expensive.
- blub 5y ago
  The prices are spiraling out of control everywhere that’s even moderately desirable. In a city in the BW part of Germany which has ~20k inhabitants and is nearby another city with ~200k inhabitants there’s new 3 room apartments for sale for around 400.000+ €. The sales prices in BW and many other areas of Germany are simply ridiculous. And they are building: a few dozen lots are being offered by the city and there’s dozens of takers per lot.
  - axiosgunnar 5y ago
    Then they are not allowing to build enough if there are dozens per lot?
    - blub 5y ago
      Which city can easily add thousands of parcels of land for building houses? There’s significant administrative effort and those extra houses would put pressure on all local municipal services. This has to be thought out and done incrementally.
- kiba 5y ago
  You need to realign incentives. You can't do that now if homeowners and investors don't want to allow housing. Resetting taxes to LVT means that improvements on land won't be disincentivized. Buying them out means they get a lot of cash and won't be so opposed to you lowering the value of their owned property. Also, the government will be able to afford to focus on cheap housing, not what makes them the most money, since their focus isn't private profit.
- fnord77 5y ago
  in SF, the wholesale cost for building a unit is $800-900k. private entities will only build luxury housing in these conditions
  - foepys 5y ago
    This is one of the reasons why all new housing is in the luxury category in Germany as well. Building codes have become so strict that it's not worthwhile to build affordable housing for private investors. Especially since the government pays incentives (or rather gives out very low interest loans) to build houses of the highest energy standard. Why build a "cheap" house when you can build a more expensive house with subsidies that has a lot higher resale value later?
    - kiba 5y ago
      Why are building code so strict? Are they 'necessary'? How much benefit do these building codes provide?
      - inglor_cz 5y ago
        Note that there is a lot of lobbying involved in the building code. An example: What if a kid ran into a balcony glass and broke it, hurting or killing itself? Better demand that balcony glass be reinforced (and more expensive, to a great delight of the glass factories!) just in case. Even in old folks' homes. No one wants to be known as the child killer, so here is a new demand making the construction a bit more expensive.
        shkkmo 5y ago
        That seems perfectly reasonable to me. I expect balcony railings to be sturdy, they exist precisely to prevent accidents. As long as there is no regulation mandating railings be made of glass, I don't see any problem. I've only ever seen glass railings on the houses of people who can afford to pay someone else to clean them (i.e luxury housing) so I don't see how that makes it harder to build affordable housing.
- RicoElectrico 5y ago
  If you give real estate developers too much of a free hand, they will plaster over every bit of common space with cramped flats or other abominations. There's even a word for it in Polish - "patodeweloperka". It's most prominent in Cracow (alleged ties of real estate companies with local officials), also in Warsaw and its suburbs. In Gdańsk, it's suspected that many old unused buildings in attractive areas had an "accidental" fire.
  - inglor_cz 5y ago
    I looked at some of the new construction in Wroclaw (arguably not Cracow) and it seemed fine to me. If I could sustain my work from abroad, I would be tempted to move to Wroclaw, actually. Unfortunately I need access to cheap shipping to Czechia, which means being in Czechia or at least going there pretty often.
    - gregorygoc 5y ago
      Define “fine”. People want to start the family, but private real estate developers build shitload 40m^2, 1 bedroom flats (as they’re the most profitable). I’d argue the current housing market is definitely not “fine” for them.
fighterpilot 5y ago
Why not just let private developers build apartments. They have the capital, know-how and will to do it. All that needs to happen is government and councils getting out of their way with zoning restrictions and the problem will fix itself as if by magic. I agree on the land value tax part of what you said, though.
