4 ms·

But it's also a symbolic value, that something is fundamentally changing. 15000 apartments isn't that much for Berlin but a billion is. Of course more apartmen

But it's also a symbolic value, that something is fundamentally changing. 15000 apartments isn't that much for Berlin but a billion is. Of course more apartments are needed and Berlin needs to grow in height and diameter. But also there is no point in landlords hardly putting any efforts in to keep apartments in good shape. Needed repairs and modern upgrades are labeled as luxury renovations which is just a total distortion of reality. At the same time there are small, non-corporate landlords which put in more effort, are more approachable but who in reality invested in a casino-like asset. IMHO real-estate makes only sense for institutional investors, private or governmental because any single error can be financially disastrous and needs to be averaged out. That's why I backed the bill but I hope everyone is working towards something better...

pas 5y ago
If these corporations don't keep their end of the bargain (ie. they don't maintain the buildings), then sue them and/or fine them. No need to buy them out.
- blablabla123 5y ago
  Sure, but it's more than frustrating to go to a lawyer for a service you are supposed to just get, even if you can get free consulting through an insurance. That's why most people don't jump through those hoops and work-around it themselves. (I.e. do nothing usually which is bad for both parties) Also there has been a general official agreement so far that modernizations justify higher rents. Which is just nuts because why would a one-time investment justify a basically indefinitely going increased rent...
  - pas 5y ago
    > Sure, but it's more than frustrating to go to a lawyer for a service you are supposed to just get [...] Of course. In a healthy market (low transactions costs and sufficient number of participants leads to sufficient volume and price discovery, and thus competition, which eliminates economic rent seekers) you simply stop using the bad provider and switch to a good provider. Of course people hate moving even more than contracting an attorney. And that's why advanced economies need consumer protection bureaus/agencies to counteract these inefficiencies. So they should bring the lawsuits to weed out the bad providers and incentivize keeping the terms of the contracts. Unfortunately in the US these agencies are either non-existent or pretty weak, and their place was taken by class action lawsuits brought by opportunistic law firms. > modernizations justify higher rents. Well, a rental unit is like a field in a farm. Or maybe compare it to a greenhouse. If you replace the insulation on the greenhouse to something better now you can cultivate more/better plants, which means you make more money. Investments (by definition) increase the capital value of the asset. More capital produces more output, so it can be exchanged for more money. For a housing unit the output is hedonistic value (aesthetic value, comfort value, better soundproofing, better plumbing, adding AC). > Which is just nuts because why would a one-time investment justify a basically indefinitely going increased rent... ... it permanently increases the buying price of the unit. Just like with a house. If you renovate it you can sell it for more. If it's empty you can rent it out for more (in perpetuity). The simple fact that there's a tenant doesn't change this. Of course one must also consider amortization, but almost all rental agreements mandate that the owner actively maintain the unit, so its effect should be net zero, but if the market price of maintenance increases (because raw materials, plumbers, painters, etc. become more expensive) then it's not unreasonable for the rent to increase too. (And since the cost disease is especially affecting things manufactured/built/provided locally ... housing is getting a lot pricier. [0]) Also there's inflation. Which just by itself makes nominal rent increases a necessity. [0] See https://phenomenalworld.org/analysis/the-class-politics-of-the-dollar-system https://phenomenalworld.org/analysis/the-class-politics-of-t... and http://web.archive.org/web/20191015142434/http://rationallyspeakingpodcast.org/show/rs-236-alex-tabarrok-on-why-are-the-prices-so-dmn-high.html http://web.archive.org/web/20191015142434/http://rationallys... ( https://www.stitcher.com/show/rationally-speaking/episode/rationally-speaking-236-alex-tabarrok-on-why-are-the-prices-so-d-mn-high-62736125 https://www.stitcher.com/show/rationally-speaking/episode/ra... )
    - deleted 5y ago
      [deleted]

pas 5y ago

If these corporations don't keep their end of the bargain (ie. they don't maintain the buildings), then sue them and/or fine them. No need to buy them out.

blablabla123 5y ago
Sure, but it's more than frustrating to go to a lawyer for a service you are supposed to just get, even if you can get free consulting through an insurance. That's why most people don't jump through those hoops and work-around it themselves. (I.e. do nothing usually which is bad for both parties) Also there has been a general official agreement so far that modernizations justify higher rents. Which is just nuts because why would a one-time investment justify a basically indefinitely going increased rent...
- pas 5y ago
  > Sure, but it's more than frustrating to go to a lawyer for a service you are supposed to just get [...] Of course. In a healthy market (low transactions costs and sufficient number of participants leads to sufficient volume and price discovery, and thus competition, which eliminates economic rent seekers) you simply stop using the bad provider and switch to a good provider. Of course people hate moving even more than contracting an attorney. And that's why advanced economies need consumer protection bureaus/agencies to counteract these inefficiencies. So they should bring the lawsuits to weed out the bad providers and incentivize keeping the terms of the contracts. Unfortunately in the US these agencies are either non-existent or pretty weak, and their place was taken by class action lawsuits brought by opportunistic law firms. > modernizations justify higher rents. Well, a rental unit is like a field in a farm. Or maybe compare it to a greenhouse. If you replace the insulation on the greenhouse to something better now you can cultivate more/better plants, which means you make more money. Investments (by definition) increase the capital value of the asset. More capital produces more output, so it can be exchanged for more money. For a housing unit the output is hedonistic value (aesthetic value, comfort value, better soundproofing, better plumbing, adding AC). > Which is just nuts because why would a one-time investment justify a basically indefinitely going increased rent... ... it permanently increases the buying price of the unit. Just like with a house. If you renovate it you can sell it for more. If it's empty you can rent it out for more (in perpetuity). The simple fact that there's a tenant doesn't change this. Of course one must also consider amortization, but almost all rental agreements mandate that the owner actively maintain the unit, so its effect should be net zero, but if the market price of maintenance increases (because raw materials, plumbers, painters, etc. become more expensive) then it's not unreasonable for the rent to increase too. (And since the cost disease is especially affecting things manufactured/built/provided locally ... housing is getting a lot pricier. [0]) Also there's inflation. Which just by itself makes nominal rent increases a necessity. [0] See https://phenomenalworld.org/analysis/the-class-politics-of-the-dollar-system https://phenomenalworld.org/analysis/the-class-politics-of-t... and http://web.archive.org/web/20191015142434/http://rationallyspeakingpodcast.org/show/rs-236-alex-tabarrok-on-why-are-the-prices-so-dmn-high.html http://web.archive.org/web/20191015142434/http://rationallys... ( https://www.stitcher.com/show/rationally-speaking/episode/rationally-speaking-236-alex-tabarrok-on-why-are-the-prices-so-d-mn-high-62736125 https://www.stitcher.com/show/rationally-speaking/episode/ra... )
  - deleted 5y ago
    [deleted]