Berlin Freezes Rents for 5 Years in a Bid to Slow Gentrification

Jockel · Feb 4, 2020

Unfortunately a rent freeze by itself is too little, too late.
The area I grew up in, Prenzlauer Berg, has rent prices up to 20€ / m². They gentrified the fuck out of that district. Obviously by now, many other districts followed. It's a complete fucking joke. Explain to me how a person working retail for like 1400€ / month should be able to afford a flat that costs 1000€ / month?
The new Mietendeckel is apparently in place, but judging by offers on immobilienscout, landlords didn't change their prices yet. I called a few of them and asked them if they'd modify their rent prices (some would have to go down from like 2000€ to ~800€) according to the new law, and they just laughed or became very angry. So uh, I'll believe it when I see it.

Acidote · Feb 4, 2020

Pandora012 said:
What happens after the 5 years?

They try to brutally jack up prices but people know there are alternatives and ask their polititians to reinstate the rent freeze.

Deleted member 6230 · Feb 4, 2020

Titik said:
They won't save us but the government can also help by not making it too hard to get anything built at all. In fact the government should start building more.

Oh most definitely.

Carn · Feb 4, 2020

Sanka said:
Ach Berlin. Was ist Berlin? Berlin ist die Stadt für die man sich als Deutscher auf internationaler Bühne schämen muss. Wenn man Berlin mit anderen europäischen Hauptstädten wie London, Paris, Madrid und Amsterdam vergleicht, treibt es jedem anständigen Menschen die Schamesröte ins Gesicht. Selbst kleine Länder wie Österreich, Belgien oder die Schweiz haben mit Wien, Brüssel und Zürich international vorzeigbare Städte mit hoher Lebensqualität. Deutschland ist gestraft mit Berlin, der Hauptstadt der Versager.

Well, I'dd much rather live in Berlin than in Amsterdam of London, both are way more expensive, and Amsterdam is pretty much 90% tourist-trap these days; its much worse than Berlin in that regards (because its relatively small).

Temascos · Feb 4, 2020

Frodo said:
London can only dream...

Oh man, I wish this happened in London. But sadly it's not going to be the case anytime soon, and it's a hard case to make given the power landlords have in this country. :(

subpar spatula · Feb 4, 2020

It isn't going to work the way they want it to work.

Glasgow Mega-Snake · Feb 4, 2020

This is good but only a stopgap. Now the city needs to actually build affordable housing on a large scale, and Berlin's administration is notoriously slow (though that's partly due to previous budget cuts leading to ridiculous staff shortages) while space is getting scarce.

Though a lot of this is the city's own fault. In the 90s they suddenly had huge tracts of empty land right in the center, where the no man's land around the wall used to be. They should have seen that Berlin would attract people once it became the capital again, and started building new residentials ares. But way too much was just handed over to investors for peanuts. And now everybody's surprised all they're building is luxury apartments and hotels (after they sat on the property for 20 years and waited for prices to go up).

Donos · Feb 4, 2020

Empress of ice cream said:
Berlin beheimatet mit Abstand am meisten Arschlöcher in der gesamten Republik. Deutsche Bahn, Bundestag, Air Berlin (nicht mehr) und der Axel Springer Verlag sind nur einige Beispiele für den unfähigen Abschaum der hier beherbergt wird.

Glorreiche Zeit sind schon längst vorbei, diese Stadt liegt am Boden. Der Berliner an sich ist durch und durch ein fauler Lump. Charaktereigenschaften die in jedem zivilisierten Kulturkreis als pure Faulheit, Unfreundlichkeit, Unfähigkeit, dissoziale Persönlichkeitsstörung und Dummheit gelten, erklärt der Berliner kurzerhand zur Berliner Wesensart. Ein weiteres zentrales Merkmal ist der alles beherrschende Minderwertigkeitskomplex. Deswegen projiziert der Berliner auf jeden der in irgendeiner Weise besser ist als er, massive Hassgefühle. Besonders die ihm in allen Belangen haushoch überlegenen Süddeutschen sind ihm ein Dorn im Auge.

what did i just read. i just can't...

OT: it's already watered down compared to the first drafts. How it will stand in court is still open. It's already on very shaky legs though.

Titik · Feb 4, 2020

infinite said:
Oh most definitely.

