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Impact of Regulation on Berlin Rental Market

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    #2
    Yurt2
    Registered Users Posts: 9,381 ✭✭✭Yurt2


    Hubertj wrote: »
    https://www.bloomberg.com/opinion/articles/2021-03-02/berlin-s-rent-controls-are-proving-to-be-the-disaster-we-feared?utm_source=url_link

    Interesting report on Berlin. Goes to show that state involvement in regulating the market has to be properly thought through. Hasn’t happened in Ireland up to now and haven’t heard anything from government or opposition that won’t make things worse.


    I wouldn't be so quick to hammer Berlin just yet, it's a very new policy working its way through the system and developers that were licking their chops looking to turn Berlin into the new London as a real estate feeding ground are having a whinge about it in case other cities get any ideas. A former colleague of mine who lives in Berlin said she's pleased with how it is and she already feels it is putting the city on the road towards being a more livable place.

    The previous decade were marked by massively inflated land prices and giddy institutional investors wringing the city and its residents for every pfenning they were worth. Sound familiar?

    And I'm not usually one to shoot the medium, but Bloomberg are top of the list of 'well they would say that wouldn't they?' outlets as well.


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    #3
    Hubertj
    Registered Users Posts: 2,000 ✭✭✭Hubertj


    Yurt! wrote: »
    I wouldn't be so quick to hammer Berlin just yet, it's a very new policy working its way through the system and developers that were licking their chops looking to turn Berlin into the new London as a real estate feeding ground are having a whinge about it in case other cities get any ideas. A former colleague of mine who lives in Berlin said she's pleased with how it is and she already feels it is putting the city on the road towards being a more livable place.

    The previous decade were marked by massively inflated land prices and giddy institutional investors wringing the city and its residents for every pfenning they were worth. Sound familiar?

    And I'm not usually one to shoot the medium, but Bloomberg are top of the list of 'well they would say that wouldn't they?' outlets as well.

    As per my initial post any regulation needs to be thought through. I didn’t say there shouldn’t be regs. The article sets out issues with the regulations. It doesn’t sound particularly fair if only some people are able to access the “cheaper” tier of a 2 tier market. While there are good intentions regulation there are unintended consequences.


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    #4
    PropQueries
    Registered Users Posts: 2,203 ✭✭✭PropQueries


    Yurt! wrote: »
    I wouldn't be so quick to hammer Berlin just yet, it's a very new policy working its way through the system and developers that were licking their chops looking to turn Berlin into the new London as a real estate feeding ground are having a whinge about it in case other cities get any ideas. A former colleague of mine who lives in Berlin said she's pleased with how it is and she already feels it is putting the city on the road towards being a more livable place.

    The previous decade were marked by massively inflated land prices and giddy institutional investors wringing the city and its residents for every pfenning they were worth. Sound familiar?

    And I'm not usually one to shoot the medium, but Bloomberg are top of the list of 'well they would say that wouldn't they?' outlets as well.

    Very true. It was introduced in February 2020 and suddenly there’s a rental crisis due to lack of building new apartments?

    200,000 apartments were privatised over the past 30 years and one company alone owns 120,000 of them.

    Basically they’re copying the Irish funds and just keeping many of them vacant to drive up rents until they get their way.

    That’s what oligopolists do and why they’re generally not allowed and broken up in the states.

    Plus there’s as much empty fields in and around Berlin as there is in Dublin so there’s no excuse for their local government to not be building over the past number of years. Berlin still looks like a bomb site and hasn’t changed much since 1945 IMO


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    #5
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    Mod Note

    thread split.


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    #6
    HansKroenke
    Closed Accounts Posts: 254 ✭✭HansKroenke


    The argument against it focusing on State interference falls I entirely flat and must necessarily fail when it comes to Ireland given he State is already heavily involved in the rental market here to try to keep rents afloat.


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    #7
    Interested Observer
    Registered Users Posts: 13,021 ✭✭✭✭Interested Observer


    https://twitter.com/andreaskluth/status/1366691926804754440?s=20

    Saw this thread as well earlier. Doesn't seem like it has worked very well.


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    #8
    timmyntc
    Registered Users Posts: 6,820 ✭✭✭timmyntc


    Berlin rent controls are all well and good if you live in Berlin - if you are trying to find somewhere to live, then good luck.
    Expect queues of 100s of people just to view an apartment. Thats what rent controls do.

    If you want to make affordable rents, build state owned housing and rent it at affordable rates. Let the private sector provide the rest, rents will never spiral out of control so long as state keeps building affordable rentals.


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    #9
    [Deleted User]
    Posts: 3,801 ✭✭✭ [Deleted User]


    It has worked perfectly well for those renters in apartments pre 2014. Now Berlin needs to encourage construction for newer apartments.


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    #10
    Claw Hammer
    Registered Users Posts: 6,163 ✭✭✭Claw Hammer


    Deleted User wrote: »
    It has worked perfectly well for those renters in apartments pre 2014. Now Berlin needs to encourage construction for newer apartments.

    The problem with that is that no one wants to buidl apartments and have the same thing happen to them. The trouble with rent caps is that there are winners and losers. Rent capped tenants win, rent capped landlords lose, non rent capped tenants lose, non rent capped landlords win. It is over 100 years since rent controls were introduced in ireland during the First World War. The effects of that are still playing out.
    Rent caps are madness and when they cause problems the answer is even more rent caps.
    The way to keep rents constant is to do as the central bank used to do with interest rates. Monitor the market and release and withdraw supply as needed.


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