> "The Berlin Senate’s ruling nonetheless reflects a general feeling across a city in which homes are getting harder to find: Berliners have had enough and they want their city back."
Translation: There is no pricing mechanism on rents in the city and it is becoming increasingly impossible to find an apartment.
While it's certainly true that AirBnB essentially allows landlords to flout the law, it's worth noting that the adverse effects of price ceilings on supply are the root cause of Berlin's problems and this will not solve the underlying problem of rents being far from equilibrium.
TL;DR they're also placing tight ceilings on new development.
[1] This article is supportive but seems oblivious to the supply-side effects.
Maybe there is some other cause (e.g. everyone wants to live in a city now)?
Increased demand with no supply = increased prices and low supply.
Simply saying "be more capitalist" might work, but I'd say build more quality homes on all the scratchy pieces of land that exist round Berlin is an equally good option above firing people into the weird world of London property.
Finally the AirBnB/rentals thing is a result I'd guess of the massive number of people who hate having tourists traipsing through their buildings. My experience at least centrally was of large shared blocks of high quality flats and a lot of suspicion around strangers being granted entry to said gated communities.
Right to live where you are born? That adversely affects anyone not born in a central district.
Meanwhile many fewer homes are being built. The largest drop has been in building by local authorities, which used to account for almost half of all new builds before Thatcher brought things to a halt in in the 1980's by selling off social housing and preventing councils from investing the proceeds. (See: http://www.lrb.co.uk/v36/n01/james-meek/where-will-we-live)
As real wages have stagnated for most people, multiple administrations have propped up demand through ever inflating house prices. People feel richer when their home goes up in value but this wealth is illusory, nothing new has been created, only a generational shift in capital as young people are forced to fork out ever more of their income in rent.
Dozens of cities around the world are suffering from rejecting capitalism of property and the consequences will be the long run slow bleeding out to locations more accepting of economic reality.
Even in the most expensive places to live - Bay Area, central Tokyo, Venice, etc - if builders could build to their hearts content and see rapid high-rise housing development (first to meet the wealthy demand, and gradually to meet all other demand that turns a profit) you end up with affordable low income housing and extreme growth for the whole metro area, which means prosperity.
IE, rather than holding back development and costing yourself tremendous fiscal gains, you let those happen and tax the fuck out of them to make life better for all those displaced. Use tax money from more unfettered capitalism to improve the situation of the poor, rather than holding back markets for the sake of the poor, who are then also worse off.
As a result a property investment bubble feeds on itself and creates the london problem.
To reverse that you make it unattractive as a store of wealth and attractive as an active investment via renting it out. And you remove supply creation limits. You would decrease the unfair demand side by taxing them like a typical UK resident.
Also zoning policy usually doesn't help at all with typical height limits.
They bailed out all the banks to prop it up. After this help2buy (help2sell in reality) to have the govt underwrite risk when the banks stepped out.
This isn't capitalism.
They do it through the government by creating arbitrary regulations and barriers to entry.
We are already living in a world where the housing monopolies are enforcing their will on the population.
Getting rid of these regulations, and allowing people to build so many houses that the market price gets driven into the ground, is how we take the market back for the people.
> Yakuza to thank for that
Your pithy one-liner isn't very enlightening. Could you elaborate?
Let’s look at one of those deals in detail.
In 2004, Frank McCourt sold 23 acres of open
parking lots on the South Boston waterfront to
News Corp. for $145 million ... Two years later,
News Corp. sold the same land ... to Morgan
Stanley for $204 million. ... When the
BRA [Boston Redevelopment Authority] approved
the Seaport Square Master Plan, paving the way
for major development of midsize towers in 2010,
the land finally had real value. ... To limit
speculating, the BRA could have made Morgan
Stanley’s Seaport approvals non-transferrable.
But it didn’t.
Instead, over the next five years, Morgan Stanley
parceled out its 23 ... acres ... for a total
of $654 million. ...
After changing so many hands, ... housing, like
at Waterside Place, where a 598-square-foot
one-bedroom can be all yours for $2,685 per month.
When the people who are engaging in housing development are shaping policy to maximize short term profit, this is the result.
I don't have a clear understanding of how to prevent this from happening but my strong suspicion is that better government regulation needs to be in place that holds the public interest at heart.
Disclaimer: I live in the Boston area.
[1] http://www.bostonmagazine.com/property/article/2016/02/21/bo...
I live in Honolulu, Hawaii. Prices here are RIDICULOUS, but this is the last thing I want. At some point growth has to stop or we will lose what makes this place what it is.
> Right to live where you are born? That adversely affects anyone not born in a central district.
Thinking about it, this reminds me of the question of immigration. People usually say that one shouldn't be allowed to immigrate wherever he wants and/or that politicans are beholden to the people of their country, not the whole world. So .. what's the difference between a city and a country here? Why should the city council not put the wishes of those born there first?
The private rental market in the UK is all short term lets, after the first year the landlord is free to adjust the rent. With council housing now largely gone it's an unanchored free market. Restricting supply (e.g. through difficulty obtaining planning permission) while demand increases does of course drive up rents.
