
Berlin Builds Ideas to Stage a Housing Revolution - vector_spaces
https://www.citylab.com/equity/2019/02/berlin-germany-housing-rent-how-much-price-landlord-policies/582898/
======
adrianN
The truth is that rents in Berlin are exceptionally cheap compared to other
major cities. Try finding a flat in London or Paris for <10€/square
meter/month that is half an hour bike ride away from the city center.

The only way to keep rents this low in the face of rising demand is public
housing that is rented out below market rates to low income tenants, or via a
lottery.

~~~
tyfon
One of the reasons for the cheap rent is the fact that the population of
Berlin is still below what it was prior to WWII. I found it quite baffling at
least when I read about it.

The city got hit _hard_

~~~
areyousure
The population of Manhattan is also below its pre-WWII level, and much below
its ~1910 peak, but rent is not cheap.

~~~
vvillena
The difference lies on the metropolitan area. The New York area is surely more
populated than in WW2, even if Manhattan isn't.

~~~
ucaetano
Nope. The difference is that you had far more people living in the same
dwelling units. The population of Manhattan peaked around 1910, at 2.3M, it is
1.6M today.

~~~
zwaps
NYC population, he meant.

Berlin is overall smaller than before WW2. And it shows, the place is really
empty and spacious compared to comparably attractive cities.

The issue is that Berlin people like it that way. They don't want high rise
buildings, let alone skyscrapers. They want their local "Kiez" culture, where
you live, eat, meet and have everything around your house. Berlin doesn't have
a CBD, and it doesn't have a real city center. It has many equivalent ones.
It's like a huge collection of villages.

Berlin is different from Paris or London, and certainly NYC, most importantly
in that it is not cramped. There are numerous huge empty buildings and free
areas right around the geographical center. The issue is not space. The issue
is buildings.

Building in Berlin is difficult. It needs to be pretty and fit the area, its
spaces need to be open to the public or accessible, it needs to provide public
infrastructure and provide for kindergartens, doctors offices etc, it can not
be too large, it needs to have x% social appartements, and it can not have
more than y% luxury flats for sale etc. etc.

Is that good? I don't know. I compare it often to places in developing
countries, where you can build up huge areas of high rises indiscriminately,
and if you wanna have gated areas for rich people, that's fine. That's why the
sidewalks are usually unfinished just outside a given area. Not so in Berlin.
Building something is like an expensive privilege.

And hence, there isn't enough space for housing, even if there is certainly
enough space to "be".

------
berlinerluft
It's horrible. They do everything to prevent more housing from being built.

The fact is, the city is just popular, so people are moving in, which drives
the prices up.

The government of Berlin consists of incompetent socialists. Just look at the
disaster of the new airport for a popular example. Please don't take any cues
from them. They only persist because Berlin get's a lot of subsidies from the
rest of the country.

~~~
thecleaner
The thing is what would happen if they respond yoy he growing demand and build
more housing ? If the economy of the city slows down even a little bit it will
be hit hard with bad debt. Companies are currently mushrooming in Berlin.
Keeping rents affordable could in fact help the people and help create more
companies there.

~~~
berlinerluft
I don't think the city should do the building, so I don't understand what you
mean by bad debt?

Affordable rents don't help much if you can't find a place to rent.

It is not just a problem for people who want to move to the city, but also for
people whose situation has changed, and who now can't move. (Like having kids,
switching jobs, that sort of thing).

------
choeger
Everyone and their cat wants to live as close as humanly possible to the hip
center of the hip city. But of course, they literally do not want to pay the
price. Why is there a vegan bakery specialized in Afghan Bagel[1] around the
corner? Because there are enough hip, young professionals to pay for even the
most unlikely specialty. Business can afford to cater to the most
extraordinary taste, but only because there are so many fluent customers.
These customers then simply drive prices.

Due to the limits of public transportation, there are basically three ways out
of this situation:

1\. Rent ever-smaller, modernized apartments 2\. Move away from the center 3\.
Get out of the city altogether

Modern urbanites will not pick any of these options. They want cheap, large
apartments with basically no insulation and 4m high ceilings. They do not want
to travel more than 10min with the subway. And the thought of leaving Berlin
borders on a crime against humanity. Now add to that the part of the
population that lives in the center of the city for decades and literally
cannot move anymore and you have a really bad situation at hands.

IMO, it is ironic how the modern urban population that is so quick to assign
blame for climate change (to car owners, carnivores), social injustice (to
white men, preferably older), or simply a lack of mobile network coverage
fails to understand their own contribution to the problems of a modern city.

Sorry, but I needed to vent that.

[1] Exaggeration. I don't even know if there are/were any Jews in Afghanistan,
but I like good Bagel.