- kiba 5y ago
  The problem is not government and councils but all the homeowners who don't want any development. Buying them out incrementally is hopefully a way to remove political opposition.
  - fighterpilot 5y ago
    The problem is councils and governments that are controlled by homeowners who vote in NIMBY restrictions. The reason there aren't apartments going up everywhere is that it's literally illegal to do it, not that a developer is finding it difficult to find eight adjacent single detached homes to buy up in one go.
- robert_foss 5y ago
  There's nothing preventing them from building now, yet they are not. What would incentivize the building of low or medium income housing, when higher profits can be made from high income housing.
  - fighterpilot 5y ago
    The BauNVO stipulates restrictions on building height and on floor area relative to land area. Are you sure it's legal to build a 30-storey apartment in a residential zoned area in Berlin without needing to get some special exemption or permit? In the US and many other countries, the reason is definitely local government restrictions. Developers would love to build more high-rise apartments - it's very profitable to them - but they're not allowed to in many areas. In the area I'm living in, it is illegal to do it. The incentive picture is not as you're portraying, and we can look to other industries for counter examples. If there's profit to make, the market will fill those shoes, even if there's "more profit" (which I don't agree is the case always due to volume) serving wealthier customers. Consider the market for low-margin cheap restaurants in poor areas, and the market for high-end dining in rich areas. These are both very well served markets. The market will almost always find profits where they're to be had, especially in an industry like real estate development.
asdfasgasdgasdg 5y ago
Maybe this is just me being a filthy capitalist, but it also seems somewhat fair? If cities are instituting rent controls on properties that were previously market rate, that is a targeted form of wealth expropriation. To be clear, I'm not one of these "taxes are theft" people -- we do have to pay shared costs. But there's a continuum of acceptability: it would clearly be wrong to pass a law that raises taxes on one person by name. And it's clearly ok to raise taxes on everyone. For me, instituting rent controls is towards the less acceptable end of this spectrum. If the city believes it ought to be able to set prices on an apartment, it should own that apartment first. Just my unenlightened gut feeling on this issue.
- yunohn 5y ago
  > it would clearly be wrong to pass a law that raises taxes on one person by name What do you mean? There are innumerable such taxes, globally. You definitely need to tax various people & businesses differently, it’s the only real solution.
  - asdfasgasdgasdg 5y ago
    I am not aware of any examples where a country taxes a single individual at a higher rate than everyone else by law. If examples are innumerable, I'd be grateful if you could provide one.
    - bombcar 5y ago
      Iirc the first income tax targeted a very small number of individuals- maybe just Rockefeller or something, as nobody else qualified.
      - asdfasgasdgasdg 5y ago
        I believe it, although at least then it's still targeting a class that others might enter. I do also believe that there's a fundamental difference between income taxes and wealth taking in this regard, in that one is retroactive and the other isn't.
notatoad 5y ago
>You can't expand housing supply if nobody wants to. it's wrong to say "nobody" wants to. the problem is that the homeowner class holds all the political power, and so there is no greater political sin than decreasing the cost of housing (or "lowering property values" in homeowner terminology). if anybody cared what non-homeowners thought, there'd be plenty of will to build more housing. as long as so many people's net worth is tied to their housing, there will be no appetite for lowering the cost of housing.

