The truth is that rents in Berlin are exceptionally cheap compared to other major cities. Try finding a flat in London or Paris for <10€/square meter/month that is half an hour bike ride away from the city center.
The only way to keep rents this low in the face of rising demand is public housing that is rented out below market rates to low income tenants, or via a lottery.
> The only way to keep rents this low in the face of rising demand is public housing that is rented out below market rates to low income tenants, or via a lottery.
Pretty hard to do in a dense city and doesn't help very much. Unless kill Berlin's character and transform the city center into a collection of skyscrapers, demand for the city center will always far outstrip supply. Berlin is not San Francisco, where large parts of the city center are single family homes with two stories or less.
Berlin really isn't that dense, and it's surrounded by Brandenburg, which is a whole bunch of flat, empty land. Furthermore, the rail network exists to handle extra capacity, so there really are no more physical constraints on building further.
At some point you’ll run into construction cost limits for multistory dwellings. I don’t know how close Berlin is to that point but given how much cheaper their rent is than other major cities they’re probably doing a better job than most of building housing.
Berlin is not close to this tradeoff point. Tokyo's special wards have a population over twice as large as Berlin in an area about 2/3rds as large as Berlin.
There's a good reason most of the most-expensive places are on tight costal areas like SF and Manhattan, where outward expansion is possible without making any positive internal changes. Just constantly pushing out from the middle via gentrification instead of any realistic market development to match demand.
Not to mention NIMBY-heavy political systems which are common in urban areas... they are always extremely hostile to new development. Which of course benefits current residents in the short term but is a disaster for everyone in the long run.
> At some point you’ll run into construction cost limits for multistory dwellings.
And Berlin is light years away from that. A 30 storey apartment building there is already counted as a "skyscraper," while Chinese are about to start talking about 50 storey as "a new norm" in some more expensive parts of the country.
One of the reasons for the cheap rent is the fact that the population of Berlin is still below what it was prior to WWII. I found it quite baffling at least when I read about it.
Nope. The difference is that you had far more people living in the same dwelling units. The population of Manhattan peaked around 1910, at 2.3M, it is 1.6M today.
Berlin is overall smaller than before WW2. And it shows, the place is really empty and spacious compared to comparably attractive cities.
The issue is that Berlin people like it that way. They don't want high rise buildings, let alone skyscrapers. They want their local "Kiez" culture, where you live, eat, meet and have everything around your house. Berlin doesn't have a CBD, and it doesn't have a real city center. It has many equivalent ones. It's like a huge collection of villages.
Berlin is different from Paris or London, and certainly NYC, most importantly in that it is not cramped. There are numerous huge empty buildings and free areas right around the geographical center.
The issue is not space. The issue is buildings.
Building in Berlin is difficult. It needs to be pretty and fit the area, its spaces need to be open to the public or accessible, it needs to provide public infrastructure and provide for kindergartens, doctors offices etc, it can not be too large, it needs to have x% social appartements, and it can not have more than y% luxury flats for sale etc. etc.
Is that good? I don't know.
I compare it often to places in developing countries, where you can build up huge areas of high rises indiscriminately, and if you wanna have gated areas for rich people, that's fine. That's why the sidewalks are usually unfinished just outside a given area.
Not so in Berlin. Building something is like an expensive privilege.
And hence, there isn't enough space for housing, even if there is certainly enough space to "be".
It wasn't just a one-time shock from WWII. The population of East Germany (which includes most of the Berlin metro area) declined more or less continuously through its entire existence. Out-migration to West Germany and elsewhere was a big part of this, and birth rates were also very low.
Almost nowhere in the city center are the rents less than 10€/sqm now in Berlin. If so, the flat is probably in a very old stable and in a not so good condition.
I pay 10€/sqm and need 30 minutes by bike to Brandenburg Gate. That's for a four year old contract. People who have been living in their apartments for decades, that is, the people who are too old to easily move and fear rising rents, usually pay less.
A half hour on bycicle gets me from the countryside to Alexanderplatz and the Fernsehturm, changing roads just once, if I trained a bit and get a green streak. In the inner city you will struggle to find 10€ p m², even in the outskirts where I live, now since the rents increased, unless it's run down.
The truth is that rents in Berlin are exceptionally cheap compared to other major cities.
What the article is concerned about is not how current rents in Berlin compare to cities like London or Paris. But how they compare to rents in Berlin just a few years ago. Or that is -- the impact of rising rents on, you know, local people.