~~~
buro9
> Due to the limits of public transportation

Fix this.

People live within n time of where they want to be. If people can travel
faster then the space within n time can be greater.

This is the key to Tokyo and other very large metropolis cities.

Have public transport offer high speed and frequent rail routes, and then many
local solutions from cycling, walking, buses, trams.

~~~
Mirioron
> _This is the key to Tokyo and other very large metropolis cities._

But they also live in small apartments and homes. I'm not convinced that Tokyo
is a good example here.

The key to this problem is to have jobs in places that aren't large urban
centers. This way the population spreads out and housing becomes more
affordable.

~~~
helen___keller
I don't completely agree with your assumption that living in Tokyo means you
need to live in a shoebox (and especially not in Osaka which is about 2/3rds
the price of Tokyo), but actually I think there's a case for cheap, somewhat-
cramped housing with good transit access to the city, for those who want it.

In Japan, a middle class family can own a somewhat cramped (say 900 sqft?)
3bedroom house/apartment walking distance to a world class rail system and
generally walking distance to schools and some stores too.

In America's top cities, a middle class family can't afford to own a 3 bedroom
apartment with rail access generally, so they move outside the city to the
suburbs where they often have to drive to work - which means they need to buy
a car, buy gas, etc

But if you don't want the lawn and the picket fence, why is this the only
option available? We've taken a one-size-fits-all approach with covering the
vast majority of the country with big suburban houses, and the free market is
proving people want options, evidenced by wildly inflating prices of urban
properties.

~~~
beauzero
...also loans (in the USA) are determined on the size of the house as
collateral. You are incentivized to buy a large house and small land. I would
rather buy large land and a small house so that I can grow more food, trees,
other natural resources. Our family has no need for a large house and they are
inefficient to cool and heat.

~~~
vonmoltke
> ...also loans (in the USA) are determined on the size of the house as
> collateral.

What are you talking about? The collateral is the full property, not just the
structure.

------
galfarragem
Everything but freezing rents!

Freezing rents literally destroyed Portuguese city fabric and renting market
during that time: landlords didn't want to rent more houses neither repair the
rented ones. Until recently wasn't uncommon to have old people renting a flat
in Lisbon city center for 20€.

~~~
ip26
I wonder if cities that freeze rents also freeze property taxes?

~~~
manfredo
Some do. California froze property taxes state wide. Many cities then
instituted price controls on rents. The result is prices over $10 per square
foot in cities like San Francisco.

Rent control means that renters have a big incentive not to move to different
apartments. I've even heard stories of people continuing to rent their places
after they've moved to different cities so that they can keep the same rents
if they ever move back to San Francisco.

Freezes on property taxes means that homeowners try to hold onto their home as
long as possible. Because many home owners invest a big portion of their net
worth into their house, they are often very adverse to anything that might
make home values go down (like building more housing).

Frozen rents + frozen property taxes = extremely high rents due to little
supply of housing

------
tjansen
I live in a different but still expensive Germany city and rent a apartment
from a city-owned public housing company. The rent of the landlord's
apartments is 20-30% lower than what you would pay in the free market, and in
my neighbourhood I can get a pretty good idea of what people do to get one of
those highly desired apartments. It's just crazy. I have heard everything
short of bribing the person responsible for selecting renters. Calling her
daily, flowers, pity stories.. another way to get into a highly coveted
apartment is to get a recommendation from a renter who's leaving, basically
taking over their contract. Often that involves paying absurdly high sums to
the previous renter for floors and furniture left behind, or doing renovations
for them.