by kiba 5y ago

notanzaiiswear 5y ago

Or, you could simply allow private entities to build housing. I am sure especially in those "hot" areas where prices are spiralling out of control, there is no shortage of entities with the "will" to build. That is usually the point behind markets, rising prices give an incentive to increase supply.

yunohn 5y ago
There’s always real estate developers willing to build. The problem is that they never want to build affordable housing, only massively profitable housing. Also, an underlying problem is usually lack of land - a limited resource by nature.
- ryan93 5y ago
  If they build luxury apts rich people take those freeing up crappier apts for middle income people and so on. Silicon valley millionaires dont want to spend 2.5 million on shitty 50yr old homes, but they cant get new ones built
  - yunohn 5y ago
    Thanks for this non-insightful comment and derailing a post about Berlin into yet another SV rant.
awild 5y ago
Berlin has been a hot market for a long time, what's been built has been a lot of very expensive apartments. There is actually some leerstand but they are luxury apartments without renters. The biggest thing the market has achieved in Berlin is allowing landlords to rent out shitty apartments at abhorrent prices (25sqm at 600€) without incentive to actually provide good services for the renters
- asdfasgasdgasdg 5y ago
  It would surprise me if Berlin is permissive with respect to permitting new housing. It would be quite unique among desirable western cities if it did. When the amount of new housing allowed is insufficient to keep up with growth in demand, obviously developers are going to tackle the most lucrative segment of the market, since they can essentially pick their buyers. If there were ten people who want new cars but you have one import permit, and your cut is 10%, are you going to import the luxury car or the econobox?
  - awild 5y ago
    I agree and that's why I think the problem cannot be solved in private hands but with communal ownership.
    - asdfasgasdgasdg 5y ago
      If you permit enough new housing to satisfy demand, that would also solve the problem. As long as insufficient new housing is being built, prices will go up on market rate housing. The lucky few who manage to get into price controlled housing will have better prices, but everyone else will face higher costs or be unable to live in a region entirely. One thing is for sure: as long as any private housing ownership is allowed, rich people aren't going to be the ones left high and dry.
      - awild 5y ago
        The amount of new apts would be dramatically high to curb prices and make them realistic again. And Berlin is probably also not able to magically create as much new living space as is needed in that short of a time frame especially given the developers unwillingness to build affordable housing. I think where we probably fundamentally don't agree is that not all things need to be provided through a market. (or I think my point is more so that we've at least observed it not reall working here, so we could at least try a different strategy or multitudes and see how far those take us)
Jenk 5y ago
> you could simply allow private entities to build housing. London is the poster boy for exactly why you don't do this. The result is builders and landlords buying up land, "delaying" (often indefinitely) building the homes to artificially drive up the prices of existing housing, or building tiny, tiny, apartments in huge hive-like blocks and towers, with insane prices.
- dnissley 5y ago
  Nobody lives there anymore. It's too expensive.
blub 5y ago
The prices are spiraling out of control everywhere that’s even moderately desirable. In a city in the BW part of Germany which has ~20k inhabitants and is nearby another city with ~200k inhabitants there’s new 3 room apartments for sale for around 400.000+ €. The sales prices in BW and many other areas of Germany are simply ridiculous. And they are building: a few dozen lots are being offered by the city and there’s dozens of takers per lot.
- axiosgunnar 5y ago
  Then they are not allowing to build enough if there are dozens per lot?
  - blub 5y ago
    Which city can easily add thousands of parcels of land for building houses? There’s significant administrative effort and those extra houses would put pressure on all local municipal services. This has to be thought out and done incrementally.
kiba 5y ago
You need to realign incentives. You can't do that now if homeowners and investors don't want to allow housing. Resetting taxes to LVT means that improvements on land won't be disincentivized. Buying them out means they get a lot of cash and won't be so opposed to you lowering the value of their owned property. Also, the government will be able to afford to focus on cheap housing, not what makes them the most money, since their focus isn't private profit.
fnord77 5y ago
in SF, the wholesale cost for building a unit is $800-900k. private entities will only build luxury housing in these conditions
- foepys 5y ago
  This is one of the reasons why all new housing is in the luxury category in Germany as well. Building codes have become so strict that it's not worthwhile to build affordable housing for private investors. Especially since the government pays incentives (or rather gives out very low interest loans) to build houses of the highest energy standard. Why build a "cheap" house when you can build a more expensive house with subsidies that has a lot higher resale value later?
  - kiba 5y ago
    Why are building code so strict? Are they 'necessary'? How much benefit do these building codes provide?
    - inglor_cz 5y ago
      Note that there is a lot of lobbying involved in the building code. An example: What if a kid ran into a balcony glass and broke it, hurting or killing itself? Better demand that balcony glass be reinforced (and more expensive, to a great delight of the glass factories!) just in case. Even in old folks' homes. No one wants to be known as the child killer, so here is a new demand making the construction a bit more expensive.
      - shkkmo 5y ago
        That seems perfectly reasonable to me. I expect balcony railings to be sturdy, they exist precisely to prevent accidents. As long as there is no regulation mandating railings be made of glass, I don't see any problem. I've only ever seen glass railings on the houses of people who can afford to pay someone else to clean them (i.e luxury housing) so I don't see how that makes it harder to build affordable housing.
RicoElectrico 5y ago
If you give real estate developers too much of a free hand, they will plaster over every bit of common space with cramped flats or other abominations. There's even a word for it in Polish - "patodeweloperka". It's most prominent in Cracow (alleged ties of real estate companies with local officials), also in Warsaw and its suburbs. In Gdańsk, it's suspected that many old unused buildings in attractive areas had an "accidental" fire.
- inglor_cz 5y ago
  I looked at some of the new construction in Wroclaw (arguably not Cracow) and it seemed fine to me. If I could sustain my work from abroad, I would be tempted to move to Wroclaw, actually. Unfortunately I need access to cheap shipping to Czechia, which means being in Czechia or at least going there pretty often.
  - gregorygoc 5y ago
    Define “fine”. People want to start the family, but private real estate developers build shitload 40m^2, 1 bedroom flats (as they’re the most profitable). I’d argue the current housing market is definitely not “fine” for them.

