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Comment by sbenitoj | Hacker News Reader

It's also interesting that people genuinely believe this is going to solve the problem rather than exacerbate it.

There is nothing any politician can do to change the laws of supply and demand. If this district in Berlin is in high demand, they're not going to fix the "problem" of high rents by keeping the supply fixed.

The only solution to this "problem" is to let people build additional housing to increase supply.

Instead of keeping the same people in their current units, overtime what will happen is people who currently rent apartments in this district will start to sub-let their apartments to the people who are willing to pay higher prices, acting as a wealth transfer from landlords to current tenants. And yes this will occur even if it's made "illegal" to sublet these apartments (this exact situation exists in NYC with people who have rent controlled apartments and people still do it all the time).

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Ditto.

> "The only solution..."

I wonder as a thought experiment, if the city keeps buying more houses to fix the "problem", it might eventually become the dominant landlord, and then in order to raise revenue, it might find that it has to increase rents on its rent-controlled housing...

Sure, the city also raises rents when necessary. The cities real estate companies are expected to be profitable, just while keeping to other policies than "maximize profit". An option which is at least in Berlin is often offered to investors, but not always taken. (The city offers a guarantee to not interfere with a deal in exchange for concessions on how the buildings are managed, which allows to achieve the policy goals without having to invest itself. Private investors of course then often prefer other, more lucrative investments).

Keeping existing supply cheap is useful for the cities inhabitants, but additional demand has also to be matched to not make this a conflict forever (and Berlin has afaik a lower rate than other German cities in approving new projects).

Rent control is an instance of "chang[ing] the laws of supply and demand". If you need it, you didn't provide a solution. The "build, baby, build" solution would keep supply in line with demand, and prices would be stable on their own. Having rent control even if you don't need it (out of concern for long term tenancy security), you will just create a constituency with a vested interest in you not building any more.

Also, strictly speaking, building is not the only solution. Curbing demand by making the city less attractive would also be a solution.

Ha, you're right that making the city less appealing would also fix the "problem" (lower prices), and I almost included that in my post because strictly speaking it's true...but honestly I didn't want to give politicians any ideas!!

And there you run into the problem: "building more" and "making the city less appealing" are one and the same to a huge proportion of people.

"Why should I pay higher rents or deal with worse traffic/more crowded infrastructure just because you think my neighborhood is suddenly cool or because you're looking to stash a bunch of money in my country?"

Luckily, without constraints on supply and demand, those things will quickly balance each other out.

And if your rent went up, supply didn't. Supply, not gentrification, is the problem in the SF/NY/Londons of the world.

Induced demand can cause both to go up, for extra fun times.

You also seem to have missed the "or" presented by my hypothetical low-to-medium-density-city-dweller: either rents and housing prices get higher when you decide to move to my area, or my life changes in ways I don't want as a side effect of your increased supply.

So now let's imagine I own property and can vote, etc. Which of those scenarios do you think this person is going to support? The one that at least gives me a nice valuable house, I'm betting. You still want to move here? Make it worth my while $$$-wise.

I don't think most policy proposals for increasing density have enough obvious upsides for the incumbents to be very realistic.

One of the interesting political tidbits I read was an article about a homeowner who had started voting against zoning laws because gentrification was making it so bad that their kids would have to move far away to be able to afford rent.

You only get the realise the benefits of increased property values if you move away.

A more valuable house also means more property taxes (unless you live in CA).

> You only get the realise the benefits of increased property values if you move away.

Unless the annual appreciation in value of your house is sufficient to quit your job and live on. The risk of course is, will it continue indefinitely.

This is essentially executing the "move away by dying" plan in slow motion, because you end up owning less and less of your house as a percentage, so you probably move deeper and deeper into debt.

I've occasionally suggested* a dirty bomb as the only way to make London livable again. Just enough radiation to scare away the rich, not enough to actually harm anyone ;)

And in Berlin, I've sometimes seen graffiti along the lines of "cleaner walls == higher rents". So making the city less appealing is already part of the anti-gentrification arsenal.

* for the record, I'm not actually planning to nuke London.

>"It's also interesting that people genuinely believe this is going to solve the problem rather than exacerbate it."

No, nobody believes that this one action is going to solve a housing problem, where did you get that from in the article? The point is that Berlin took a pro-resident stance here which is both encouraging and unusual in the current "developer takes all" policies that many other desirable cities around the world have adopted. Berlin also enacted legislation restricting AirBnB rentals in the city. They understand there is a housing problem and are at least taking actions to address the concerns of the residents and possibly buy some time.

