- The supply of rental apartments dropped by 40-60% after the Mietendeckel came in effect. It became even harder to find an apartment in Berlin. Landlords were holding their breaths.
- The supply of housing for sale also dwindled. If I'm not mistaken, sellers were waiting for the court judgement to rent/sell.
- The Mietendeckel also concerned furnished apartments, although it was largely ignored by landlords on short term furnished flat platforms like Wunderflats. The platforms turned a blind eye.
- I know many people who got significant reductions, sometimes exceeding 20%.
- In most cases, the new rent contracts with reduced rents had a shadow rent clause in case the Mietendeckel got repealed. Many people will have to pay the difference back within 14 days.
- The Mietpreisbremse, and earlier rent control measure, is still in effect. It does not include the rent freeze, but it does include significant rent reductions. Unfortunately, it's not automatic (no threat of a fine), and often needs to be enforced in court. The court judgement is retroactive to April 2020.
This is all I know/remember.
In the majority(?) of cases it did not work.
Landlords found absurd ways to work around it. Many not necessary fully legal but only in a way that if no one who is "hurt" by it sues the state can not act.
There where enough people which where open to pay the de-facto increased "not so legal" Rent, and as such would definitely not sure.
A common trick was to pair the rent contract with Renting some token furniture for completely unreasonable (and as such somewhat illegal/moon-) prices. (note: this wasn't the same as the rent prices for furnished apartments exception thingy mentioned by others)
Again if both renter and rentee are happy with it there is nothing which the state could have done.
Also more apartments where sold instead of rented out, in turn decreasing the amount of rente-able apartments while the demand did change (maybe except due to COVID, I would have to look it up). Furthermore it's not uncommon that such apartments do not enter the rent pool again even if the person in question leaves Berlin (and then illegally perma rents it over RBnB to tourists, or keeps it empty or resells it or ...)
Lastly due to majorly increased renovation costs (as far as I know) and now rent caps it was basically much less likely for any new apartments to be added to the pool. And even (potentially necessary) renovations of existing ones was much less likely done (as far as I have heard from people involved in that business, through not the very big players, but it matches the experience other cities which did impose rent caps had).
And just to be clear Rents in Berlin reaching a point where it's problematic for many people from Berlin to pay them IS a massive problem. Just that this law as far as I can tell would not have solved it and maybe even made it worse. Also yes Rents had been unusual low in the past (I'm personally profiting from this) but now they have gone beyond any reasonable price in many cases (at least in context what many people earn in Berlin).
That's a problem with the Mietpreisbremse, but not so much with the Mietendeckel, which also sets limits on furnished flats. You also can't just throw in an IKEA BILLY shelf and call it furnished (in the words of my lawyer).
> Again if both renter and rentee are happy with it there is nothing which the state could have done.
Landlords will cheat, and clients will do everything in order to get an apartment.
I've seen rental appointments with landlords, with 30/40 prospective clients, and I've always wondered if price is really the problem. I've even done a sort of test, and offered more than requested - and it didn't work.
Observing so many people competing for housing, intuitively makes me think that the housing problem is not of economic nature (but I suppose that the situation is complex).
also they didn't rent out a furnished apartment, they will rent out a apartment and you will rent some overpriced furniture independent of the apartment from a 3rd party. It just "happened" that you sign both at the same time and that the same person (through proxy) profits from both.
While this still is illegal, it's to a point where even if the renting person tries to sue it likely would not be a super simple case, i.e. would take time.
And then if you agree on it why should you sue? And if you rant and then sue are you not afraid on ending up on secret illegal but unpreventable black list making it harder to find a apartment or gain a incorrect but still very troublesome Schufa (credit scoring) entry?
The problem is often phrased as people renting out apartments for moon prices.
But that's not the case, they rent them out for prices which are paid in many cases.(Also cost for renovating/building nearly doubled in the last ~10y for smaller property owners.).
The actual problem is that the people living in Berlin since a long time (potentially birth) don't earn enough to continue to do so. It's not that there aren't people paying and therefore there are a lot of empty properties (ok in some areas that happens too, in Berlin less so).
- furnished aparthotels are something special and they got an exception from the state (because some providers are state owned)
That's exactly what they are doing at a few places in my city (also with a massive housing problem).
We recently found a new apartment here, the process was as follows:
(1) We found the apartment online. It was online for exactly 6 hours, listed by an estate agent.
(2) Inside the listing (hidden deep in the description) was a short sentence saying that any contact made through the listing website contact form would be ignored and that a secret mail address had to be used. You had to email an application letter (preferably with photos), copies of your latest 3 salary statements, copies of your identity card, proof of your credit-worthiness ("Schufa-Auskunft" in Germany), proof that you had liability insurance, and contact information of previous landlords. This had to be mailed until a deadline the next morning. If any of this was missing, the application would be ignored.
