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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 bu

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.
      - anonuser123456 3y ago
        It’s weird that people think cashflow on leveraged investments isn’t important.
        em-bee 3y ago
        part of the "problem" is that rent contracts are unlimited, so if rents are to low, then it may make sense to wait until they rise before renting out, especially in sight of a law that doesn't allow any raises for the time being. but as the article points out, many instead opted to sell outright.
        looping__lui 3y ago
        So, to your point, this law of capping rents would then incentivize landlords to keep rental units vacant? Wow, sounds like exactly the kind of effect one can expect from laws suggested by Red-Red-Green in Berlin that lack any common sense or basic understanding of markets.
      - em-bee 3y ago
        the very article you posted earlier shows that when the price controls were applied, a significant amount of rental properties were instead offered for sale. my interpretation is that these sellers didn't think that renting out at those prices was worth it, or soon wouldn't be. i highly doubt that these people, when confronted with a more competitive market would choose to lower rent to compete instead of again just sell. so i highly doubt that more rental units will automatically lead to lower rents.

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.
    - anonuser123456 3y ago
      It’s weird that people think cashflow on leveraged investments isn’t important.
      - em-bee 3y ago
        part of the "problem" is that rent contracts are unlimited, so if rents are to low, then it may make sense to wait until they rise before renting out, especially in sight of a law that doesn't allow any raises for the time being. but as the article points out, many instead opted to sell outright.
        looping__lui 3y ago
        So, to your point, this law of capping rents would then incentivize landlords to keep rental units vacant? Wow, sounds like exactly the kind of effect one can expect from laws suggested by Red-Red-Green in Berlin that lack any common sense or basic understanding of markets.
    - em-bee 3y ago
      the very article you posted earlier shows that when the price controls were applied, a significant amount of rental properties were instead offered for sale. my interpretation is that these sellers didn't think that renting out at those prices was worth it, or soon wouldn't be. i highly doubt that these people, when confronted with a more competitive market would choose to lower rent to compete instead of again just sell. so i highly doubt that more rental units will automatically lead to lower rents.