By the way, getting into the best kindergartens and schools appears to work
like that as well. Many German cities are so overcrowded that you need to
network like in socialism to get what you want, as there are things that money
can't buy (or at least only a lot more money can buy). Those who are not well
connected have a hard time to get the city's services, or at least will end up
with worse facilities.

The demand is just higher than the supply, and if the demand can not be
controlled by increasing the price, people will find other ways to fight for
what they want...

~~~
hawski
Yeah, apartments is one part of it all. I'm trying to find a place in a
kindergarten and it's hell. In Berlin kindergartens are free for some time and
there are no free places. My wife today tried to find a place in a private
kindergarten, no luck even in one for 800 EUR/month.

If we knew German language and customs better maybe it would be easier. But
then I would probably just think about creating our own.

We're getting desperate. If anyone knows about a place in a kita in Berlin for
a 2 year old, please let me know! Private or whatever, or some kind of coop.

~~~
orangeplanet
why not learn to speak German?

~~~
hawski
I'm learning, but can't do this in a day or a month you know?

Ich kann Deutsche sprechen, aber ich bin langsam und nicht so gut. Leute haben
oft keine Geduld, wenn man langsam ist.

------
no_gravity
Looking at the problem from a game theory perspective, it looks like this to
me:

Ambitious people want to live as close to as many other ambitious people as
possible. So wherever the density of these 'Hipsters' or 'Cool People'
increases, the desirability of the area increases. And by law of supply and
demand, prices go up.

The willingness and ability to pay higher rent decides who can live in those
'cool areas'.

Now the 'cool people' might say to the landlords: "Hey, it's US who make this
area cool! Not your houses! Why do we have to pay you for it?".

It's an interesting point. Is it fair? I am not sure. Maybe. The same argument
could hold for Facebook, YouTube or Reddit. It's the users that create all the
value. Yet the platform providers extract most of it.

I think that before we can form an opinion on different types of regulation,
we should ask: If not willingness and ability to pay rent decides who lives
where - what or who will decide instead? And what will be the result?

~~~
dogcomplex
Very interesting point, and comparison to social media. It seems to me that if
most of the users of Facebook, Reddit, etc, were to band together and leave to
somewhere they get a better deal - then the value of those sites would
effectively become zero. If they could just wield it well, they have massive
bargaining power in those relationships. But the cost of organizing such
groups, building a new suitably-featured site, and moving there is a large
limiting factor. The same relationship could be extended to most networks -
including city/housing networks. But staging this mutiny on social media
sounds tough enough - in real life real estate, I imagine it's nearly
impossible! As such, landowners get a hefty upper hand, and there's not much
power the tenants can wield in that negotiation - even if they do collectively
provide most of the real estate value of a property.

That said... what if this bias in network effects isn't eternal, and we humans
just haven't been very good at group organization so far? I can imagine a
userbase mad enough at Facebook might pick a date a year from now, get
everyone they possibly can to sign up to leave on that day, and mass-migrate
to an equivalent site with similar features (which doesn't farm $250 a year
off each person in data - or at least gives those funds back to the user).
With smart contracts to ensure commitment to the move, it could even be a
fully-funded and well-organized migration - which might even have negotiation
options to abort if Facebook met their demands. People would probably even do
it just for the spectacle/coolness factor of being part of such a big
rebellion. It's a bit of a pipe dream, sure, but it's conceivable something
like this could happen. And let's face it, other than the data/hosting
challenges, most of these big social media sites aren't doing anything that
difficult to replicate. Hell, I'd go so far as to say almost any company worth
the big bucks is mainly being priced on brand and network effects (minus
IP/asset ownership). If the networks underlying this got better at organizing
and moving/threatening-to-move to alternatives, they could eat that value and
pass it down to consumers. Hell, it might even work out that they could be
paid to use these services.