(3) A week later, we received an email telling us that we were eligible for an appointment to visit the apartment. But we had to confirm this until the same evening by sending an SMS to a secret number.
(4) A few days later, we indeed got a date and time for visiting the apartment (via SMS). It was a 15-minute slot, but there were at least 10 other families there, and they did visits the entire day. When the agent asked us, we indicated strong interest, told him we could rent the place beginning tomorrow and left.
(5) A week later, we got the apartment (of course we now have to pay 2 rents for 3 months). When we asked him why the process was so complicated, he told us that they were only 4 people in the agency, and they didn't have the capacity to read (not answer!) > 1000 mails of people interested in the apartment. So they gradually came up with various hoops and obstacles to get this number down to something manageable (they got it down to around 50 families who indicated final interest).
BTW, 10% of these data collecting advertisements on the real estate websites are from identity thieves.
There's no easy solution. Everyone puts the blame on the landlord saying they should be careful who they rent to, but that's difficult to do without doing some kind of background check on tenants and can also lead to discrimination.
Because that's illegal, even without the rent cap in Berlin.
It's illegal here to demand a rent more than 10% higher than the "ortsübliche Vergleichsmiete", which is approximately the local rent averaged over the last 6 years (exactly defined in §558)
More generally, you cannot simply ask for astronomical prices for anything in Germany just because you know that people are in a position where they have to pay them, that's "Wucher" (racketeering) and against public decency, which is generally illegal according to §138.
Another one is vague and based on the "Mietspiegel", which lists appropriate rents according to quality and location.
If the rent exceeds this by too much, you can sue for "Mietwucher" (rent usury).
Berlin had the nice example of a few square kilometers of the Tempelhof airport field being available. Public demanded to make it a park instead of constructing housing.
Almost anything with a tree on it is impossible to build on, and even if there is a building permit for the housing, attaching it to public transports like the S-Bahn or Subway is next to impossible nowadays.
Building codes in Berlin are not much weirder than in the rest of Germany, but they also serve to make constructing housing harder. E.g. there is a strict limit to building height, which limits buildings to 5 storeys (iirc) even in high-demand high-density areas.
Money is especially tight for the state of Berlin, while they get subsidized with lots of money from the other states (Länderfinanzausgleich), they still cannot afford to construct much of the necessary housing or the associated infrastructure themselves. Private investment usually will go elsewhere because the political environment in Berlin is poor. If there is rent control in Berlin and no rent control in Hamburg, of course money will go to Hamburg first.
There is also no political will to fix the above.
What I think is a bigger problem is the countless vacant lots all over the city. Even centrally there are tons of them, e.g. with only a one story supermarket or parking lots (as mentioned above) or sometimes it’s just overgrown. I wonder what the deal are with those. My guess is that the city already sold them in more dire times and now owners just sit on them until the real estate prices makes the time ripe to build something there. Can’t find another explanation for it.
EDIT: not only rental apartments of course but more housing in general.
A second step would be, to make sure that rental housing is used for that instead of AirBNB or any other investment. It would also help to reduce land transfer tax if someone then lives in the bought flat. Speculators and builders anyway get around it in the long term by founding businesses that buy apartment blocks (pay the tax once) and then later only trade the shares of these businesses.
And last but not least, they should stop to discuss dispossessing property. It does not solve anything but wastes time and energy.
In the 30 years since then, the most they've ever managed is 30,000.
It's not in private landowner's interest to build cheap social housing. It reduces rents, it suppresses property values. So they don't get built.
If they do build anything, it's in their interests to build luxury apartments. They make the most money out of those. I know little about Berlin's housing, but by any chance would there be a lot of expensive apartments being built?
Did something similar happen in German history? You'll probably find all the big landowners in Berlin and Germany lobbying very hard to make sure nothing like this ever happens.
I'd prefer those over public housing very much because only with them, the interests between the renter and the landlord are aligned, and they're not part of the state and can therefore not be used (or sold) by political decisions.
* Typically in Germany, social housing is built with a time-limit built in: after X years, the house falls out of the social housing program and can be rented and sold freely. At the moment, a lot more houses leave the system then are added.
* Many cities sold their real estate after the financial crisis to give the money to the failing banks. I.e. Berlin is super-broke, in parts because of a big banking scandal of the previous government.
* In Munich they have a pretty decent system: anyone who develops land had to keep to a certain split of social housing, middle income housing and free market housing. They use the land they own and their powers over zoning to enforce that.
Profit is just an emergent form of social compensation for addressing a shortage. That society enacts laws to prevent the profit motive from working, and incentivizing socially beneficial behavior, is a tragedy.
