Berlin Builds Ideas to Stage a Housing Revolution

Unless something significant happens to regulate the housing market we're going to end up with property being something that no individual owns, and everyone rents a place to live from a corporation.

Building codes reduce transaction costs by avoiding having to inspect every single thing in a building every single time the ownership changes.

Building codes massively reduce the load on the legal system that would otherwise be required from all the different people suing each other to determine fault when something inevitably breaks.

Building codes reduce death from things like fires because they make sure things like fire exits exist.

There are LOTS of countries with minimal building codes. Take "free market" Somalia for instance. Would you seriously switch with them?

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).

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.

If the government wants you to use public transport instead of private cars they have to provide great service 24/7

If you want to remove car ownership you should try to provide an alternative that is actually better. If you want to avoid congestion, don't create a massive black hole in the center of each city that everything gravitates to.

1. Property owner do not want to see their quite significant loans, or investments, decrease in value. 2. Renters do not want to get priced out of the city, having to leave a good job and move their kids away from their friends.

In addition to that while seemingly intuitive in practice building doesn't seem to decrease costs. Presumably because:

3. Land owners and construction companies want to make as much money as possible.

Unless you can override these three groups, or get them to agree, it is a social issue and building more will make things worse. Look at the record from essentially every city that has been building. If just building more worked there would be good examples and the far majority isn't.

The pipeline from planning to construction is a bit long and most of the projects are still a year or two away from breaking ground, but it is coming. There isn’t too much NIMBY opposition to housing, with the notable opposition of one successful referendum banning the re-zoning of (parts of) old Tempelhof airport.

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

Sorry for not being able to help! I hope Berlin treats you well otherwise.

Besides, price and demand curve would still apply where it was one landlord or hundreds.

What would help is to encourage housing density to increase supply. That has two main drive: building regulations (mandate building of a certain height) and taxation (tax building by footprint and not by height/units)

Messing with ownership will only make people creative.

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.

And finally, the big landlord companies do not exist due to success but due to big investment fonds deciding that it makes sense to buy many houses in such a cheap city. And to be honest, the actually good renting laws also play a big rule in this as they protect rents very good and such a single bad renter can become a big problem for small landlords. Also you have to cover so many restrictions etc that it becomes expensive/challenging to rent out (i.e my collegue is currently suing his landlady for a decrease in rent of 580€ per month due to an error in the contract)

Landlords dont raise rents. Rents are the result of supply and demand just like everything else, and a price is where a buyer and a seller meet.

Controlling prices is preventing that exchange.

Because the tax is progressive, which means is not equal for all landlords, which means if big landlords increased their rent by their tax then nobody would rent from them because smaller landlords would have smaller rents thanks to smaller tax.

This way large landlords no longer find owning real estate profitable and relocate their capital away from real estate market towards stock market or wherever where it is hopefully less harmful to other players.

Less capital with same number of units drives the price down. More people can afford to own vs rent, so they buy and rent drops further because of lower demand. Ultimately everything lands on new equilibrium of lower rents with government having nice pile of cash on their hands free to use it to whatever new public housing development it fancies, driving prices even lower by increasing supply.

Not every discouragement is punishment.

The law(s) that would need to re-written are the core laws that define what a company is, how ownership, liability and such work.

These are all clever-complicated. They cross jurisdictions, and enable cascading ownership (companies, owning companies, owning trusts, etc.), each with different (incompatible) rules: tax, reporting & transparency obligations, definitions of terms like profit. They've been complicated constantly for hundreds of years, trying to encourage one things and discourage another, usually for a small picture reason.

Most of the "tricks" involve using multiple types of legal "persons" registered in multiple jurisdictions with multiple ownership structures. New laws try to plug certain loopholes, open other ones, or achieve a political or policy goal. This complexity is why it's so hard to do anything with company law.

For example, in tax law, the game is to find ways to not actually violate the exact letter of the law. The idea of the spirit of the law has no force; everything has to be precisely outlawed. This, of course, is an infinite game that will never end, and leads to the endless games of shell companies and foreign domiciling and so on and so on; everyone knows that this is not what was intended, but it's what we have.

The alternative is to write into law the intentions of the law, and allow subsequent assessment and judgement. Some places do this, and in this way the game of finding ways to ever so slightly dodge the exact wording of the law is a much less fruitful game.

The problem is still the same problem, rent markets collapse.. so, public housing would have to plug that hole.

I think it's important, in the context of public debate, to keep things simple. If an idea approximately transposes into another one... address them as a single idea.

I'd catalogue this one under. "Owner-occupancy and public housing only."

This is not realistic in most places, but maybe in the context of Berlin it's possible.

Now, if you want to live in a city, you have to Shell out hundreds of thousands of dollars.

Berlin would only be for the rich, as no renting company would be willing to rent anything to people.

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.

Yup, we do that sort of thing all the time in Europe. I know zero people that went bankrupt because of an unexpected serious illness and I know zero people that dislike the idea that we should all pool our resources so that universal health care is possible. This also applies to education, unemployment and other things. And yes, housing.

In fact, most of the western world is more similar to Europe than to the US in this regard. Surprisingly, people from the US speak as if social-democracy is impossible somehow... It is not perfect for sure, but many aspects of modern US sound like a a dystopia to me.

> If housing is a right, does that necessarily mean that housing in a specific area is a right?

Agreed, but it should be possible to have renting contracts that do not make you move out of the place you have lived for half a century because some rich kids arrive with macbook pros and a taste for overpriced bad coffee. In fact, this is the case in Berlin, which of course means that some landlords start playing dirty tricks.

I am for freedom. I think that people should, as much as possible, live as they wish. If you and your friends want to build Galt's Gulch, more power to you. If Berliners want to stay away from those games, more power to us.