The city/housing space is one I'd imagine would be wayyy slower to benefit
from any of these potential consumer unions technologies due to physicality
constraints, but I imagine it too could be translated into these mutinys. e.g.
People could agree to leave a city en-masse to a new one with better (pre-
negotiated) rent/ownership prices, leaving the old city high and dry in a
bubble-bursting scenario. Of course we don't see this now - or at least, not
in any organized form, just an economic drying-up when e.g. a factory closes
and tenants can't afford their rent. But perhaps it's possible in the future
as mobility, communication and coordination increase? Who knows.

------
ForHackernews
Surprised there's no mention yet in this thread of Land Value Tax
[https://en.wikipedia.org/wiki/Land_value_tax](https://en.wikipedia.org/wiki/Land_value_tax)

It's an effective way to encourage development of more housing, and reclaim
some of the costs associated with rising demand for real estate.

~~~
tjansen
The problem with many German cities are that they are already full.
Infrastructure can't keep up with the population. The building density is so
high that it's very difficult to find room for more streets or rails, more
schools and other public buildings. Parks are overcrowded at weekends. I think
the only solution is to get people out of the cities (or maybe build new
cities).

~~~
ForHackernews
I find that hard to believe. Most German cities are low-rise, not skyscrapers.
Elsewhere in this thread, somebody mentioned that Berlin's population today is
still below its pre-WWII high.

~~~
pintxo
It was about 4m before the war. Is not about 3.6 Considering that today’s
living arrangements (sqft per person) is quite different (larger) than 80
years ago, I am not sure this is working argument.

~~~
magduf
The simple solution is to build _up_. Build residential buildings twice as
tall and suddenly having larger living units doesn't seem crazy. We have the
technology today to build taller buildings than we did before WWII, more
economically.

The central problem with all these discussions about housing prices is
construction. There isn't enough of it, it's too expensive in some places for
what you're getting, the whole thing is completely broken and needs to be
fixed. It should not be hard to build new housing units to modern standards.

------
AndrewDucker
Regulate behaviour, not ownership.

If you want landlords to behave better, then rather than keeping them small,
stick limits on what they can do.

~~~
Aeolun
Yeah, that was my impression when reading the article as well.

If the problem is that new landlords are raising the rent by inordinate
amounts, maybe that is what you should restrict instead.

Though I’m not really opposed to breaking up big landlords either, it feels a
bit disingenuous to punish people (or companies) for success.

~~~
pintxo
> it feels a bit disingenuous to punish people (or companies) for success.

Have been there as well. My current position on this is, that the sources for
success are hardly one dimensional. Sure hard work helps, but it also helps to
happen to have good contacts, be born rich, be beautiful and tall, been grown
up in the right social circles, having met the right people etc. So it‘s less
punishing hard work, and more creating a balance with those less lucky.

~~~
dsfyu404ed
While I agree that there's many factors that go into success anyone looking to
control for luck at scale had better be willing to rack up an impressive body
count because those kinds of systemic changes to society are never peaceful.
People will not just accept being told they do not deserve what they have and
that it is the result of luck. You are not going to get people to give up what
they have without a lot of force.

------
smileysteve
In the U.S., this limit is expressed via property taxes and homestead
exemptions; a person living in a building that they own received a ~25%
discount on their property assessment;

------
scotty79
Not a hard limit. Just progressive tax that makes owning much real estate very
expensive and in effect unprofitable.

~~~
AdrianB1
Tax is not policy and not punishment. Get over that.

~~~
dsfyu404ed
It walks like a duck and quacks like a duck. The only people who say it's not
a duck are the ones who want to make their particular pet duck seem more
agreeable to people who do not particularly like said duck.

------
mltvc
I moved from Belgium to Berlin 2 months ago. To me Berlin looks really spread
out compared to Belgian cities and a lot of other big cities. To test my
feeling I just checked this map [1]. It's clear that the population density in
Berlin is lower than in other European cities like London or Paris. Even
smaller cities like Brussels, Copenhagen and Stockholm are denser.

So I think there is still is a lot of potential to relax zoning laws and let
more homes be built. This is the best way to lower rents imo.

[1]
[https://pudding.cool/2018/10/city_3d/](https://pudding.cool/2018/10/city_3d/)

------
Cypher
Nope, because they'll just setup a load of shell companies.