As far as I know, it's a widely discredited theory, never based on any actual studies.
Or politicians are corrupt and Thatcher is a good excuse. Take your pick.
On top of that, the Conservatives made an election pledge to build 200,000 starter homes in 2015 election and apparently failed to build a single one. It's easy to claim you'll build houses and then do nothing, like it's easy to claim you'll reduce immigration but it just keeps going up.
The last election in 2019 was mainly about Brexit and the general public's perception that Corbyn was unsuited to being the Prime Minister.
(I might be wrong but) if I had to bet why councils could build more places it's that they would have a streamlined approval process with councils (denying a social housing project would look bad) while the private developers have to follow the mood of the deparments and several "appeals" and "NIMBYs" (same as in the US today)
But a new "luxury apt" opens a place in a slightly cheaper property.
This is already in place. Berlin is very strict about apartment usage. Once a unit is designated as a living space, it's very difficult to get a permit to use it as an AirB&B. Also if you own an apartment, it's illegal to leave it without a tenant for an extended period - I think 90 days is the maximum.
Those standards obviously have their benefits or are unavoidable (fire protection) and result in new housing being high quality. But they make it hard to address housing shortages in a non long term way.
I don't think the city is giving out new building permits for this type of stuff, and many of those markets have either been there "forever", or have been built after the reunification (and in the 90's city planners were expecting that the city would shrink further, not grow).
Concerns about being able to afford rent not just now but in the future is a major concern for a huge chunk of the population. They look at what happens in other large cities with rent prices (be it Munich, be it Paris, be it SF) in fear.
Berlin itself uses an unofficial slogan of "Arm aber Sexy" ("poor but sexy/attractive"), coined by a former Berlin major referring to the budget of the city but adopted by the population to mean the people living there as well. They fear that driving out poor people - including themselves - and turn it into yet another place for the rich, and/or fear "over-development" will destroy the character of the city (and the ecological consequences of such developments; the Green party is big in certain parts of Berlin).
I can see that with my sisters, who have been living in downtown-ish Berlin for a long time while "poor" (think student, almost-unpaid intern, unemployed), and who constantly complained about the rents (that my parents and later welfare paid) and scarcity of available apartments, but at the same time were e.g. very much against any plans to develop the large area of the old closed Tempelhof airport, where all plans to develop that area were abandoned after multiple public referendums decided that the area has to remain a "park". That alone is 12km² of now entirely unused space close to the heart of the city, space for about at least 50000 people considering Berlins current population density of 4118 people per km². Or develop only half of it, and leave 6km² and that's still a ton of new apartments. But nope.
Similarly, minimum wage is typically bumped after inflation already made its way, so most of the people are over the threshold anyway and won't be thrown out of their jobs. And those who will — are valuable voters who can be made highly dependent on state unemployment programs.
Either way I would say housing in Japan (considering all the constraints) seems to work great.
No. Very little. Just read articles over the years saying they are facing similar issues of real-estate bubble and speculation and that prices in Seoul are getting close to those of New York.
The capitalists instead decided to optimize for steadily increasing the price of housing by restricting supply, so these are now primarily seen as an investment with nearly-guaranteed returns, rather than places for people to live.
Or "magic coin-shitting machines", as Charlie Brooker so pithily put it.
Empty ugly spaces (not Parks or Public squares) are a symptom of a lethargic bureaucracy, not a healthy thing.
To be fair, construction work in Berlin is super slow.
All in all, while some politicians may have suggested that the Gigafactory is an example of a fast project they made possible, they no longer do so. Because actually it is a perfect example of everything being regulated to death, dog-slow bureaucracy and crazy risks you have to take as a business if you want things done fast. Where "fast" is still slow compared to the rest of the world.
No housing construction will ever go to the lengths Tesla did in terms of risk for a fast construction. Housing investment is notoriously risk-averse in any case.
Public construction on the other hand goes with the cheapest bidder, so doesn't pay that well. Also, the state will only pay after a lengthy process of inspections and trying to find something wrong with the finished building. So lots of companies just avoid public bids, because they cannot afford to finance all the materials and work pay for the duration of the build. Those that can afford it are companies that specialize in public construction sites, usually designed to be able to go bankrupt at the first sign of trouble.
Generally, in a public construction site, all contractors are lowest bidders. Some do intentionally bid lower than cost to get the contract. What they then try to do to recoup their cost is to try to find some problem that wasn't spelled out in the bidding, or to wait for some change of plans or regulations. Because they then can bill a lot more for the additional work and material necessary to fix the problem, or hold up the construction site in lengthy court proceedings. Because everyone knows that something like that will happen at some point, they intentionally go as slow as possible, waiting for the order to drop everything and wait for the courts. Because if they are quick and invest a lot of work and material, they might not survive the delay.
