This raises the equilibrium for lease units: less units available, higher prices. Not to mention the fact that leasers are now competing against people paying higher nightly rates.
1. Remove density and height restrictions (e.g. "Berliner Traufhoehe").
2. Remove unnecessarily strict building requirements (e.g. "Daemmungswahn").
3. Remove legislation that is too tenant-friendly (e.g. "Mietbremse").
All three serve as breaks to increasing housing supply, the first is a legal impediment, the other two reduce investments.
Doesn't really help getting more affordable flats on the market.
I'm not sure how familiar with the London property market. London is currently seeing a large amount of real estate being built, mostly studio, 1, 2 and 3 bedroom. Hardly luxurious. Prices are commensurate with London income levels. Otherwise people wouldn't live in London.
Increasing supply outside of them, which would be easy because Berlin is surrounded by land you could build on won't change that. At least not without billions of investments in public transport infrastructure, maybe.
Any regulation like building requirements is probably federal, I doubt Berlin has any extra regulation. So there is nothing Berlin can do here.
Removing regulation that is too tenant-friendly isn't popular with voters, it's not going to increase the supply of apartments for students and poor people. This kind of regulation including but not limited to the Mietpreisbremse is also federal law and not something Berlin can do all that much about.
You also can't arbitrarily increase density of a city as you need infrastructure to go along with all those people. Not to mention that Berlin has many old buildings that are under protection, so you can't just demolish buildings and replace them with skyscrapers.
I feel like most people are moving to the outer zones. Buying flats in zone 1-3 is obviously out of reach for most people, even for most developers not working in The City. From what I've seen, even 1-bedroom flats cost at least £310k near Seven Sisters (Zone 3).
I have to admit though that I was mostly looking for flats to rent, not for sale in the last few months so I'm not an expert.
Even central Berlin is full of brown-field sites that could be developed -- Flughafen Tempelhof most prominently. If you go for Hong Kong style density there, a lot of housing problems would be solved ... Laws can easily be changed if there is political will at the local, regional or federal levels.
However, all this requires a bit of long-term thinking and planning, of which there is little evidence. Instead we get populist measures like "Mietpreisbremse" which hinder new developments.
Seattle has a similar problem where we do have a large number of new units going up, but some places are still seeing upwards 50% vacancy after 3 years... because the new units aren't aligned with market demand. I'm talking luxury apartments downtown when the growing demographic is frugal-minded mid-20s/30s interested in neighborhoods 10-20 minute away from downtown. Even constructions in the right neighborhood end up being a net loss of desirable units when the rent is sky high.
Flughafen Tempelhof can't be developed, voters have voted directly against it. That law could be changed but to do so would arguably be undemocratic and it would certainly be political suicide for the forseeable future. This also brings up the important point of city planning, cities are more than just housing. You need to take that into consideration.
Also indeed increasing supply is about long-term thinking. You can't increase supply very fast and in this instance you can't increase it fast enough. This means you need something to slow down price increases in the short-term which measures like the Mietpreisbremse or banning AirBnB do.
Berlin overall is an anomaly in Germany; during the Cold War division of Germany to BRD and DDR, living in Berlin was heavily subsidized, and that still shows up in the planning, the structures and the market. But the impact of a 40-year "siege" is going away now 25 years after it ended, and at the same time the capital has moved to Berlin, along with lots of administration and related jobs and businesses.
I don't really think this has much significant impact on the housing shortage and pricing there, but some part of the housing stock there is owned by people who don't actually live there, and who can afford to keep it vacant just in case they need to move in one day.
Why exactly should they? I mean, I don't want to forcibly remove them, but there are many cities in Germany other than Berlin.
If one city is getting richer and richer, then the average price of an apartment goes up. More rich people start comming, because they see oportinity to do business there. At the same time poor people have a choice of moving to smaller, more affordable cities.
The biggest pitfall of a mankind is that we cannot grasp that the world is constantly changing. Life itself is a process of constant change. Just because your parents lived in Berlin and you were born in Berlin does not imply that things have to stay this way forever.
Trying to stop the flow of time and inevitable change is what makes us miserable.
So, yeah, more development might help Berlin, but it will be more effective when accompanied by rent camps and strengthening of social housing banks. Otherwise you are just feeding the bubble and exchanging one population by a wealthier one.
Why hasn't anyone thought of this before!
Get rid of the restrictions on height, and build 50 - 100 floors Hong Kong style, at least in the center.
Tempelhof shows the stupidity of the Berlin voter. The refusal to develop even a small part of the airfield was almost exclusively justified with fears of "gentrification". Congratulation voters, you have just voted yourself into higher rents. (Also, one could have a new "Volksbefragung", in the light of the dire need for more housing in Berlin.)
Most buyers of such property (whether private or investment funds like Deka-Immobilien or BlackRock Global Property or Brookfield Property Partner or one of the many others) do this as an investment vehicle with a particular risk/reward structure. They will absolutely have to rent out these properties, and indeed, when they fund property construction projects, as they have been on a massive scale in London in the last decade, they do so to cash in on rent.
£310k near Seven Sisters
Maybe it's good this way, because unless you realise that a property is a serious long-term investment, and that the target is to save for retirement, they probably don't have the financial maturity to make such a large purchase and should stick to renting.
Note that property always reflects income-levels of the working population. That's because they are the ones that buy / rent property. Rent and property prices are strongly correlated, because it's fundamentally a risk/reward trade-off: when you buy you take on a fair amount of risk: heating may break down, the roof may leak, you might not find tenants in time, tenants may ruin the property, not pay rent etc etc (From bitter experience I can tell you that "may" really means "will"). Tenants don't carry this risk, hence need to compensate for this risk transfer. That's why renting appears to be more expensive.
Focussing on foreign billionaires who buy-to-leave-empty distorts how the property market works. The real question is: what percentage of their income is the average person willing to invest in property / rent. This is remarkably constant.
people with low incomes should be
able to live in the city.
I would imagine that a much bigger issue is old people who are in a care home or a hospital, unable to live in their old place, but not willing/able to give it away either.
At least over here (Finland) this is the major reason for "empty" apartments in central areas of cities.