~~~
reallydontask
I'm not saying that this would work but as a thought experiment:

Any entity that buys a house zoned as residential has to pay a tax of 100% of
the value of the house.

Private citizens get an exemption on this tax, if their main residence of
which you can only have one, and are 18 or older.

CGT is 100% (Deductions for home improvements could be added)

The municipality builds affordable housing

The tax would probably need to be gradually increased as it would likely cause
a bit of crash on the housing market, say over 10 years.

There is an obvious lack of political will to carry out such a measure and I'm
sure that there are loads of unintended consequences

~~~
pintxo
Won’t work. Due to higher property sales taxes here in Germany, any building
complex worth more than a couple million is already owned by a shell company.
If the building is to be sold, they sell the shell company instead to not have
to pay property sales tax. Such a law would simply result in each building be
wrapped in a shell company.

------
manicdee
All you people claiming that the only way to reduce housing costs is to build
more housing are missing the other only way to reduce housing costs.

Remember, there is not only supply but also demand.

We need to reduce population growth to below zero. A sustainable world
population is probably close to 0.9B, far less than the current level of about
9B, and significantly less than projected “stable” population of around 11B

Current world population is expansionist and we are down to less than 300
years worth of phosphates, with no plans to reclaim phosphates from the ocean.

~~~
mdorazio
That doesn't work because it's not only general population growth that's
driving housing shortages in cities, it's that people are moving to popular
cities from less popular places. San Francisco doesn't have a housing problem
because too many people had babies in the last 10 years, it has a housing
problem because way more people want to move to San Francisco from other US
cities than it can support.

Another way to think about it: Japan's population is flat or declining
depending on the stat you look at, but Tokyo is still increasing in
population.

~~~
manicdee
Is Japan’s population currently 1/10th of its peak?

------
sudoaza
Yes, housing is a right not a speculation opportunity. Also there should be
opportunities for people to get their own houses, like cheap credits with a
monthly payment close to the rent.

~~~
alasdair_
>Yes, housing is a right not a speculation opportunity.

Let's say I agree with this idea and let's also ignore the fact that by
stating it's a right, we are implicitly stating that someone else needs to pay
for it with their own money if you cannot.

If housing is a right, does that necessarily mean that housing in a specific
area is a right? I mean, I'd love a beachfront property in Maui but we can't
all have that.

If we build a few million houses in the middle of Kansas and tell people
"there is your free house, as is your right", is that enough? Or do people
have a right to a free house somewhere just because someone in their family
happened to be lucky enough to live in the same general area at some point in
the past?

People in the US are generally allowed to move where they want. If a place
becomes too expensive for them to live there, it's possible for them to move
elsewhere if they must. I can definitely see that offering help with
relocation could be good for society, and I can also see that having a mix of
different people in an area is also good for society, but ultimately I don't
agree that just because someone happened to pay rent at some point in the
past, they and their descendants should be granted a perpetual right to stay
in that proximate location forever.

~~~
uasm
> "I mean, I'd love a beachfront property in Maui but we can't all have that"

The person you're replying to is basically saying: "having a place you can
stay in, to keep you alive and going rather than homeless and broken, a safety
net in essence - should be a right". Your response: "but we can't hand over
free beachfront properties in Maui for everyone".

You're diverting the discussion ("but look at what communism did to
Venezuela"). This isn't about free beachfront properties or luxury homes in
Maui. This is about a single bedroom apartment with the most basic of
utilities for people that wouldn't otherwise have the money or means to afford
anything better: students, older folks, sick people, people that face
hardships.