In my opinion, compared to other countries things that would be built within 8-12 months take 2 years.
This is a constant discussion in Helsinki, too. I think it's better to build expensive if that translates to good locations and high quality.
Institutional investors have higher expectations of return of investment and are more likely willing to forego a small rent in the hope for a larger future rent. They have more deep pockets.
And on top of that, expectations from an international market, which Berlin did not match. Investors are expecting that to change in the long run.
And the funny thing, with a limited supply in housing and an increase of investors with such a behaviour, it is a self-fulfilling promise.
The number of empty apartments in Berlin is hard to guess. Not an expert in that matter, but from a quick search, the number is anywhere between 0.8% and 2%.
Yes, it is important to have apartments empty for some time, so people can actually move, but as I understand, that is excluded from those considerations/statistics. We are looking at apartments which are empty for more than three months (which is theoretically illegal in Berlin).
Keep in mind, what I wrote about investors is what I heard from people living there complaining about. So more a reflection of the emotions there, then necessarily factual.
> At some point in the chain that means there's cheaper housing available.
Not at all: if you tear down a cheap apartment and replace it with a more expensive one the overall availability of cheap apartments decreases.
In The Netherlands there are actually quite a few people that don't want to upgrade from cheaper social rent housing to more expensive private rent housing. These people are called "scheefwoners", which to a Dutch person's ears make it sound like it's almost a criminal activity:
> Scheefwonen is a term that is used in the Netherlands for the living of people in a rental home despite their income being too high for that. So the tenants have an income that is too high for their type of home, so that they actually pay too little rent. With a given housing stock, the downside is that there are people who live in a rented house whose rent is high in relation to their income, which is undesirable for the residents themselves and / or socially in connection with the housing allowance. It can also play a role that the rent is low compared to the characteristics of the home. The Key Publication on the Dutch Housing Survey “Living in Unusual Times”, published in April 2013, showed that the number of households in rental homes with a rent below the deregulation threshold and an income higher than € 33,000 in 2009 was approximately 790 thousand.
Of course these people might have pretty good reasons why they prefer to keep living in cheap social housing. Perhaps these people want to save/invest more of their income, perhaps they like their neighbourhood or perhaps private rent housing is just too expensive. Either way, I feel it's wrong to say that these people "pay too little rent based on their income". That almost seems to suggest a certain percentage of income should be spent on rent or mortgage, whether one chooses to or not.
Again, this problem could be easily solved by just building more houses, but this is also very difficult to achieve in The Netherlands, due to ground speculation by municipal governments and a plethora of rules that a builder has to conform to when building new houses. This, combined with an average immigration of around 400-500 migrants a week means that for the next 15 years or so I don't believe this problem will be fixed, maybe not even in 30 years, unless some major policy changes are introduced. This situation is good for rent-seekers though, they will be able to ask a premium for a very long time.
Building more is definitely the wrong solution to housing. Just remove the capitalist vampire landlords making a profit on basic human needs, and let everybody enjoy free housing for life!
EDIT: Corrected stat.
EDIT2: Funny to see people downvoting without argument. Are you all against Article 25 of the Universal Declaration of Human Rights, stating "Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services" ?
- How tedious will it be to find suitable tenants (do you want to go through 1000 emails)?
- Will they make a mess of the place?
- Will they call you at random times to complain about neighbors?
- Will you have to organize and deal with mechanics when e.g. the heating breaks?
And so on. If property prices go up x% per year, buying housing is a great investment even if you leave it empty. And yes, this is a serious problem in larger cities, where investors (domestic or even foreign) just buy up housing without any intention to let people live there, exacerbating the problem.
To be clear, I am just a tenant, but the above incentives for investors are straightforward to see.
Because then you get the property price gains and the rental income on top!
I don’t doubt this is happening, I’m just trying to wrap my head around it.
Rents are so high BECAUSE there are empty housing units. If all available housing units went on the market, rent prices would collapse along with the real-estate speculative bubble, which is precisely what landlords are trying to avoid.
People can't live without housing so demand is not elastic. Plus the housing market is special regarding spatial location. Applying regular market rules as if the housing market behaved the same as, say, the screwdrivers market, does not make sense at all.
The private investors won't do infrastructure either - it is expensive - so they want to build where the infrastructure is already in place. So that's why we see trying to increase density.
So the zoning rules are there as a conterweight to this.
In any case, my point is that applying market rules to housing does not make sense, it's not a competitive market at all and never can be.