The only way to keep rents this low in the face of rising demand is public housing that is rented out below market rates to low income tenants, or via a lottery.
There are multiple strategies available, and no one strategy will be sufficient. That was the main point of the article.
> The only way to keep rents this low in the face of rising demand is public housing that is rented out below market rates to low income tenants, or via a lottery.
Except for the fact that poor people aren't the ones driving up demand or prices for decent housing...
> Or just a have a free market and abolish building codes.
Building codes reduce transaction costs by avoiding having to inspect every single thing in a building every single time the ownership changes.
Building codes massively reduce the load on the legal system that would otherwise be required from all the different people suing each other to determine fault when something inevitably breaks.
Building codes reduce death from things like fires because they make sure things like fire exits exist.
There are LOTS of countries with minimal building codes. Take "free market" Somalia for instance. Would you seriously switch with them?
How is it disrespectful? The majority of the people in Somalia probably share his opinion, and the ones that don't are profiting from the corruption there.
It's disrespectful because there's no actual attempt to draw a serious comparison between the two cases; Somalia is used as a crude stereotype, and the reality of the people living there, and the real progress made in the last years is ignored.
But hey, maybe I'm wrong: tell me, what specific drawbacks do you see in the building standards of Mogadishu or Hargeisa vis-a-vis Berlin?
Increasing the housing supply isn't working. Wealthy landlords can afford buy new houses at a good price for the builder, and then the landlord rents them out at the current rental price, so rental prices don't go down and people can't afford to compete with the prices landlords are willing to pay for houses which is keeping house prices inflated.
Unless something significant happens to regulate the housing market we're going to end up with property being something that no individual owns, and everyone rents a place to live from a corporation.
Putting the reasons behind building codes aside, the free market doesn't favor social mixing. Profits are maximized by enclaves for the rich and undesirables are pushed out of the city center. I think it's quite important for people of different social classes to live in close proximity and for their children to play together and go to the same schools.
It's horrible. They do everything to prevent more housing from being built.
The fact is, the city is just popular, so people are moving in, which drives the prices up.
The government of Berlin consists of incompetent socialists. Just look at the disaster of the new airport for a popular example. Please don't take any cues from them. They only persist because Berlin get's a lot of subsidies from the rest of the country.
The thing is what would happen if they respond yoy he growing demand and build more housing ? If the economy of the city slows down even a little bit it will be hit hard with bad debt. Companies are currently mushrooming in Berlin. Keeping rents affordable could in fact help the people and help create more companies there.
I don't think the city should do the building, so I don't understand what you mean by bad debt?
Affordable rents don't help much if you can't find a place to rent.
It is not just a problem for people who want to move to the city, but also for people whose situation has changed, and who now can't move. (Like having kids, switching jobs, that sort of thing).
Everyone and their cat wants to live as close as humanly possible to the hip center of the hip city. But of course, they literally do not want to pay the price. Why is there a vegan bakery specialized in Afghan Bagel[1] around the corner? Because there are enough hip, young professionals to pay for even the most unlikely specialty. Business can afford to cater to the most extraordinary taste, but only because there are so many fluent customers. These customers then simply drive prices.
Due to the limits of public transportation, there are basically three ways out of this situation:
1. Rent ever-smaller, modernized apartments
2. Move away from the center
3. Get out of the city altogether
Modern urbanites will not pick any of these options. They want cheap, large apartments with basically no insulation and 4m high ceilings. They do not want to travel more than 10min with the subway. And the thought of leaving Berlin borders on a crime against humanity. Now add to that the part of the population that lives in the center of the city for decades and literally cannot move anymore and you have a really bad situation at hands.
IMO, it is ironic how the modern urban population that is so quick to assign blame for climate change (to car owners, carnivores), social injustice (to white men, preferably older), or simply a lack of mobile network coverage fails to understand their own contribution to the problems of a modern city.
Sorry, but I needed to vent that.
[1] Exaggeration. I don't even know if there are/were any Jews in Afghanistan, but I like good Bagel.
" it is ironic how the modern urban population that is so quick to assign blame for climate change (to car owners, carnivores), social injustice (to white men, preferably older), or simply a lack of mobile network coverage fails to understand their own contribution to the problems of a modern city."
What are you talking about? Cars ARE half the problems of a modern city. Car owners are the other half. Rip out the damn parking and put in flats. Ban cars and put in bike lanes. They're far, far more efficient, and have the added benefit of not mowing down pedestrians and boiling children.
