edits: grammar
In Berlin only 1.7% of housing is empty, of which 41% is because of ongoing modernisation, 31% because of renter currently changing and 12% because of mold or other damages.
So only approx. 0.27% of housing is empty in hope of higher prices or because of other reasons. [1]
The demand is real. No living space is created by this policy. Much will not be build because of it.
[1] https://www.morgenpost.de/berlin/article214572349/Nur-1-7-Pr...
I have not met anybody so far who thinks wealthy foreigners should be able to use real estate to launder money, store value, hide wealth, or otherwise not use real estate for what it is meant for, that is to say as places for people to live, play, or work.
1. Demand is increasing faster than supply can keep up
2. Supply is shrinking faster than demand falls
For housing in large cities, it's usually (1) above.
Easy money policies stoke artificial demand by making money cheaper (lower interest rates). That makes speculation in housing easier than it otherwise should be. Don't blame "speculators." They are simply responding to conditions created by central banks and the fiat money system.
Of course, questions as to how one ended up in a bad situation have to be asked. Underlying issues should be fixed.
But when things get out of hand, when extraordinary action is deemed necessary to adjust for an untenable situation, it is not only right but paramount to take action.
As is with all issues, people will disagree with any specific course of action. By all means, vote to that effect.
That rationale is also how wars get started.
Not that I disagree with you, per se: lethal "cures" and excessive pollution were killing people in the early 20th century in the US and government intervention was required. But the Korean and Vietnam wars were also the result of people thinking that the spread of communism was also untenable.
In a complicated world things will correlate. I hope this neither makes a generalised case against physics nor government intervention.
I'm not aware of either of these things happening in any modern city. (well, the latter happens whenever the local economy tanks)
That’s a simplistic view of the problem (simplistic as in introductory-economics-textbook-simplistic), and you have no idea what you’re talking about. Demand is obviously a factor (duh), but the main reason for the terrible, pathologic inflation of the real estate prices in Berlin is called speculation, together with government incompetence and, in some cases, blatant corruption. This rent cap is an emergency measure meant to stop evictions and give people around here a break. Of course it’s not going to solve the problem in the long run. No one is expecting that.
[Edit] To clarify, they seem to be "artificial" price hikes because they don't in any way necessary to cover costs. People realize they can charge more and get more money, so they simply do. That's inherently avaricious and unethical. Sure, maybe prices work themselves out, so that price goes down when supply goes up, but this seems to only be because suppliers can no longer get away with a higher price, because their competition is now selling it at a lower price. So I think it's far more ethical for a government to limit those kind of price hikes, which mainly just hurt the consumer, than to allow these abuses to continue in the name of "freedom".
One way to think about prices is as a signal. When greedy landlords raise prices, they send two signals: (1) To other landlords and wanna-be-landlords, saying it's an attractive market which would justify new construction or cleaning up your spare bedroom and putting it on the market, both increasing supply, and (2) to current and future renters, making it more economical for them to move elsewhere and thus save on their rent, thus reducing demand.
good point in that it undermines constructive argument
Make other places more attractive or increase the supply available in this location.
Greed is bad in this situation because you can make more money of luxury apartments than those suitable for people who are somewhere between the poverty line and upper middle class. Hence new apartments in major cities tend to be more and more expensive to satisfy the demand of wealthier people. Greed is also bad when existing apartments are made much more expensive, thereby forcing senior citizens who have been living there for decades and who are barely able to afford the rent to basically leave town, family and friends.
Think of this like a domino effect: those earning $10M per year buy luxury residence, leaving their old house for those earning $1M, who in turn leave their own houses to those earning $500K, who leave their apartments for those earning $200k, and so on, and so on.
In the end everybody benefits from new housing being built, even if it's only luxury housing.
Also, increasing supply keeps prices down, thus decreasing profitability of buying houses as investment, causing larger share of apartments to be bought by people who actually plan to live in them.
EDIT: yes, this effect might not work as described if is limited to just one city, because there might be a lot of people wanting to move from elswhere. Or more precisely: it will work, eventually, but it would require much more housing to be built to meet the demand.
This assumes that a) rents don't increase for the new residents (which is false) and b) people only move within a city and there's no high demand from people outside to move into the city (which is false too).
So what that leaves you with is disproportionate increase of demand and prices for smaller cheaper units.
Building luxury housing doesn't push prices lower on the bottom half of the housing spectrum, it just makes the top end higher. "Trickle down" housing takes way too long to be realized, while subsidized housing has a much stronger and immediate impact[0]
[0]https://www.urbandisplacement.org/sites/default/files/images...
https://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent...