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https://fee.org/articles/berlin-s-disastrous-rent-control-law-gets-scrapped/ https://fee.org/articles/berlin-s-disastrous-rent-control-la...

by unmole 3y ago

em-bee 3y ago
that is about an additional more restrictive form of rent control on top of the already existing nationwide rent-control laws: "The court ruled on Thursday that the Berlin government had overstepped its powers in introducing the law, as federal law governing rents was already in place." this does not support an argument against rent control in general, but only against outright freezing rents in place which is what this law tried to do. the stories about landlords getting around the rent limit by charging extra for furniture are also not helping the argument because the law covered that too, so they were effectively breaking the law. the only argument that is valid is the fact that less units were available for rent, showing that this particular law didn't work. but again, this does not prove that rent-control on general is bad. german rent-control generally means that rent may not be charged higher than about 20% of the average rent in an area. this means that rents are still somewhat flexible and they can rise, but not excessively so.
- looping__lui 3y ago
  Rent control in Germany also fixed the housing shortage and creates great incentives for new construction. In 2022, Germany had a record in new apartment and buildings finished - 2023 will probably even better. The new ECB interest regime of 4+% actually had very limited effect on the market in this respect thanks to rent control. Like honestly, rent control is just beyond dumb. There are like 1000 ways that actually solve the problem - but unfortunately they require cities and bureaucrats to work instead of just passing a law. Supply and demand. If it takes LONGER to get a building permit that to actually build a housing complex… When cities are not planning ahead creating new space (argh, infrastructure, public transportation, this sounds like work…
  - em-bee 3y ago
    i am a bit confused. rent control in germany works, but then you are arguing against it? actually i disagree that simply allowing to build enough property will work. businesses tend to charge as much as they can, and if we want actual competition in rent prices, then the supply would have to vastly exceed the demand and not just meet it. with all the best intentions, that is not going to happen, and i don't think it is desirable either. excessive prices need to be prevented either way.
    - unmole 3y ago
      The comment you are replying to was sarcastic: https://www.businesswire.com/news/home/20230126005862/en/Germany-Construction-Industry-Report-2022-Output-Expected-to-Shrink-by-3.2-in-Real-Terms-through-2022---Market-Size-Trends-and-Forecasts-to-2026---ResearchAndMarkets.com https://www.businesswire.com/news/home/20230126005862/en/Ger... > and if we want actual competition in rent prices, then the supply would have to vastly exceed the demand and not just meet it. So, having less than 1% of the housing stock go to AirBnB supposedly makes cities unaffordable but increasing the supply of housing will not have the opposite effect until supply greatly exceeds demand? Why?
      - em-bee 3y ago
        because prices aren't lowered until there is pressure to do so. and that won't happen until enough properties remain empty that it starts to cost money. as far as i can tell, the preference currently is to leave properties empty instead of renting them out at low prices, so all creating more supply will do is to create more empty properties, unless landlords are literally forced to rent them out at lower prices.
        unmole 3y ago
        > as far as i can tell, the preference currently is to leave properties empty instead of renting them out at low prices In Narnia? Go look at the actual vacancy rate.

https://fee.org/articles/berlin-s-disastrous-rent-control-law-gets-scrapped/ https://fee.org/articles/berlin-s-disastrous-rent-control-la...

by unmole 3y ago

https://fee.org/articles/berlin-s-disastrous-rent-control-law-gets-scrapped/ https://fee.org/articles/berlin-s-disastrous-rent-control-la...

em-bee 3y ago

that is about an additional more restrictive form of rent control on top of the already existing nationwide rent-control laws: "The court ruled on Thursday that the Berlin government had overstepped its powers in introducing the law, as federal law governing rents was already in place." this does not support an argument against rent control in general, but only against outright freezing rents in place which is what this law tried to do. the stories about landlords getting around the rent limit by charging extra for furniture are also not helping the argument because the law covered that too, so they were effectively breaking the law. the only argument that is valid is the fact that less units were available for rent, showing that this particular law didn't work. but again, this does not prove that rent-control on general is bad. german rent-control generally means that rent may not be charged higher than about 20% of the average rent in an area. this means that rents are still somewhat flexible and they can rise, but not excessively so.

looping__lui 3y ago
Rent control in Germany also fixed the housing shortage and creates great incentives for new construction. In 2022, Germany had a record in new apartment and buildings finished - 2023 will probably even better. The new ECB interest regime of 4+% actually had very limited effect on the market in this respect thanks to rent control. Like honestly, rent control is just beyond dumb. There are like 1000 ways that actually solve the problem - but unfortunately they require cities and bureaucrats to work instead of just passing a law. Supply and demand. If it takes LONGER to get a building permit that to actually build a housing complex… When cities are not planning ahead creating new space (argh, infrastructure, public transportation, this sounds like work…
- em-bee 3y ago
  i am a bit confused. rent control in germany works, but then you are arguing against it? actually i disagree that simply allowing to build enough property will work. businesses tend to charge as much as they can, and if we want actual competition in rent prices, then the supply would have to vastly exceed the demand and not just meet it. with all the best intentions, that is not going to happen, and i don't think it is desirable either. excessive prices need to be prevented either way.
  - unmole 3y ago
    The comment you are replying to was sarcastic: https://www.businesswire.com/news/home/20230126005862/en/Germany-Construction-Industry-Report-2022-Output-Expected-to-Shrink-by-3.2-in-Real-Terms-through-2022---Market-Size-Trends-and-Forecasts-to-2026---ResearchAndMarkets.com https://www.businesswire.com/news/home/20230126005862/en/Ger... > and if we want actual competition in rent prices, then the supply would have to vastly exceed the demand and not just meet it. So, having less than 1% of the housing stock go to AirBnB supposedly makes cities unaffordable but increasing the supply of housing will not have the opposite effect until supply greatly exceeds demand? Why?
    - em-bee 3y ago
      because prices aren't lowered until there is pressure to do so. and that won't happen until enough properties remain empty that it starts to cost money. as far as i can tell, the preference currently is to leave properties empty instead of renting them out at low prices, so all creating more supply will do is to create more empty properties, unless landlords are literally forced to rent them out at lower prices.
      - unmole 3y ago
        > as far as i can tell, the preference currently is to leave properties empty instead of renting them out at low prices In Narnia? Go look at the actual vacancy rate.