The Rents Won’t Be the Only Things That Will Freeze

Building will come to a complete standstill in Berlin too.

Berlin

But Berlin’s red-redder-green politicians (SPD, the Left Party, the Greens) don’t know anything about building (look at the state the city of Berlin is in). They can only tear things down. Oh, yes. And redistribute. They will redistribute for as long as it takes to get anybody who’s got anything to get out of town.

Berlin Builders Hit the Streets in Backlash Over Rent Freeze – The German capital’s government is trying to ease the burden on tenants after a property boom caused rents to double over the past decade. However, critics of the plan — including economists and large landlords — have said the only way to address growing demand for housing is to build more homes.

The rent-freeze legislation will start its passage through Berlin’s parliament this week and is expected to come into force in the first quarter of next year…

The city’s plans “threaten to cause considerable damage to both the housing market and Berlin as a whole,” IW institute economists wrote in a recent report for the Christian Democratic Union party, which is in opposition in Berlin and opposes the measures. Scrapping the plan is “urgently needed from an economic perspective to prevent wider damage to the Berlin economy,” they added.

Berlin Is The Place

The place where you don’t want thriving companies offering gainful employment and increasing property value in your neighborhood.

Gentrification

I get it. It’s about gentrification again. But the problem here isn’t the evil capitalist rich swooping in to speculate and force the poor out of their neighborhoods. The problem is a classic case of “I’m from the government and I’m here to help.” The German government in general and the Berlin government in particular have been “helping” German renters for decades in ways that have discouraged Germans from owning property of their own (the vast majority of Berliners pay rent). Then when reality finally strikes (supply and demand = rising rents) the same politicians can’t help these renters anymore and leave them high and dry with rents they can no longer afford to pay. Ain’t nothing new.

Kreuzberg has long been one of the most affordable areas of Berlin, making it a haven for students, immigrants, artists and activists, a hub of culture, night life and left-wing politics. But in a pattern repeated in similar neighborhoods in many of the world’s wealthiest cities, affluent people have moved in, too, in recent years, bringing with them the social tensions of gentrification.

“They push out the people who were here before.”

Redistribution Is Da Solution (Again)

The next step backwards: Berlin has a new law prohibiting landlords from demanding rents that are more than 10 percent higher than the area average, in an attempt to keep housing affordable in a city that’s attracting 50,000 new residents a year. The rule relies on a disputed index — known as the Mietspiegel — that critics say is a statistical crapshoot.

Rents

“The rent brake is essentially a transfer of wealth from landlords to tenants. Berlin will become less of a destination for international investors because capital doesn’t like to be constrained.”

Same Old Problems Caused By Same Old Solutions

Rent control still rocks. Just ask the people looking for a place to live in Hamburg, for instance.

Rents

The German government’s Mietpriesbremse (rent control plan)  – it’s “sozial,” as in “for free”  –  has alarmed landlords who are now raising rents even higher than they already had been, “vorsorglich” (preventitively).  Imagine that. Bad landlords.

It’s always the same old thing. There is a shortage of apartments. This increases the rents. New apartments are needed. That is why the government steps in “to help” by imposing price controls called rent controls. That is, the government ensures that the shortage will remain by making new housing construction unprofitable for those who would otherwise build the new housing (I know, profit is a dirty-ugly-yucky word but we haven’t found a better one yet). The shortage is sustained and increased by rent control, the supposed solution.

But don’t worry. Elections will come around soon enough and the same politicians who fixed that first problem will have new proposals for fixing the one that followed, all inexplicably like. And they will get reelected – by the very same people they screwed in the first place. Now that’s what I call sozial.

“Durch die Ankündigungen ohne konsequente Umsetzung hat die große Koalition die Kosten immer wieder angeheizt.”