Property prices are a function of interest rates and rents. Credit conditions come into play here in determining how much a prospective home owner or buy-to-let investor can borrow and pay for a property.
There are no pure market mechanism that would take care of these needs. I would not call a welfare state an epicycle.
Democracy tends towards chaos and deadlock. There are too many cooks, and they all want different things, and they all have roughly the same amount of power. Usually nothing happens, and when something does happen it's a half-assed designed-by-committee nightmare.
When you see government acting swiftly, purposefully, effectively and succeeding at something difficult and expensive, it's because an autocratic force (like a political machine, or organized crime) has bent the democratic process to its will.
For example, only Mayor Daley could have pulled off Millenium Park in Chicago. To get something like that done in Chicago's dysfunctional government, you need to own people at every level and in every department. Only the Daleys have built empires on that scale, and other mayors in other cities don't wield nearly as much power (even if their legal entitlements are the same).
That is a very weak position, do you actually believe things can be true because "People usually say that"? Either immigration between countries is wrong in some way that generalizes to immigration between cities, or you can't use the fact that immigration is by default illegal to support your position.
Not allowing unrestricted immigration between countries is usually a pragmatic consideration, that is related to how countries usually spend their money vs. how they earn their money. Social expenditure, for instance, is usually planned based on the amount of tax the state gets from an average citizen, importing a lot of people who will pay less in taxes means you either have to degrade the quality of service for everyone, or start discriminating between people when spending on them (which betrays the concept of welfare spending as a 'safety net' - it's supposed to serve people who can't earn enough to provide for themselves or their family). Sometimes anti-immigration sentiment is motivated by nationalism or racism, even to the extent that people aren't allowed to live where they were born, and it would be a shame to reproduce those ideas on a city level.
Someone ELSE can come it, charge less, and get all the customers to go to them instead.
This is what allowing more houses to be built would do.
The land value tax aligns the incentives right, so that the local administrations have an incentive to put the proper regulations in place.
(The soil in Berlin is hard to build tall on. But money can buy engineering to work on this problem.)
But in the long run people are not going to just sit around collecting UBI. They can still work, but on other things. Society will develop new areas of interest in which it will invest the available money. The focus will fall on science, sports, culture and social projects, which are going to keep everyone busy and at the same time advance us even further.
As society changes, education will have to adapt to the new requirements. There will still be jobs, but in domains that perhaps now are not even imagined.
Thus preventing them from bootstrapping, or demonstrating profits to investors.
It's not a very efficient solution (no one can move to the city for a job since you need somewhere to live within months then - not decades). It also needs very draconian rules to avoid a large black market in contracts.
There are no good solutions to this problem. If you are a socialist you argue that the lesser evil is inefficient queueing and if you are an economic liberal you argue that allocating via market prices is better and gentrification/segregation is the lesser evil.
It's certainly a nice thing to be able to travel and visit other cultures and countries. But the advent of massive international transportation combined with few tourism hotspots has created a tourism industry that can outprice locals, and thus destroy the cultures that created the artefacts they show to tourists.
Except there are huge entry costs, and all that theoretical ROI disappears as soon as you enter the market, because the existing monopoly starts competing.
To make a profit, you need some advantage over the them, like efficiency, innovation or goodwill. If all you can do is exactly what they do but at market price, well... they can do that too.
I agree loose credit is the primary cause. However that wasn't what my post was about, I was challenging the assertion that planning permission is easily gained. It's not.
Restrictive planning is vital for creating artificial scarcity. To ramp prices with loose credit you have to push supply below demand to create an auction scenario.
Right to live where you work seems to be a good one.
temporary visitors.
If we generalise the "live where you work" to "stay where you spend most of your time, then it makes a lot of sense for the visitors to be housed in the centre. Otherwise you force a large amount of commuting on them. For course that doesn't matter much for each individual visitor because they are around only for a short time, but that's not the right metric. It means that Berlin's infrastructure is heavily taxed with all that unnecessary commuting by (every changing) visitors.
If someone started building a whole bunch of housing in SOMA, do you believe that this ROI would disappear quickly, due to housing prices hitting rock bottom?
Do you really believe that would happen?
The thing is, it completely reverses the meaning of my point, which was based on concern priority, not transportation efficiency. To me, it seems important that people whose home, job and lifestyle/culture is at stake are treated preferably to people for whom the city is just a tmporary leisure.
By making sure that visitors don't effect too much locals, we also promote a kind of tourism which promotes hospitality, and which ensures that the object of visits is not destroyed by tourism consumption.
Indeed, the boundary between tourists and residents is porous. Capital cities attract a transient population from week end visitors to interns or workers who stay a few weeks, to summer visitors who stay a season, to students who stay for a few years, to proper residents who stay a decade or more. All of them are a source of ideas as well as a source of income for Berlin's industry. "Das ist auch gut so." Hence Berlin needs to cater for all. That includes providing substantial, centrally located living space (whether hotels or apartments) for short-term visitors.