~~~
erik_seaberg
This isn't just about having shelter, this is about having it _in Berlin_
specifically. Who is entitled to that? The answer can't be "everyone".

~~~
pell
So people with money are entitled to it then?

~~~
ghostwriter
There's no entitlement in trades between landlords and people with money -
everything happens on mutually beneficial terms. Landlords own property by the
right of their investment into it, which was also a mutually beneficial
transaction between them and the developers who built it and got rewarded for
their work.

~~~
pell
Yes, these are the rules of a free market. But if a society or a governing
body has additional priorities, rules can be added to such a framework. So, in
the end it actually is a question about entitlement. Is a landlord entitled to
rent to the highest bidder or not. I'm not saying I'm necessarily entirely
against this concept, but I doubt it should be the default situation.

------
smallgovt
I've always thought that the advent of self-driving cars will contribute to
urban sprawl and lower housing prices. I'd happily live somewhere with a 1 hr
commute if rent was $3k/month cheaper and I could get work done on the way
there and back with no distractions.

~~~
AdrianB1
In some cities 1 hour commute is from one side of the city to the center or
the other way around, not from suburbs to city. My commute is 1.5 hours per
direction inside the city, going out would take more. Also spending 2 hours in
a car, even self driven, is not the best way to spend your time. Otherwise you
can live in a RV parked in front of your office.

------
jillesvangurp
I've lived in Berlin for 10 years now. I moved into my place 10 years ago this
month and the rent would definitely go up without the rigid German laws to
prevent exactly that. By at least about 30-40% I would estimate. That's
walking distance from major landmarks like the Alexanderplatz, the Berliner
Dom, and the synagogue on Oranienburgerstrasse. I pay a lot by Berlin
standards but I live dirt cheap by any other standards. I don't know many
places in Europe where I could live this cheap and that centrally. Around 950
euros a month for an 85m2 place, including heating cost. Very nice deal. You
need to move quite far out of the center of most European capitals to find
anything similar and forget about it in the bigger ones like London,
Amsterdam, Brussels, or Paris.

However, that's not the point for the locals here. They've seen people move in
over the last decades, claim their public space, and as a consequence their
cost of living is going up like crazy and they are not getting a lot in
return. That sort of thing creates a lot of resistance. There are a lot of
people in Berlin that are not big earners. And only a few years ago they were
still getting awesome deals on huge places right smack down in the middle of
the coolest city in Europe (after 10 years, I know this is true). I had
friends paying less than 600 euros for a 100m2 place. OK, it was in need of a
bit of renovation but still. Of course that was never going to last. The same
place probably goes for around 1500-2000/month now.

IMHO, as a foreign contributor to the gentrification, a lot of the housing
shortage is artificial and it has a lot to do with the local legislation that
is designed to conserve the status quo combined with the fact that the local
government sold out early for way too low to big investors. At this point they
don't have a lot of control because they sold out. Also, this city is growing
like crazy and it has insanely high dept due to failed projects like e.g. the
new airport that was supposed to open in 2012 an will probably not open for
years to come.

So, they are kind of powerless to fix things and their political legitimacy is
based on an electorate that would favor draconian measures. So, obviously that
kind of thing is very popular with the locals. There's no money to build new
stuff and besides they've sold all of the land on which this would need to
happen. So, the next best thing is populist measures that don't actually solve
the problem but make it look like they are doing something.