There is this stigma about government housing and ghettos though. But I think we have learned a lot in the last 50 years to do it the right way: build them taller, but not too tall. Build them compact and walkable. And build the economic classes all mixed in and not segregated. If rich people complain, make it a requirement via law. And don't ask for work, school or drug testing requirements.

G.O.O. · Feb 4, 2020

"In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing."

https://www.brookings.edu/research/...ce-tell-us-about-the-effects-of-rent-control/

It's a terrible idea that will punish the very people it's supposed to help, as it did everywhere, only because some people think "lol fuck landlords" is enough to make a policy. :/

MJForum Poster · Feb 4, 2020

Instead of freezing rents, increase the supply of affordable (read: not luxury condo) housing

trunx81 · Feb 4, 2020

Funfact: most landlords raised the rent before this bill passed.

and I agree: Berlin is terrible. Its the most antisemitic City in Germany.

voOsh · Feb 4, 2020

MJForum Poster said:
Instead of freezing rents, increase the supply of affordable (read: not luxury condo) housing

Yup but that takes actual work from Berlin officials. Rent control is a proclamation they can sign and be done with it. Laziness.

Deleted member 44371 · Feb 4, 2020

this has been known for months

Readler · Feb 4, 2020

Sanka said:
Ach Berlin. Was ist Berlin? Berlin ist die Stadt für die man sich als Deutscher auf internationaler Bühne schämen muss. Wenn man Berlin mit anderen europäischen Hauptstädten wie London, Paris, Madrid und Amsterdam vergleicht, treibt es jedem anständigen Menschen die Schamesröte ins Gesicht. Selbst kleine Länder wie Österreich, Belgien oder die Schweiz haben mit Wien, Brüssel und Zürich international vorzeigbare Städte mit hoher Lebensqualität. Deutschland ist gestraft mit Berlin, der Hauptstadt der Versager.

Und dafür bin ich dankbar.

Empress of ice cream · Feb 4, 2020

Donos said:
what did i just read. i just can't...

OT: it's already watered down compared to the first drafts. How it will stand in court is still open. It's already on very shaky legs though.

Eine echte deutsche Kopiernudel. Der ganze Beitrag ist legendär.

shotopunx · Feb 4, 2020

In Ireland we're facing an insane housing crisis, and we have an election on Saturday which is going to be interesting. One party is proposing not just freezes, but also a rent reduction.

My opinion is that housing absolutely should not be left to the free market, and the majority of housing should be built by the state.

Deleted member 58401 · Feb 4, 2020

Whoa. Never heard of this step. Super cool if there aren't obvious drawbacks I'm oblivious to.

Deleted member 6230 · Feb 4, 2020

Titik said:
There is this stigma about government housing and ghettos though. But I think we have learned a lot in the last 50 years to do it the right way: build them taller, but not too tall. Build them compact and walkable. And build the economic classes all mixed in and not segregated. If rich people complain, make it a requirement via law. And don't ask for work, school or drug testing requirements.

literally agree with everything you say here.

dragonbane · Feb 4, 2020

As a renter in Berlin, hopefully this stands. Rents have risen absurdly

hurroocane · Feb 4, 2020

Sankt Ra said:
Munich next please.

I think landlords in Munich are in panic mode about it already. A friend there told me the landlord of his business space wanted to increase rent by 40% for 2021.

Fourty fucking percent!

Lexad · Feb 4, 2020

Imp the Dimp said:
https://en.wikipedia.org/wiki/Rent_regulation#Economics

Rent control is a highly contested measure and all the "poor landlord" takes in here are juvenile and short-sighted as fuck. You guys should stop browing chapo. If anything, the consensus is that it doesn't work as intended.

Anyone who has taken a basic economics course know this is a really poor decision.

BossAttack · Feb 4, 2020

Fulminator said:
that's awesome

I was just in Berlin last year. Apparently I need to brush up on my German and head on back to stay.

Deleted member 4346 · Feb 4, 2020

Ivalice said:
It is quite strange how we agree that free market healthcare and private healthcare companies are a disaster, but expect the private industry and real estate corporations to save us with housing.

Housing should 100% be socialized.

Dictator · Feb 4, 2020

trunx81 said:
Funfact: most landlords raised the rent before this bill passed.

and I agree: Berlin is terrible. Its the most antisemitic City in Germany.

First time I have ever read someone describe Berlin as the most anti-semitic city in Germany. Any reasoning that you say that?