fighterpilot 5y ago

Why not just let private developers build apartments. They have the capital, know-how and will to do it. All that needs to happen is government and councils getting out of their way with zoning restrictions and the problem will fix itself as if by magic. I agree on the land value tax part of what you said, though.

kiba 5y ago
The problem is not government and councils but all the homeowners who don't want any development. Buying them out incrementally is hopefully a way to remove political opposition.
- fighterpilot 5y ago
  The problem is councils and governments that are controlled by homeowners who vote in NIMBY restrictions. The reason there aren't apartments going up everywhere is that it's literally illegal to do it, not that a developer is finding it difficult to find eight adjacent single detached homes to buy up in one go.
robert_foss 5y ago
There's nothing preventing them from building now, yet they are not. What would incentivize the building of low or medium income housing, when higher profits can be made from high income housing.
- fighterpilot 5y ago
  The BauNVO stipulates restrictions on building height and on floor area relative to land area. Are you sure it's legal to build a 30-storey apartment in a residential zoned area in Berlin without needing to get some special exemption or permit? In the US and many other countries, the reason is definitely local government restrictions. Developers would love to build more high-rise apartments - it's very profitable to them - but they're not allowed to in many areas. In the area I'm living in, it is illegal to do it. The incentive picture is not as you're portraying, and we can look to other industries for counter examples. If there's profit to make, the market will fill those shoes, even if there's "more profit" (which I don't agree is the case always due to volume) serving wealthier customers. Consider the market for low-margin cheap restaurants in poor areas, and the market for high-end dining in rich areas. These are both very well served markets. The market will almost always find profits where they're to be had, especially in an industry like real estate development.

asdfasgasdgasdg 5y ago

Maybe this is just me being a filthy capitalist, but it also seems somewhat fair? If cities are instituting rent controls on properties that were previously market rate, that is a targeted form of wealth expropriation. To be clear, I'm not one of these "taxes are theft" people -- we do have to pay shared costs. But there's a continuum of acceptability: it would clearly be wrong to pass a law that raises taxes on one person by name. And it's clearly ok to raise taxes on everyone. For me, instituting rent controls is towards the less acceptable end of this spectrum. If the city believes it ought to be able to set prices on an apartment, it should own that apartment first. Just my unenlightened gut feeling on this issue.

yunohn 5y ago
> it would clearly be wrong to pass a law that raises taxes on one person by name What do you mean? There are innumerable such taxes, globally. You definitely need to tax various people & businesses differently, it’s the only real solution.
- asdfasgasdgasdg 5y ago
  I am not aware of any examples where a country taxes a single individual at a higher rate than everyone else by law. If examples are innumerable, I'd be grateful if you could provide one.
  - bombcar 5y ago
    Iirc the first income tax targeted a very small number of individuals- maybe just Rockefeller or something, as nobody else qualified.
    - asdfasgasdgasdg 5y ago
      I believe it, although at least then it's still targeting a class that others might enter. I do also believe that there's a fundamental difference between income taxes and wealth taking in this regard, in that one is retroactive and the other isn't.

notatoad 5y ago

>You can't expand housing supply if nobody wants to. it's wrong to say "nobody" wants to. the problem is that the homeowner class holds all the political power, and so there is no greater political sin than decreasing the cost of housing (or "lowering property values" in homeowner terminology). if anybody cared what non-homeowners thought, there'd be plenty of will to build more housing. as long as so many people's net worth is tied to their housing, there will be no appetite for lowering the cost of housing.