There actually is a lot of land in and around Berlin. This city is pretty far
from other German cities so there is a lot of country side in all compass
directions. Also inside the city there is plenty of space. This city still has
less inhabitants than before WW II and the cold war (4.3M in 1939 vs, 3.7M
last year). Thanks to the cold war it is kind of very spread out with lots of
former no mans land, huge parks, etc. People strange to Berlin always ask
where 'the center' is. There's no such thing. And there are at least two areas
that could lay claim to that and half a dozen more that are probably more
interesting in terms of nightlife, culture and other things you would find in
most city centers else where. So, lack of land is not a problem in Berlin.
Constructing things on it is. And housing projects for lower incomes is not a
priority.

~~~
cheriot
> a lot of the housing shortage is artificial and it has a lot to do with the
> local legislation that is designed to conserve the status quo

Visit San Francisco for where this ends up.

------
voisin
I do not think this implementation is a good use of taxpayer money or
government effort.

    
    
      has developed a reputation for raising rents sharply by finding loopholes in Germany’s fairly strict rental laws.
    

This is the item the government should rightfully be attempting to fix. Not
acting as a market participant.

    
    
      In the meantime, the firm invests almost half as much as state housing companies do to keep its homes in good condition.
    

State actors regularly spend 2x-3x their private counterparts with the same
results. The difference relates to additional studies and more onerous self-
imposed tendering requirements that create no additional value for the end
user but allow the state to feel it has made decisions and spent taxpayer
money in a justifiable way.

------
AllegedAlec
There is a certain je-ne-sais-qoui about people living on the Karl Marx Allee
trying to stop a rich person from buying their homes.

From what I see though, the issue that started this is not that there are
people controlling too much property, but there is a group of asshole
landlords that use loopholes to increase the rent way to steeply.

------
moccachino
There is no need to put a hard limit, just an effective limit by having a
general wealth tax. Money flows to where money already is, that's inevitable
in a capitalist market economy. There's no need to change that, but
progressively bigger piles of wealth should be progressively higher taxed to
keep them in check, thus ensuring a competitive market.

Edit: I guess I should have known mentioning wealth tax would get people
nervous. But this is not about taxing your old grandma for her paid-off house.
This is about small but increasing percentage, starting at maybe $1M-10M and
really kicking in at $1B and above. You can then abolish dividend taxing
(that's only fair) and perhaps income tax altogether.

~~~
scotty79
Taxing general wealth would be enough if you just wanted money. But what you
want is rather change in the behaviour of the wealthy. You want them to take
away their money out of real estate market so that it does not inflate the
prices. You could achieve that through progressive real estate tax. This would
make holding and renting large amounts of real estate less profitable in
comparison to other things rich invest their money into. They would sell so
prices would drop and individual ownership would rise.

~~~
moccachino
I don't mean this specifically as a solution to expensive housing, just a
general solution to super disparate wealth inequality. The point is not to get
more money for the state (income tax could be abolished to offset) but to put
a natural negative feedback mechanism on wealth accumulation, instead of the
positive feedback mechanism that exists today and makes the uber rich own the
world.

~~~
scotty79
I don't think that the sheer fact of some people being incredibly wealthy does
much harm and it also can do some good. When the money lands in the hands of
rich people it essentially leaves the economy same way as if it was just
burned because they won't be giving that money back to real world economy
anytime soon. It just lowers inflation a bit so everything becomes a bit
cheaper than it otherwise would be.

Rich people being rich is fine. Them buying luxuries for their money or
gambling (casinos, stock market, startups) does very little harm and even some
good because some of their money comes back to other people and few of them do
something good with it.

The problem starts only when their money touches the parts of economy that are
shared by other people because they drive the prices up by buying large amount
of stuff and hoarding. Things like property or food or raw materials or land.
We just need to make those activities unprofitable for them.

~~~
moccachino
Sure, I've actually got nothing against rich people or even the idea of super
rich people. But the whole system is set up in such a way that if you're
wealthy you own the world and have to actively screw up to not get wealthier.
The system just needs a tiny self-correction mechanism.

And the problem with immense wealth is not raising inflation or anything like
that, that is market stuff that will correct itself. The problem is buying
your way into policy control, and people/corporations that are so powerful
that not even the law dares touch them.

~~~
rstupek
Robert Kraft may have to disagree with you on your last assertion that the law
can't touch rich people.

~~~
moccachino
The law won't touch rich people where they care, their money. Why are there
still tax havens? Why do corporations still make special tax exemption deals?
Why are tax loopholes not as aggressively fought as drug smuggling?

And even the case you linked to, very wealthy people are much less likely to
be charged with these kinds of crime as well.

