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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

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)
        deleted 5y ago
- notanzaiiswear 5y ago
  The argument of the empty apartments in Berlin comes up all the time, but it is a myth. Maybe in London it is different, for various reasons, but in Berlin, that is not the reason for the issues. [1] Even if only new luxury apartments are being built, it is more housing that takes pressure off the market. The wealthy people can move into those apartments, freeing their old less luxurious apartments for "poorer" people. And there is no "free market" for housing here - it is very difficult to build, with lots of regulations. And who wants to invest, when the government will seize your assets as soon as you are successful? Last year they introduced a hard cap on rents, that applied no matter how much you paid for the house you wanted to rent out, and no matter where it was located. In two weeks, there will be a public vote to seize thousands of flats at "way below market value" (quote from the voting sheet) from corporate landlords. These are not conditions where a "free market" can do its thing. As a matter of fact, only big companies have the means to build under such conditions, it is much too risky for smaller entities. But then, sure, blame the evil capitalists for the issues your socialist government has created. [1] https://www.tagesspiegel.de/berlin/wohnungsnot-leerstand-in-berlin-alles-spekulation/22590984.html https://www.tagesspiegel.de/berlin/wohnungsnot-leerstand-in-...
  - shkkmo 5y ago
    > Even if only new luxury apartments are being built, it is more housing that takes pressure off the market. Luxury housing construction can help, but can't really fix the issue on its own because it is also a relatively inefficient and expensive method of increasing the housing supply (since each added unit has high costs.) This problem is one that a large number of municipalities have failed to solve. It seems very difficult to get the regulatory and tax incentive structure setup just right to get sufficient affordable housing built in large urban areas. > As a matter of fact, only big companies have the means to build under such conditions, it is much too risky for smaller entities. I would think that governments have the scale to take on those risks as well. At some point, I think it makes sense to stop struggling to get privately build affordable housing and do it publicly.
- vonmoltke 5y ago
  How is it that there are "luxury apartments without renters", yet landlords get away with " rent[ing] out shitty apartments at abhorrent prices"? Why don't the people who can afford those shitty apartments move to the empty luxury ones instead?
  - Kliment 5y ago
    Because they're not on the rental market, but are mostly used as a value store by owners that don't live anywhere nearby, and have multiple properties.
    - geitir 5y ago
      Maybe impose a tax on unoccupied apartments past a certain number
      - dredmorbius 5y ago
        A land value tax accomplishes this without the complexities of determining occupancy status or fraud concerning same.
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.

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)
      - deleted 5y ago
notanzaiiswear 5y ago
The argument of the empty apartments in Berlin comes up all the time, but it is a myth. Maybe in London it is different, for various reasons, but in Berlin, that is not the reason for the issues. [1] Even if only new luxury apartments are being built, it is more housing that takes pressure off the market. The wealthy people can move into those apartments, freeing their old less luxurious apartments for "poorer" people. And there is no "free market" for housing here - it is very difficult to build, with lots of regulations. And who wants to invest, when the government will seize your assets as soon as you are successful? Last year they introduced a hard cap on rents, that applied no matter how much you paid for the house you wanted to rent out, and no matter where it was located. In two weeks, there will be a public vote to seize thousands of flats at "way below market value" (quote from the voting sheet) from corporate landlords. These are not conditions where a "free market" can do its thing. As a matter of fact, only big companies have the means to build under such conditions, it is much too risky for smaller entities. But then, sure, blame the evil capitalists for the issues your socialist government has created. [1] https://www.tagesspiegel.de/berlin/wohnungsnot-leerstand-in-berlin-alles-spekulation/22590984.html https://www.tagesspiegel.de/berlin/wohnungsnot-leerstand-in-...
- shkkmo 5y ago
  > Even if only new luxury apartments are being built, it is more housing that takes pressure off the market. Luxury housing construction can help, but can't really fix the issue on its own because it is also a relatively inefficient and expensive method of increasing the housing supply (since each added unit has high costs.) This problem is one that a large number of municipalities have failed to solve. It seems very difficult to get the regulatory and tax incentive structure setup just right to get sufficient affordable housing built in large urban areas. > As a matter of fact, only big companies have the means to build under such conditions, it is much too risky for smaller entities. I would think that governments have the scale to take on those risks as well. At some point, I think it makes sense to stop struggling to get privately build affordable housing and do it publicly.
vonmoltke 5y ago
How is it that there are "luxury apartments without renters", yet landlords get away with " rent[ing] out shitty apartments at abhorrent prices"? Why don't the people who can afford those shitty apartments move to the empty luxury ones instead?
- Kliment 5y ago
  Because they're not on the rental market, but are mostly used as a value store by owners that don't live anywhere nearby, and have multiple properties.
  - geitir 5y ago
    Maybe impose a tax on unoccupied apartments past a certain number
    - dredmorbius 5y ago
      A land value tax accomplishes this without the complexities of determining occupancy status or fraud concerning same.

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.