So my bad for giving a wrong number the >1 million is in fact 3 millions for the whole of France (~8%). For Paris it's "only" ~240000 (according to 2019 paris.fr numbers) which is on the scale of one empty apartment in the heart of Paris for every mishoused person ("sans domicile fixe") in the whole of France, according to official statistics (which may be too optimistic on the number of mishoused people).
According to INSEE (official statistics), between 1990 and 2015, population has grown 0.4%, housing units have grown 1%, while abandoned housing units grew 2.8%. Now may be a good time to say that secondary housing (vacation houses for the privileged elite that can afford it) is NOT abandoned housing according to these stats.
Exactly. And the Mietendeckel caused new construction to essentially stop completely. Way to go!
"16.03.2021: Heute hat das Amt für Statistik Berlin-Brandenburg die Baugenehmigungszahlen für das Jahr 2020 veröffentlicht. Die Zahl der Baugenehmigungen sank in Berlin das vierte Jahr in Folge."
And the effects already started in 2019, when the law was planned:
In 2019, in anticipation of the Mietendeckel, the decline became significantly steeper.
Several large companies announced that they were halting all new construction and renovation projects.
At the same time, inventory has practically disappeared. So instead of "unaffordable" housing for new tenants, we now have no housing for new tenants. (Existing rents were already protected).
 Berlin is still cheap compared other large German cities and certainly compared to most capital cities of industrialised countries or places like SF. It's just not quite as ridiculously cheap any longer.
The problem is: Berlin can't. There is not much free space for new construction in Berlin proper, with the exception of "Nachverdichtung" such as you propose with apartments over parking lots - and these have the downside that they are horribly expensive, simply because it costs potential developers a lot of money to acquire the land!
The solution would be to build out internet connectivity and public transport in the suburbs in Brandenburg so that employers don't all concentrate in Berlin.
A city should be worth it to live in and provide enjoyment for the citizens, not be a glorified chicken coop for people.
Otoh sprawl development leads to dead neighborhoods, car dependence and long commutes. It also uses space that could be left to nature instead.
There is a middle way between US-level sprawl and Japan-style chicken coops - and I definitely hope we don't go the Japan route.
Here in Prague we have quite a few brownfields that could be home to at least 50 thousand people (Rohanský ostrov, Bubny, Kolbenova), but the development is extremely slow.
Well having some undeveloped space is actually quite nice to enjoy in a city. We don't have to live packed narrowly on top of one another.
But more specifically, brownfields (previously-industrial spaces) are usually highly polluted. Some are full of heavy metals and chemicals that you really don't want to displace into the air by digging into the soil... Some people are doing it, but it either costs billions of euros in depollution, or greatly affects the health of nearby population, and often both.
It required several years of sanation works to clean up, but now it is built over and serves the needs of the population. 
I believe that this is a reasonable use of public money, even though private developers profit from it. Or possibly finance it through a Public-Private Partnership project.
The alternative is to let poisoned land within borders of a big city stay poisoned forever. Which does not sound either people- or environment-friendly.
From what I understand it is very difficult to do something with that space, either because people refuse to sell or because of bureaucratic red tape.
What's wrong with that? Enjoy the little green space you have left while it lasts. Have a BBQ with friends over there, maybe? The gentrifiers/developers won't be so long to remove every last bit of green and freedom in your neighborhood, as they did everywhere else.
...The high housing prices.
It is illegal to keep an apartment empty for more then three months. So if you are aware of any empty housing, feel free to denounce it (https://www.stadtentwicklung.berlin.de/wohnen/zweckentfremdu...). In 2018, 1,9% of the flats in Mitte were subject to an ongoing official procedure on those grounds. The owner can simply claim, they are reforming, but I presume there are limits to that too.
How many flats are really empty is unclear.
I've read that according to the Senat,
- there is an estimated 0.8%-2% of the flats unoccupied
- down from 3.5% in 2011
- ideally, it would be between 2-3%.
The Taz is not particularly strong on keeping opinion from facts separated, but that's where I got it from: (https://taz.de/Spekulativer-Leerstand-in-Berlin/!5749397/)
Two things: I think you put too much value to Friedrichstraße, and likely Mitte in general. It is the physical and historic city centre, but that doesn't have the same meaning as it has in other cities.
Second, in many parts in East-Berlin, you have a unclear ownership of houses and ground with competing claims.
People have been disowned by the Nazis, Soviets, or by the GDR. The families have gone into diaspora and are partly spread over the world. Random people may have moved in and layed their own claim.
The ownership is unclear and spread. And it is a battle to lay claim to your _part_ of ownership. The ground is gaining worth over time. All ingredients, which do not expedite the development of land.