A friend of mine does social after school work here in Neukölln specifically looking at descrimination and noticed how deragtory stereotypes about "jews" (who these people of course never met) are used by youth of turkish and arabic (various) descent. Yet that describes only one facet of the population of Berlin...

IDK, not too comfortable with someone describing Berlin that way.
----
Also this reform is completely necessary in light of what has happened the last 8-10 years in Berlin. In fact, there needs to be even more done.

OnionPowder · Feb 4, 2020

G.O.O. said:
"In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing."

https://www.brookings.edu/research/...ce-tell-us-about-the-effects-of-rent-control/

It's a terrible idea that will punish the very people it's supposed to help, as it did everywhere, only because some people think "lol fuck landlords" is enough to make a policy. :/

Got any ideas to help with the absolute rampant increases in rents then?

I've seen enough about market anxiety for the landlords and the lack of "enough" profit to drive growth in the sectors but what are the solutions then? The vast majority of the downsides are all from landlords giving up because there's not enough profit and the only suggested idea leads to an increase on tax rates and government spending to supplement the landlords suggested payment. How about, instead, when capital firms aren't making enough on reasonably priced rentals then they should just sell their property back to the government.

We need more public housing initiatives to go along with rent control and, in general, less of a reliance on foreign and private capital for housing.

BossAttack · Feb 4, 2020

G.O.O. said:
"In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing."

https://www.brookings.edu/research/...ce-tell-us-about-the-effects-of-rent-control/

It's a terrible idea that will punish the very people it's supposed to help, as it did everywhere, only because some people think "lol fuck landlords" is enough to make a policy. :/

One article that compares two applications of Rent control in two different cities in the U.S. is hardly a winning example of how rent control doesn't work. Hell, the article ends with this agreeing that it helps residents in the short term:

Rent control appears to help affordability in the short run for current tenants, but in the long-run decreases affordability, fuels gentrification, and creates negative externalities on the surrounding neighborhood. These results highlight that forcing landlords to provide insurance to tenants against rent increases can ultimately be counterproductive. If society desires to provide social insurance against rent increases, it may be less distortionary to offer this subsidy in the form of a government subsidy or tax credit. This would remove landlords' incentives to decrease the housing supply and could provide households with the insurance they desire. A point of future research would be to design an optimal social insurance program to insure renters against large rent increases.

The crux of the article is that landlords are scum and will either stop maintaining buildings once rent control is applied or convert units into condos and thus decrease the housing stock. But, when landlords are already doing both of those anyway in cities yet still extracting more and more rent that hardly seems a basis to reject rent control.

LinkStrikesBack · Feb 4, 2020

Lexad said:
Anyone who has taken a basic economics course know this is a really poor decision.

Serious question though: what else can be done on the short term to stop examples like the above 40% or more rent increases? Obviously you need to build more houses, but as that obviously takes a nontrivial amount of time, it seems to me that should be done as a midterm solution and combined with something like the rent freezes on the short term.

Holden · Feb 4, 2020

OnionPowder said:
Got any ideas to help with the absolute rampant increases in rents then?

I've seen enough about market anxiety for the landlords and the lack of "enough" profit to drive growth in the sectors but what are the solutions then? The vast majority of the downsides are all from landlords giving up because there's not enough profit and the only suggested idea leads to an increase on tax rates and government spending to supplement the landlords suggested payment. How about, instead, when capital firms aren't making enough on reasonably priced rentals then they should just sell their property back to the government.

We need more public housing initiatives to go along with rent control and, in general, less of a reliance on foreign and private capital for housing.

Tell homeowners and homeowner association to fuck off and build more housing
People are obsessed with buying houses and hope it takes value, so when you build an apartment complex next to a house it loses value.
Renting a house should generate some profit but not owning a house and just living in it.

Lishi · Feb 4, 2020

I think pretty much all the expert agree that rent control in the long run are not very good.

It can help now people that are getting squeezed out, but eventually something more need to be done to fix the low supply of houses.
Since is likely that rent control will kill private investment i guess the government will have to step up.

Sordid Plebeian · Feb 4, 2020

Will be curious to see how this goes

tacocat · Feb 4, 2020

gorkvondonsler said:
Whoa. Never heard of this step. Super cool if there aren't obvious drawbacks I'm oblivious to.

It sounds great in theory but markets work on incentives. A landlord has no incentive to update or spend money making the property nicer if they can't get any money out of it. Especially with inflation, cost of everything else goes up and landlord is making less money off the property so they don't have the resources to maintain it properly.