>"The only solution to this "problem" is to let people build additional housing to increase supply."

What do you suggest, Berlin gets rid of parks and public spaces and allows high high rise condos to occupy that space instead? Part of the quality of life and charm of Berlin is those spaces. Also there is nothing in this article that suggests that the potential buyers were going to increase the housing supply. Housing is a pretty complex issue and your completely reductionist policy suggestion is absurd and naive.

>"And yes this will occur even if it's made "illegal" to sublet these apartments (this exact situation exists in NYC with people who have rent controlled apartments and people still do it all the time)."

This is completely untrue. Firstly there are barely any "rent controlled" apartments left in NYC. They are an endangered species and this idea that people who don't live there are subletting them out at a profit is a complete myth. See the following:

https://citylimits.org/2015/03/09/nycs-endangered-species-a-...

As of 6 years ago rent controlled apartment in NYC were 1.8% of the total stock. And there are significantly less now: https://en.wikipedia.org/wiki/Rent_control_in_New_York

What solution do you believe will to lower housing prices in Berlin that isn't decreasing demand or increasing supply?

Regarding rent controlled apartments, you're correct that only about 1% are rent controlled, I should've been more specific. Given the small percentage of apartments that are rent controlled, it likely has little effect on the overall pricing. When I said rent controlled apartments I really meant rent controlled and rent STABILIZED apartments (apartments that are not currently being charged the market rate). And rent stabilized apartments are approximately 50% of NYC apartments.

[0] https://ny.curbed.com/2017/8/28/16214506/nyc-apartments-hous... -- "That brings us to rent stabilization, a much more common way for New Yorkers to secure under-market rent. While only around one percent of New York rental units are rent controlled, roughly 50 percent of the city’s units are stabilized. Rent stabilization generally applies to apartments in buildings of six or more units constructed before 1974."

Rent controlled and rent stabilized are not at all comparable. And yes, I am well familiar with rent-stabilized apartments. And rent stabilized apartments have annual rental increases just like any other de-regulated apartment does. It just means there's a cap on how much the landlord can increase the rent. There are no deals to be had there. And anyone who is fortunate enough to have a rent stabilized apartment is not stupid enough to risk it by subletting without the landlord's permission.

Landlords are looking for any possible way to get rid of their stabilized tenants as each time the apartment turns over it is that much closer to deregulated. Landlords and property management companies watch their rent-stabilized apartments like hawks. You make it sound as if subletting rent stabilized apartments and pocketing the difference is some epidemic("people do it all the time".) Does it happen occasionally? Sure. Is it the common case? No, at at all, not even close. Not only that but rent stabilized apartments have their own issues as well.

http://www.salon.com/2017/06/27/many-rent-stabilized-nyc-apa...

This move of certain municipalities buying housing is not in contradiction to increasing supply; it's just one of many tactics being used to address it. I recall recently reading elsewhere that Berlin govt is also planning for building additional housing and conversion of large unused industrial spaces into housing.

There's a limit to how much you can build out a city before you've permanently disfigured it.

Imagine taking your typical European mid-sized city and starting to allow multiple high rises taller that historical landmarks; or adding purely residential sprawl neighborhoods that distort residents' lifestyle due to long commutes and lack of attractor points outside of downtown.

You've just made a suburban hell out of a human-tailored environment, with the added sin of having destroyed the "experience continuity" which used to be core to community identity. A loss that is permanent and impossible to revert in later generations

I've lived in Rome and Amsterdam, and I know the feeling

Doesn't that mean that european cities simply aren't sustainable? If the city stays 'attractive' more people will want to move there, and the cost of living would rise too much. Really, the only solution seems to be to accept a balance needs to be struck.

Even if you personally believe building large buildings permanently disfigures it, the fact that people are willing to pay for and live in such buildings shows that people still value such "permanently disfigured" cities.

Why should people who own buildings/land, and purchased them under laws allowing them to do as they please with the property now be disallowed from building large buildings on their plots of land and sell/rent them to willing buyers?

Why should the current renters, who don't own the property, receive superior rights to those who own the property and those who would willingly pay more than them?

The "problem" is the movement of middle/upper middle class people into cities. High rents and displacement are one consequence of gentrification, but most people who care about those things are opposed to gentrification itself. The only solution is to keep the middle class in sprawl where it "belongs."

Do you have evidence of your last paragraph ever occurring in such a high frequency to actually matter to people?

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