Here is a little personal anecdote: I used to live in the center of Berlin Mitte when I was a student, had rented a Penthouse apartment for 450 Euro/mo incl. additional costs (but without water, gas, electricity). It was affordable. Then a Bavarian multimillionaire bought the house from the original owners. I was already abroad most of the time, so I didn't experience the loud works his people conducted to get old renters out. However, he did cut off my telephone cable, something the phone technician realized when I returned and was able to fix.
Later he threatened to build a balcony - "and this might take a long time" - unless I agree to pay a higher rent. The classic ugly move. I negotiated with him for a while and in the end the raise was not so bad. However, I realized that I have to get out anyway - he wouldn't stop until I'd have left, you cannot fight a landlord with evil intentions in the long run even if you're a member of renter protection like I was. So I left Berlin and never returned, not even for a visit. I never asked but would estimate the same apartment at around 1600 EUR/mo today, with an ever increasing tendency.
Now I live in another country, ten years have passed, and the same happens in the city I live in. Rents are rising continuously, I've already seen people photographing the houses in our street, several of them are being totally renovated, new apartments are always "luxury apartments" as if any local could afford these (it's a poor country, ca. 800 EUR average income), and an agent from Sotheby's Real Estate rang my doorbell recently to ask if I'm the owner of my apartment.
You cannot escape this trend unless you want to live jobless on the countryside. I'd buy an apartment like most of my colleagues if I had the money, but it would mean having liabilities for the next 20 years and I only have time-limited contracts in Academia.
It's frustrating to know there is a real risk I'll have to spend my later years in the most ugly suburbs and slums of an otherwise beautiful town, even though I have a rather decent salary in local terms, while most of these houses with unaffordable "luxury apartments" are bought by foreign investors. By the way, many of the new apartments are empty, apparently only serve as investments.
And rents rising as a city becomes a more desirable place to live just makes perfect sense. If you are convinced that this will happen in your city maybe now would be a great time to buy a place?
Did you miss the part were they explained they can't do it because they only have a temporary assignment? This sounds a lot like "just be rich".
The reality is that a lot of people simply cannot afford to just "buy a place". According to some statistics , 40% of Americans (i.e. a "rich" country), are just one missed paycheck (or unexpected expenditure) away from homelessness. If you belong to the 60% that aren't and never experienced the situation, I understand how foreign the concept might seem to you.
This is not true. The cap didn't apply to new flats. Which means that nobody wanted to invest and build new housing, but instead created artificial scarcity, there are a lot of empty buildings now because very few people can afford some of the abhorrent prices.
So yeah supply and demand totally worked. /s
The very opposite. The market optimizes for maximum profitability, not for maximum savings for renters or best quality of life.
There's a reason why governments have been building cheap housing across the last 100 years in most developed countries.
That said, I'm not opposed to the government building cheap housing. I think that's actually the best solution to an undersupply of housing.
You are simply rehashing the idea that free market is holy and magic. Instead, housing is inelastic. Also, apartments are non-fungible goods.
Furthermore, they have a ton of externalities. (e.g. access to transportation, shops, workplaces, schools)
All of this breaks every assumption around free market theory. Unsurprisingly, governments intervene heavily in the housing market almost in every developed country. The only exceptions lead to a combination of slumslords exploiting the poorest people and gated communities for the wealthy.
Housing is not inelastic at all. Economists have studied the effects of laws reducing land-use rights, and have found they impose massive social costs, in the form of less housing construction, that leads to less affordable housing.
You mean that decreasing housing supply correlates with increasing price?
Because that's exactly what inelastic demand is: https://www.investopedia.com/terms/e/inelastic.asp
Not everyone can just buy a place, if rents keep increasing only rich people will be able to afford living in the city, you need a lot of non-rich people to actually run the city though: cashiers, nurses, teachers, firefighters etc. It's not that easy.
The market forces you refer to are fictitious. What happens in reality is that the middle class is dwindling, there is an ever increasing divide between land and house owners and mere renters, and at some point in the more distant future the whole system will break down.
This was artificial though, as landlords were waiting to know the outcome of this ruling. It's not like the apartments just vanished from existence.
The rent was not too low, it was perfectly okay for the previous owners and I can assure you they did not lose money. They made enough money to pay a company full-time to take care of the building and relations to the renters. They merely earned normal amounts instead of seeking a 1000% return on their investment like the guy from Bavaria. There are greedy and fair house owners, it's as simple as that.
The same is happening in my city (Baltics) too. We bought a new apartment 5 years ago in the city centre, at the time we paid €2250/m2 which was quite a lot. Now I'm seeing the standard price for new apartments being double that. The typical salary here is around €1000/mo, so these apartments are completely unaffordable to most people.
We were actually looking to upgrade (as we have a 1br apartment and now a kid), but we wouldn't be able to afford to buy a bigger apartment. Instead we bought land and are building a house on the outskirts of the city. We got lucky there too, as we completed the purchase right before COVID and apparently land prices have gone up a lot now.
You can still find barely affordable (usually older) apartments further out of the city, but if you want to live anywhere close to the centre you need to be earning a salary a good few multiples higher than the average.
 Thats for the country as a whole, but salaries vary a lot in different regions, so maybe for where I am it's higher.
Then there is a massive indiscriminate sellout of property to very rich foreigners. In some top locations you hear more Russian than German in the streets.
Otherwise, in the lower segments there is enormous pressure from refugees, who get government aid while low income Germans do not.
The people who decide everything (Red/Green party) most have cheap apartments that they got 20 years ago. They don't suffer from their own policies.
The part about hearing more Russian that German doesn't ring true to me, and reeks of xenophobia. Doubly so for the non sequitur quip about refugees.
34 hectars (>90 acres) of waste land in a prime location can't be bulldozed to build 2000 new apartments because a rare species of toad was found to be living there, which can't be relocated because no state agency is responsible. The court case has been running for over 10 years!!!
Today I'm leaning more towards - "so what?".
As long as there's obviously enough space to waste on detached houses and land speculation in the middle of the city, it can't be all that bad.
If it was really such a big deal, "someone" would've paid "somebody" already to relocate the animals "after business hours", if you catch my drift. There's more going on behind the scenes for sure that we just don't know about.
It could be argued that they are - both indirectly (by electing the representatives that do make the decisions) and directly (by lack of [legal!] activism for their cause).
It's a case of pointing fingers instead of lifting a finger.
edit: what I mean by that is votes and protests do matter as does providing reasonable alternatives. I see that happen way too little in Germany. Try something in France and they set half of Paris on fire each time; not that I think that's better, but at least it shows that people actually care.
Doesn't work, the next thing that will happen is the tree-huggers (B.U.N.D. and others) will get public money to re-establish the population and impose stricter protection measures. In Germany, the environment gets far far better protection than the people.
So how come Glyphosat wasn't banned immediately then? How come nitrate in drinking water goes up  and treatment becomes ever more expensive while at the same time industrial livestock farming still gets heavily subsidised?
German politics still bends a knee to industrial farming, chemical industry, and heavy industry more than the environment, don't fool yourself.
There's a reason the insect population has decreased by over 70% in the last 3 decades . All because the environment is top priority, I presume.
The reality is that still no-one cares and the few things that are being done (tunnels and bridges for wildlife to cross roads, relocation programs for endangered species, etc.) are blown out of proportion by critics while the big picture looks bleaker than ever.
FYI there's ain't going to be many trees around for the "tree huggers" to hug in a few years if things continue to go the way they do . But yeah, it's all to easy with the us-vs.-them instead of tackling actual roots of the problems...
Which is it?
Ultimately the owner/investor either has to find a way to move the toads or apply for an exception. Without an application, the state government can’t act.
Shorter press release (German, too): https://www.bundesverfassungsgericht.de/SharedDocs/Pressemit...
It's a classical application of the "federal law breaks state law" rule, which I think exists in the united states as well.
There are various categories where the states or federal have the power to enact laws. In this case, it is part of the competing law section: As long as the federal government has not provided a conclusive law on the topic, the states may make their own laws. For renting there is conclusive law, so states are not allowed to make new laws regarding the topic.
The phrase "Bundesrecht bricht Landesrecht" is even part of the German constitution, as Article 31.
1. Build more housing on land that is already owned by Berlin State
2. Increase the amount of housing support available to low income families
3. Prevent the migration of social housing units to the private market by extending existing contracts.
4. Close loopholes in the Mietpreisbremse that allowed landlords to dramatically raise the rent after renovations.
5. Block NIMBY movements from preventing the construction of housing projects
6. Fund the court system so cases can be resolved in less than a decade.
7. Increase the minimum number of social housing units in new developments to 50%
Taxing unoccupied properties could help to ensure existing properties were actually used and not just held empty by speculators.
But yeah, the main solution is building stuff - I think we need to build residential skyscrapers in the West like they have in Eastern cities, otherwise the urban population densities we are arriving to are unaffordable for most citizens.
This won't work, as investors can hire people to live in the property and it will make it more expensive as a result, as someone will have to pay for that extra admin.
Unfortunately, many rent contracts had a "shadow rent" clause - a higher rent they'd have to pay retroactively if the Mietpreisbremse was repealed. A lot of people are about to get a really big invoice they have to pay within 2 weeks.
Fortunately, the Mietpreisbremse is retroactive back to April 2020, so you can start the process now and get a refund later.