I'm not sure where I stand on rent control. As a property owner with a rental unit I want to be able to charge whatever somebody will pay to maximize my return on investment. I worked my ass off for a long time to afford my property in the hopes that I will be able to retire off of it some day. As a human being though I don't want to screw people over. Luckily I have family members living in my rental property now and I'm fine giving them below market rate.

Deleted member 10612 · Feb 4, 2020

What actually gets my blood boiling in Munich is the law that no housing project can be build higher then the cities main church. So you can build a block of condos but you cant build higher then 100m. To preserve the city "skyline". Like wtf. So that rich assholes who have their share can enjoy a tiny viallge like skyline. Arghh.

Build affordable housing until the saturation point is reached and do so by fucking building condo skyscrapers. Its not only efficient use of heating energy it is a great tool to reduce demand and price.

Imo landlords should only get upkeep costs for their house and that's it. Especially the heirs who own whole city blocks.
Housing is a necessity no one should make money with. Housing needs to be build by the fucking government.

Elfotografoalocado · Feb 4, 2020

Ivalice said:
It is quite strange how we agree that free market healthcare and private healthcare companies are a disaster, but expect the private industry and real estate corporations to save us with housing.

Maybe to someone who doesn't know economics. Healthcare and housing are nothing alike.

G.O.O. said:
"In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing."

https://www.brookings.edu/research/...ce-tell-us-about-the-effects-of-rent-control/

It's a terrible idea that will punish the very people it's supposed to help, as it did everywhere, only because some people think "lol fuck landlords" is enough to make a policy. :/

That's a good summary of the literature for laypeople. It' s not as if this hasn't been studied, and there is no clear answer to what works best, but it's very clear that freezing prices and setting other such limitations is terrible for everyone.

Lishi · Feb 4, 2020

Sankt Ra said:
Imo landlords should only get upkeep costs for their house and that's it. Especially the heirs who own whole city blocks.
Housing is a necessity no one should make money with.

You might as well abolish the landlords, no one in the right mind would invest in property. And the one that happen to own a house that they are not using would probably not take the chance and just not rent.

Witch probably it's fine with you. But it require the state to step up.

Deleted member 6230 · Feb 4, 2020

Lishi said:
You might as well abolish the landlords, no one in the right mind would invest in property. And the one that happen to own a house that they are not using would probably not take the chance and just not rent.

Witch probably it's fine with you. But it require the state to step up.

yeah that's fine with me

Deleted member 2834 · Feb 4, 2020

LinkStrikesBack said:
Serious question though: what else can be done on the short term to stop examples like the above 40% or more rent increases? Obviously you need to build more houses, but as that obviously takes a nontrivial amount of time, it seems to me that should be done as a midterm solution and combined with something like the rent freezes on the short term.

That lexad guy has no clue what he's talking about, ignore him. Virtually every economist would agree with me. Don't take my word for it - just google "rent control studies" and report back what you find. As for action that can be taken, there's no simple solution. People are increasingly flocking to urban areas for a varitey of reasons and providing affordable housing for everyone is a challenge. Building houses must be incentivized, bureaucracy reduced, needless restrictions (for example regarding the amount of storeys allowed) removed. Stick to what economists say. They're not infallible but they're sure as hell a better source of policy than the economically illiterate landlord haters on twitter or Era. All of a sudden, expert opinions don't matter. People in this thread are cheering for a policy that, for all we know, is not only ineffective in what it intends to do, but which is also known to exacerbate the issue in the long run. That leads me to believe these people either don't really care about the tenants or have literally never done any research on the matter at all.

Deleted member 10612 · Feb 4, 2020

Lishi said:
You might as well abolish the landlords, no one in the right mind would invest in property. And the one that happen to own a house that they are not using would probably not take the chance and just not rent.

Witch probably it's fine with you. But it require the state to step up.

Yeah, the state needs to step up. Housing should not be investment driven. I know thats impossible right now. Buts its so very frustrating if you are not gifted with a head start in life. It gets harder and harder to get property every year, soon it will be simply impossible for well over 90% of people... if it isn't already.

My Landlord is a heir, never worked his entire life, owns streets in multiple cities, does not care that the windows in my condo leak when its raining but tried to raise rent by 15% last December.

Governments spend billions on military crap --> spend as much on building self sustaining housing projects.

