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Comment by watt | Hacker News Reader

> But rents are high — and rising — in Fürstenfeldbruck.

Why are rents to high? Why are they raising? And _who_ exactly is rising them?

I can't see the economic reason why such a large chunk of income needs to go to "landlords". Rents could just as well be very low, set to extremely reasonable level (they should be negligible, maybe 10% of monthly income at most, really). If you are a land-owner, that's about the level of taxation you see. I just don't see why we accept current state of things as the way to be.

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I know someone who wants to rebuild his one level apartments into a four level apartment block. Good district in Hamburg. Exactly the kind of thing the city needs. More apartments, increased density, private investment.

He's trying to get the allowance to do so for up to two years by now. Every plan his architect makes gets denied for different, petty reasons. Once he manages to fulfill all requirements of the bureaucracy, the true battle will begin.

Residents in the area have already said they will do everything in their power to stop this rebuilding from happening. No matter the outcome of this legal battle, that'll add another couple of years until this apartment building becomes reality.

Germany has a problem. It's becoming impossible to execute in physical space.

If you put yourself in the position of those neighbours, they do have a point though: New apartments usually means luxury apartments, hence gentrification.

> I can't see the economic reason

The market creates the price: little supply and very high demand. Fürstenfeldbruck is one of the most attractive regions in the country. Generally this is the case for the rest of the metropolitan region of Munich. Fürstenfeldbruck is a small town (< 40k people) near Munich.

By "reason" I mean I don't see how it's justified. The government could work on both the supply and demand side of equation, and increase the quality of life of residents, by allowing a way larger chunk of income stay in their hands.

It's hardly defensible, but since the neoliberal turn in the 80s/90s most global north governments have started to dismantle their public services. That's why they're not working on both sides of the equation: because governments work directly against the interest of the people. Governments and elections are the exact opposite of democracy, because it's delegating powers to representatives instead of exerting "power of the people, by the people, for the people".

Last I've been to Munich public services seemed not to be dismantled. Munich has other problems: it's too successful and attracts people and investors.

> public services seemed not to be dismantled

It's a very progressive process, not a binary flag. See for example David Graeber's CCC talk on "Managerial feudalism and the revolt of the caring classes". All in all most of the global north appears to have strong public services and cultivate that image to please the middle classes who are happy to pay taxes for that, but they've worked hard to make them harder to reach and impossible to sustain (see also, Covid crisis and public hospitals) in order to "attract people and investors".

There's no way a society with good public services can be attractive to private investors, because good public services provide better services at a much lower price than private services. It's either one or the other, and the presence of investors and gentrification is a factor that the social fabric and public services have already been heavily damaged.

How could they?

The rents are rising because the building code is ridiculously prohibitive (NIMBY and because the German state loves bureaucracy, everything takes 10x longer).

This is the one and only reason. Everything else is political smokescreen.

Same as anywhere else. Lack of supply caused by zoning and an interest in keeping property values high by existing owners.

Does 10% cover the cost of building and maintaining the housing? If not, who's paying for it instead?

Building "code" and bureaucracy around it seems to be some kind of weird cult. I bet in this day and age it is actually quite cheap to build, if you look at what costs in term of materials and actual wages of construction workers. Everything else around it is inflated to hell on other hand.

Due to low interest rates companies(even foreign)are buying land and buildings like crazy, building new ones and rebuilding like crazy trying to raise their return. Prices are skyrocketing. Construction companies have more projects than they can work on. Those new buildings are expensive as hell and rent is rising as well. The average rent in the village i live in doubled in the last 10 years and thats probably due to some restrictions on how much rent can be raised in a certain interval.

But without (extremely) low interest rates government spending would have to be cut A LOT ... so who decides interest rates again? Oh wait ...

Expecting an increase in rates is like expecting the government to decide it's too big (and not a little bit). Good luck with that. Even very rightist parties in Europe don't even try to make that point any more.

The prices are what people on mass are agreeing to pay. There isn't a land lord conspiracy raising the rent.

Should some third party decide this instead? Should this apply to to every transaction, not just rents? Instead, in a free market people make decisions on their own, do they want to live close to town where it's expensive or would they prefer out of town where it's cheaper etc. Having some third party decide prices sounds reasonable at first but the freedom it removes is huge. Also price fixing always has the same impact. Reduced supply.

It's not exactly a worldwide conspiracy of landlords, because there's not a single table gathering them all to drive this plan. But there is a great amount of coordination between landlords and local politicians in the process of gentrification.

Gentrification is something a single owner can't achieve, and that a disorganized group of owners can't achieve. It requires a strong coordination with public authority to deploy efforts to "clean the neighborhood", "evict squats and replace them with nice-looking artistic venues" or "setup new transport connections".