Your action plan should be the following:
1. Use a Mietpreisbremse calculator to check how much you are paying
2. Contact your landlord, either alone or with the help of a tenants' union (Mieterverein)
3. If that fails, use a lawyer, or a service like Wenigermiete. If it get this far, the resolution will generally take around a year. This is the average resolution time.
I have worked directly with Wenigermiete. They explained the situation to me just last week, but they expected the court to resolve the case in July, perhaps even later.
Also, for many people in Germany buying e.g. a single apartment is an investment for their later retirement. It's not all big and evil real estate companies.
Something tells me governments are also interested in real estate prices going up.
Housing situation in London is so fucked
Housing situation in Spain is so fucked
Housing situation in Canada is so fucked
I'm not an expert, but I see a pattern there...
New Zealand banned foreigners from buying property.
Among Brits, there's a (small) trend of retirees going off and buying a French Chateau and doing it up, because the cost of doing so will be the same or cheaper than buying a very modest place in many urban areas in the UK. This is spurred on by a popular TV show
I'm not sure what the answer is. More construction, rent controls and banning foreigners from owning property, none of it seems to really fix the problem. Construction is often too slow, rent controls can put in place conditions for landlords neglecting properties, and banning foreigners will bring other problems too.
So demand for big-city-housing is rising permanently. This wasn't as much of a problem in the last decades. But then, central banks flooded the market with cheap money, making most "safe" investments unviable. Therefore the only "safe" investment left is real-estate which also drives up prices in addition to the increase in demand.
And here we are.
How do we fix it? Get central banks to stop printing cheap money. No idea how that will work out, because it also has other consequences beside the housing market. And stop urbanisation, make the countryside more viable for industry, commerce, office space. Improve transport around the countryside and suburbs. Curb speculation by promoting home-ownership (for the home you live in, not the 20 you rent out) through tax incentives and other measures (currently, in Germany, you pay lower taxes when renting out a property than when living in the same property, because when renting it out the mortgage payments are "business expenses").
Housing needs to not be an investment.
Which - spoiler ahead - they won't. Cities will within a decade or two have lost their luminosity, with the giant shift towards remote work that is about to take place, in parallel with the wiping out of brick-and-mortar businesses. Prices will reflect this, sooner or later.
That's the question as those in power wouldn't want to suffer the consequences.
I made some great trips from Dubai - in Berlin now, every trip is a choice between crappy layovers or expensive airlines. There have been a few surprising exceptions (finnair being one)
But Dubai is not _entirely_ that repressed (believe it or not, you may date someone. (but technically, no sex outside marriage - didn't know anyone caught on that one though)). There were many caveats and "watch outs" for sure - the _general_ rule was "don't be a stupid drunk", "don't publicly insult anyone", "no overt PDA in public" and you were fine. Obviously that's not to everyone's taste and wasn't always uniformly applied.
Extremely profitable on the other hand is much more attractive to investors than economically viable. It promises short term ROI with great revenue and very low risk in overheated markets.
There's a balance to be struck here and thinking in extremes just isn't helpful.
And yes, I do consider buying up land and just letting it sit there until housing crisis becomes severe enough that developing luxury housing becomes profitable to be gaming the system.
It's funny how quick investors are to complain about something not being economically viable and praising the free market and its power to innovate, while at the same the cost of developing houses goes up and up and up.
Where's the innovation there? How come a portable supercomputer can be bought brand new for the equivalent of a day's worth of work today, while at the same time fewer and fewer people can afford to own a home?
Why hasn't the increasing demand for affordable housing spurred innovation in that sector and why is nobody even asking that question?
That being said, I'd say the situation sucks especially for older folks not owning their apartments. The generally higher educated post 1980 generation has it comparatively good.
I just take issue with such general blatant statements, things are never that simple.
This makes me wonder: is inflation calculated based on averages or based on medians?
Since I have to pay back the cummulative savings to my landlord in case the law is overturned(which happened today), I saved 100€ extra each month.
It's likely that I'll now have to increase my rent payment by 100€ and pay back roughly 1000€ to my landlord.
I'm happy I prepared for this situation. It's OK for me. However, I'm worried about friends that may haven't prepared...
>It's OK for me. However, I know others that will likely lose their flat now.
They won't just lose their flat. If they can't backpay the rent (thousands in some cases) their Schufa will be ruined which will make it even harder if at all possible to get a new place.
Damn, I didn't consider this but it's true. Usually, landlords also want a Mietschuldenbescheinigung to check if you have rent debt with previous landlords.
What upsets me about the situation is that I feel like some people are experimenting with my property/contract/living condition. I'd prefer if they could just leave me alone. It makes me feel uncomfortable and unsafe.
Unfortunately, this takes time, and people will be asked to give the money back NOW.