Mido · Feb 4, 2020

Next headline: All new rental projects to be cancelled.

AndyD · Feb 4, 2020

How do you account for inflation? Or does it have a step up approach?

9-Volt · Feb 4, 2020

MJForum Poster said:
Instead of freezing rents, increase the supply of affordable (read: not luxury condo) housing

That didn't work out well for Istanbul. Excessive housing development had almost killed the whole country by igniting an economic crisis. At least 7 million newly built affordable apartments, 4 million of them are in Istanbul alone are still unsold and that number keeps getting increased as people don't have any other way to invest their money.

Ghost towns everywhere.

MJForum Poster · Feb 4, 2020

9-Volt said:
That didn't work out well for Istanbul. Excessive housing development had almost killed the whole country by igniting an economic crisis. At least 7 million newly built affordable apartments, 4 million of them are in Istanbul alone are still unsold and that number keeps getting increased as people don't have any other way to invest their money.

Ghost towns everywhere.

I think if you built 7 million new apartments in any city, a lot of them would go unsold

Building more affordable housing without bounds is not going to fix the issue. But in a market strapped for housing that is causing prices to skyrocket, it can often be a (sizable) piece of the overall puzzle, along with re-zoning and improvements to transit.

Bobson Dugnutt · Feb 4, 2020

Well this thread just reminds how much I've been skipping on my German learning. I thought I was ok at reading German, but I only got half of that. Und Ich habe Deutsche Familie auch. Ich bin ein dummkopf.

Dr. Mario · Feb 4, 2020

So what I got from this thread, Germans do not like Berlin, lol.

Stinkles · Feb 4, 2020

reBUILD THE WALL!!!

wonder how much east west disparity there still is. The city used to feel different between the two sides but over the years that's really smoothed out - 50s and 60s architecture aside it's hard to recognize as a tourist or visitor but it definitely used to be cheaper on the East and was gentrifying faster so there were more bargains.

des0lar · Feb 4, 2020

Fun fact: Berlin is the only capital in Europe, which decreases its country's GDP.
Remove Berlin from Germany and GDP would jump by a couple percentage points.

Deleted member 48897 · Feb 4, 2020

Imp the Dimp said:
Rent control is a highly contested measure and all the "poor landlord" takes in here are juvenile and short-sighted as fuck. You guys should stop browing chapo. If anything, the consensus is that it doesn't work as intended.

Chapo? Please, when I seek out anti-capitalist arguments with fart jokes I go straight to the source: Mao

Deleted member 2834 · Feb 4, 2020

des0lar said:
Fun fact: Berlin is the only capital in Europe, which decreases its country's GDP.
Remove Berlin from Germany and GDP would jump by a couple percentage points.

It's almost like this city had to deal with some very unique historical circumstances that A) made companies leave and B) and saw half its city run down by socialism. The Berlin hate among some Germans is actually insane. The rent control bill is an actual loser that will likely make things worse for anyone but people like me who got a flat and won't ever leave it again, but most of the flak this city gets is unwarranted.

Deleted member 6582 · Feb 4, 2020

Rent freezing only benefits people who are already there and gives them advantages over those that are trying to aquire housing, this then deprioritizes new construction and upgrades. It's a completely fuck you got mine NIMBY policy. The solution is more building, higher building, period.

Akai · Feb 4, 2020

A good step for sure. Other cities surely need to follow.

Stinkles said:
reBUILD THE WALL!!!

wonder how much east west disparity there still is. The city used to feel different between the two sides but over the years that's really smoothed out - 50s and 60s architecture aside it's hard to recognize as a tourist or visitor but it definitely used to be cheaper on the East and was gentrifying faster so there were more bargains.

No expert in architecture and maybe I'm biased because I live here, but whenever I ride the Ringbahn (train that circles Berlin) it becomes very obvious in which part of Berlin I am just by looking out of the window. People say that things got a lot better, but certain areas in east Berlin still look very desolated and broken. Don't have a personal comparison as to how it looked like in the 50's/60's, though.

Imp the Dimp said:
It's almost like this city had to deal with some very unique historical circumstances that A) made companies leave and B) and saw half its city run down by socialism. The Berlin hate among some Germans is actually insane. The rent control bill is an actual loser that will likely make things worse for anyone but people like me who got a flat and won't ever leave it again, but most of the flak this city gets is unwarranted.

Well said.

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