1. 29
  1.  

  2. 2

    Honestly… I just love stuff like this. Reminds me of a some scripts I wrote for job hunting when I first got out of college.

    1. 3

      Honest question - has rent control ever worked?

      1. 19

        The rent control thing is oh so terrible that almost everyone I know now pays less. A colleague’s rent was halved b/c they were basically ripping him and his family off. Why? Because they could. The law is good for the people of Berlin!

        The market has been a mess for many years, long before the rent control was put into place.

        1. 3

          Also, the Mietendeckel is causing many landlords to start to dump their Altbau units so they can shift their investments to cities like Frankfurt where it’s less regulated. This has personally benefited me as I was able to buy a nicer home than I expected with the budget I planned. So, the rent controls are also benefiting people like me who want to purchase a home for personal use.

          The recently constructed Neubau units that the controls do not apply to have exploded in price, which in turn incentivizes new construction, which alleviates the fundamental problem over time. It’s still the early days, but I’m optimistic it may turn out to be a big success at actually increasing unit availability.

          1. 2

            From various other anecdotes in this thread it sounds like the actual problem is lack of supply, and neither rent control nor no-rent-control alone changes that. “Old buildings are rent controlled and new construction is not” sounds like a potential solution, will be interesting to see what happens.

          2. 3

            This is the seen vs the unseen. I live in Berlin and now pay less. I also was unable to find a new apartment even though I looked for a year. There must also be many people who don’t have any chance to come to Berlin now because trying to get an apartment is like playing roulette (for everyone, not just for evil techbros).

            Maybe the Berlin government can just slash half the prices of everything tomorrow, we’d all save a lot of money that way.

            1. 1

              That has absolutely nothing to do with rent control. It was like that before, in fact it was worse b/c there were simply no affordable places. Now you may actually find one when somebody moves out.

              Now you have crazy high prices for everything build after 2014, before you had them for everything. I fail to see how rent control made that worse.

              1. 4

                No, it was not like that before. Rentable apartment supply has shrunk to 50% of what it was before rent control, and many of those just pretend to rent out and just decline every offer, waiting for the law to be struck down so they don’t have to honor 50% undervalued contracts. When I came to Berlin 5 years ago it took one day of going to the viewing of 4 apartments and I got one. Now I can’t find one at all.

                1. 5

                  No, it was not like that before.

                  I have been here since 2013 and then it was already not easy. People then already stayed in their places, if they were not part of the rich “IT crowd”.

                  and many of those just pretend to rent out and just decline every offer, waiting for the law to be struck down so they don’t have to honor 50% undervalued contracts.

                  There is a law preventing that too, unfortunately not followed up enough.

                  When I came to Berlin 5 years ago it took one day of going to the viewing of 4 apartments and I got one.

                  I am sorry that I have to say this, but if you had that many options 4 years ago, you are probably part of the problem that drove the rents up. IT people like us have a ton of money and may find things affordable that the regular old Berliner can not afford. Berlin was for a long time a poor city and still is not rich. The household income for Berlin was less than 21k/year in 2019 (I could not find newer numbers quickly).

                2. 0

                  It made it worse by causing (non-regulated) prices to rise even faster. https://twitter.com/andreaskluth/status/1366693336715771906

                  1. 1

                    Read more of the replies, the issue was that not all of the apartments were regulated.

                    https://twitter.com/darren_cullen/status/1366824878960173064?s=20

                  2. 0

                    I think you’re right that it means that there are affordable apartments again, but I think you’re missing the fact that it has also had a dramatic effect on number of available apartments.

                    It seems like a lot of landlords are choosing to not sign new contracts and/or just sell the units instead of re-renting them, so there’s been a 50-70% decline in number of new listings. So while there are affordable apartments again, there are just a lot fewer of them.

                    Maybe we just have to wait out the landlords until the Mietendeckel’s legal status is settled? It will be interesting to see how it plays out.

                    Is this better? I don’t know. I’m supportive anything to try to limit housing speculation. And I’m happy for all my friends with newly reduced rents. But for anyone who needs to move it makes life very difficult, and makes it a lot harder for anyone “new” to ever come to Berlin.

                    Sources: Personal experience trying to find a new flat in Berlin flat this year, and a (biased) Bloomberg article that translates a study that my German language skills are not quite ready for.

                    https://archive.is/l3i2w

                    https://www.ifo.de/publikationen/2021/aufsatz-zeitschrift/ein-jahr-mietendeckel

                3. 2

                  Really interesting to hear! I remember reading about the introduction of controls years ago and thinking it was a great idea, great to hear about it working in practice!

                  1. 2

                    This is interesting. Does it not create slumlords like they have in NY? Buildings where none of the amenities are properly maintained? If it takes up to a year to find a new place to live in Berlin, where do you live in the meantime? Do you have to plan every move with multiple months of notice?

                    1. 1

                      Sure, rent control absolutely benefits some people - the ones who are already renting.

                      The economic argument against rent control (which seems to practically universal in the economics profession, regardless of political affiliation) is that this benefit comes with huge costs to future renters & people in marginal accommodation, combined with a hidden drag on the wider economy. In other words, it’s not just a transfer of wealth from landlords to current renters, it’s also a transfer of wealth from future renters to current renters & one that carries huge economic costs alongside it.

                      Nobody seems to have tried Georgist land taxes instead of rent control that I’m aware of, which shows how much political power economists actually have…

                    2. 4

                      While interesting, probably not the best venue for this question.

                      ** Edit ** Actually, if you are interested in stuff like that, I would recommend checking out the urban planning subreddit. It’s got a pretty good community by reddit standards.

                      1. 4

                        Depends on what you mean. If you mean ‘subsidize renters who already have an apartment at the cost of landlords, people moving in and people moving around’, then yes, it works great. I’ve been looking for an apartment for a year and wasn’t able to find one. Many landlords won’t even rent out at all in the moment because they think the rent control is illegal and will soon be reversed.

                        As the article states, the solution to high rental prices is building more apartments, which is notoriously hard and costly in Berlin.

                        1. 3

                          it’s working great, except for tech bros that want to move in. Exactly as intended.

                          1. 2

                            How is excluding “tech bros” “as intended” working out for regular, working-class immigrants?

                            1. 5

                              it was already hard to find a new place for them, because the struggle OP is experiencing was the norm for working-class people targeting low-price apartments. They had a ceiling above which they couldn’t go while tech-bros could. They still can, but there’s just less offer for them.

                              On the other side, working class people that already had an apartment are shielded from price growth that was pushing them away or forced them to move to smaller and smaller apartments or rooms (generating even more competition at the bottom).

                              In the movements that created political support for this rent freeze there are many organizations of immigrant workers. Due to corona I haven’t had contacts with them in a while, but I guess they are happy of their victory.