Berlin becomes first German city to make rent cap a reality

[geardaddy]

Capital pioneers law prohibiting landlords from charging new tenants more than 10% above local average

http://www.theguardian.com/world/2015/jun/01/rent-cap-legislation-in-force-berlin-germany?CMP=fb_gu

Berlin has become the first city in Germany in which rent-control legislation has come into force in a bid to put the breaks on some of the fastest rising rents in Europe.

From Monday, landlords in the capital will be barred from increasing rents by more than 10% above the local average. Such controls were already in place for existing tenants but have now been extended to new contracts.


Germany to impose rent-rise caps on inner-city properties
Read more
“The rent ceiling is very important for Berlin because the difference between the rent paid in existing contracts and new contracts is so high,” said Reiner Wild, managing director of the Berlin Tenants’ Association. “The other problem is that we have 40,000 more inhabitants per year. Because of this situation the housing market is very strong.”

Berlin is pioneering the rent cap after the national parliament approved the law, aimed at areas with housing shortages, in March. Berliners say flat-hunting is becoming increasingly competitive.

“We were looking for the best part of a year,” said Vlasis Tritakis, a student. He, his partner Sofia and their 18-month-old son moved out of a flat-share into a one-bedroomed apartment in the district of Kreuzberg in April.

Much more at link.

Why can't we do this here in the U.S.?

[moondust]

1. Sounds good.

Something NYC and SF probably should have adopted a few decades ago.

I rented an apartment in Berlin with some other folks for a while in the 70s. I don't remember what the rent was but it couldn't have been too much. Of course that was during the Cold War when some younger Berliners were moving out to West Germany due to the isolation and claustrophobic feeling of Berlin. Glad to hear that trend has turned around.

Thanks geardaddy!

[LiberalElite]

4. NYC did adopt rent controls way back in the 1940s.

It doesn't help that NYC doesn't have "home rule" and what rent regulations we still have are dependent on the corrupt gang in the state government in Albany. They've been systematically chipped away by the politicians in bed with the real estate industry. The rent laws are up for renewal every few years and boy is that a hair-raising time for tenants.

Here's a history. http://en.wikipedia.org/wiki/Rent_control_in_New_York

It actually goes back further than the '40s.

[moondust]

7. Thanks.

Looks like the trend in NYC is away from regulation.

[LiberalElite]

8. It has been for years and it makes my blood boil -

Gentrification really gets me going. "Luxury" apartments going up everywhere. I always think when I see another one - more housing for people who don't need it.

[LiberalElite]

10. If interested - this is a link to a short article on a DeBlasio/Cuomo feud re: affordable housing &

rent controls: http://nymag.com/daily/intelligencer/2015/06/cuomo-de-blasio-spat-consequences.html?mid=google&google_editors_picks=true

-snip-
The governor accuses the mayor of concocting a “sweetheart deal” for real-estate developers. The mayor slams the governor as “disingenuous.” And driving the war of words between Andrew Cuomo and Bill de Blasio has been a twisted fraternal-political rivalry. “In Cuomo’s mind, de Blasio has forgotten who’s the governor,” a Democrat who has worked with both men says. “From de Blasio’s standpoint, it’s ‘Goddamn it, Andrew doesn’t realize I’m not his staffer anymore!’”

All highly entertaining. This shin-kicking contest, though, comes with significant consequences, especially for the city’s public school students and rent-stabilized tenants. And the wider fallout could shape the state’s politics for years.
-snip-

[Matariki]

2. I don't quite get the math

If the majority of landlords boost the rent to 110% of the average, then the average goes up. Then what? Rinse and repeat?

[Nye Bevan]

9. Price controls on anything always results in a black market, without exception (nt)

[AZ Progressive]

5. Good, property owners shouldn't have a right to unrestrained profit

[Nye Bevan]

6. Several US cities such as New York and San Francisco have rent control.

The end result tends to be that apartments are much more difficult to find, especially for outsiders who don't have connections.

On the other side, consider an article that appeared in yesterday's New York Times, ''In San Francisco, Renters Are Supplicants.'' It was an interesting piece, with its tales of would-be renters spending months pounding the pavements, of dozens of desperate applicants arriving at a newly offered apartment, trying to impress the landlord with their credentials. And yet there was something crucial missing -- specifically, two words I knew had to be part of the story.

Not that I have any special knowledge about San Francisco's housing market -- in fact, as of yesterday morning I didn't know a thing about it. But it was immediately obvious from the story what was going on. To an economist, or for that matter a freshman who has taken Economics 101, everything about that story fairly screamed those two words -- which are, of course, ''rent control.''

After all, the sort of landlord behavior described in the article -- demanding that prospective tenants supply resumes and credit reports, that they dress nicely and act enthusiastic -- doesn't happen in uncontrolled housing markets. Landlords don't want groveling -- they would rather have money. In uncontrolled markets the question of who gets an apartment is settled quickly by the question of who is able and willing to pay the most. And so I had no doubts about what I would find after a bit of checking -- namely, that San Francisco is a city where a technology-fueled housing boom has collided with a draconian rent-control law.

......

None of this says that ending rent control is an easy decision. Still, surely it is worth knowing that the pathologies of San Francisco's housing market are right out of the textbook, that they are exactly what supply-and-demand analysis predicts.

http://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent-affair.html

It's also worth noting that cities such as Boston seem to work just fine with no rent control.