> Reduced supply

I'd like to see evidence of that. Despite their glaring architectural issues, many public housing programs in Europe after WWII have led to cheap housing for many people. Here in France public housing in big cities, my approximation is that public housing rents are 10-40% the private market rents.

Also, the waiting lists are long nowadays (was not already the case) because our governments are dismantling public housing programs and slowly privatizing anything.

Finally, why would "reduced supply" matter when there's already an abundance of empty apartments/houses? Without even mentioning vacant office space which is a scandal on its own, there's millions of empty living spaces in the global north. According to official french gov. statistics it's 2.6M empty apartments.

You think there is an abundance of empty apartments? Based on what?

It's a well-known and studied fact in the global north, keyword "gentrification". For example french government's statistical body INSEE has detailed statistics on that, which claim 2.6M empty dwellings france-wide (not counting secondary housing, and not counting industrial/office space).

The "housing crisis" is a scam organized by landowners and public authorities to further land-based speculation. Back when there was last a real housing crisis in Europe after WWII's destructions, governments setup public/social housing programs see for example https://en.wikipedia.org/wiki/HLM

When the people with power and privilege actually want to fix something, they can actually do it. There's just no incentive for them to solve the housing problem when they or their friends directly benefit from driving prices upwards. Of course, in the 1940-50s the incentive was the risk of "communism", and most capitalist economies (even the USA under Roosevelt) adopted strong social measures. To give context on that for example, France's communist party had 20-30% of votes in legislative elections at that time. I'm definitely no supporter of the communist party, but i would understand how a third of the country's electorate voting for communists would put pressure on the right-wing to develop social measures and fast.

Sorry, not being a pedant for the sake of it, where can I actually see some statistics showing confiscating empty dwellings would significantly reduce the prices of houses? I don't buy it.

Instead look at Japan and new Zealand, their planning policy acknowledged the simple fact of supply and demand and adapted, taller building with smaller apartments allowed in sought after areas.

> where can I actually see some statistics showing confiscating empty dwellings would significantly reduce the prices of houses?

I don't know of statistics on that question, however an anecdote: after WII across Europe it became very common for governments and city councils to "requisition" buildings/houses and for people to squat empty dwellings, and that is part of how the housing crisis was faced (alongside public plans for more public housing).

There's even a law in France (and to my knowledge in other countries) which says if you've squatted land/house for 20 or more years and paid your local taxes duly, you automatically become owner of that piece of land.

> taller building with smaller apartments allowed in sought after areas

And then you have a strongly degrading quality of life (everyone living in a small rabbit cage) and suddenly you need to invest billions more in infrastructure. For example, for cities built on ancient mines/swamps, building higher/heavier means you need to reinforce the underground and are always at risk of collapsing buildings/streets.

Why try to centralize everything? Why push the agenda of the construction sector/mafia by pretending building anew is the only solution to all our problems? Why pretend they do it to fight homelessness, when the proportion of empty buildings keeps rising alongside the number of homeless folks and new constructions? For the rise of empty buildings, see for example:

- https://en.squat.net/2016/05/27/netherlands-housing-crisis/ : Netherlands, about empty office space rising in proportion after the squatting ban, and the criminalization of poverty - https://www.insee.fr/fr/statistiques/3572856 : France, only about housing space ; over 25 years every year, population grew by 0.4%, number of housing units by 1.0%, and number of abandoned housing units by 2.8% ; abandoned housing units is 10% globally, which does not include 6% additional percent of secondary/professional residence

Both these stats are official government statistics. Also worth considering, the environmental cost of building new stuff when there's no need. When do we stop? Where do all the materials come from (eg. sand for the concrete)? Infinite growth is madness.

Living location is not a type of good that can be chosen freely, it's a necessity. Hence free markets don't really apply here.

So what's the alternative? Edit: food is also a necessity, should that be government controlled too?

I think you'll find most European nations have in fact communist-style central price setting for basic food. Nothing comfortable, it's like (one type of) bread and one basic jam that's regulated. Stores have to offer it, they have to ask a specific (very low) price. I hear in france you get cheese too.

Which means as long as you're happy with very basic food, you can eat for, I believe in the Netherlands it's 37 euro per month. And yes, you can buy it in any supermarket (I believe the exact rule is that if they sell bread, they have to have this option available at the government mandated price).

Of course, in practice there are mostly cheaper options available, so we even have all the parts of communist/government intervention: it mostly misses the point.

What I’m saying, is that free market is a bad model for the reality of renting or owning a home.

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