Can't agree more. Your point is also applicable to people who delude themselves into believing an "off-grid" or "homestead" lifestyle is less burdensome to the environment or lends to a less consumerist way of life...
If you're _really_ off-grid, it probably is. A hermit living off the land in a wooden shack they make with hand tools and solar panels on top, using a mountain bike to get around, probably doesn't have much of a carbon footprint.
The main issue is when you're still basically on-grid but a long ways away from everything, and depend on a car.
Though I am probably biased because I just bought a bit of land and hope to grow my own food on it. Pretty easy bike ride from the train station, though, and I work 100% remote.
Good plan. More people per square meter. That means you have shorter ways and switch your congestion from the road or the subway to the elevator in your apartment complex. Might even be better for climate but does not sound like a better way of live.
If you want to remove car ownership you should try to provide an alternative that is actually better. If you want to avoid congestion, don't create a massive black hole in the center of each city that everything gravitates to.
Public transportation in Berlin is good, very good - it is the alternative that’s actually better. And the city does not have gravitating center for commuters - at least not the same way as other big cities: office density in Mitte or Kreuzberg is nothing compared to Manhattan or Moscow-City.
"Nobody goes there anymore! It's too crowded", is basically what you sound like.
There are many many people in the world who love cities. All the things that you hate about cities, they love.
Cities make up like 1% of the world wide land use. How about we leave this 1% of land to the people who love cities, and let the rest of the people who don't, to have the other 99%?
Rents out pace wages in suburbs and rural areas too. They rise in SF, Fresno and Anchorage. Even places people flee like Flint Michigan, land costs rise. They are unbearably high even in tiny apartment Tokyo where a 4m ceiling means you have no roof.
They rise in places with bad public transportation and good. The rise in supposedly under-priced Berlin and supposedly over priced San Francisco.
Land is not a normal commodity and the market has never fixed this anywhere using indirect tweaks. By all means, build more public transit but it won't fix housing prices anymore than it did in LA
The LA metro didn't start construction until 1990. Prices have risen by a factor of 6 since then. Of course they probably would have risen even more but it was obviously inadequate to reduce prices.
While I do agree that land is different, sometimes I think the problem is that people see it as such. When housing markets rise people get rich, just like they do with e.g. stocks. The lack of affordability is a factor of inequality, and especially inequality in opportunities. That is why moving to a smaller cities isn't a solution for most people, because the problem is with opportunities which are appearing in cities and disappearing most everywhere else.
Stock, in principle, is an investment in an enterprise that creates wealth. Like building cars or growing wheat.
Buying and selling houses merely moves wealth around (typically from younger generations to older). It creates nothing, incentivizes nothing and looses more and more to mortgage holders. It can indeed make people rich but only to the degree someone else gets poorer.
The trend is for an ever growing number of single family homes to become rentals owned by investors. As prices rise further and further above middle class ability to afford, this trend will increase. You can make far more money buying a house and renting it than buying it and sitting in it. So in the long term owner-residents are never going to be able to compete for homes with large investor in an unregulated market.
There’s quite a strong drive underway now to increase construction, and thanks to some rather bad political decisions 70 to 20 years ago, there are quite a few lots available for it.
The pipeline from planning to construction is a bit long and most of the projects are still a year or two away from breaking ground, but it is coming. There isn’t too much NIMBY opposition to housing, with the notable opposition of one successful referendum banning the re-zoning of (parts of) old Tempelhof airport.
At least in big cities it is almost never that people don't want to build more, but that:
1. Property owner do not want to see their quite significant loans, or investments, decrease in value.
2. Renters do not want to get priced out of the city, having to leave a good job and move their kids away from their friends.
In addition to that while seemingly intuitive in practice building doesn't seem to decrease costs. Presumably because:
3. Land owners and construction companies want to make as much money as possible.
Unless you can override these three groups, or get them to agree, it is a social issue and building more will make things worse. Look at the record from essentially every city that has been building. If just building more worked there would be good examples and the far majority isn't.
3. Land owners and construction companies want to make as much money as possible.
Everyone does. Greed is only greed when it's someone else. Developers in cities with permissive land-use and zoning laws aren't better people than developers in cities like San Francisco or Vancouver. It's just that there are enough of them and there's enough development that they need to compete with each other.
Unless you can override these three groups, or get them to agree, it is a social issue and building more will make things worse. Look at the record from essentially every city that has been building
Stop. Just stop. Seriously. This trope needs to die now.
This is exactly what anti-housing advocates in Vancouver are claiming right now - that the city has been building and building and building, and prices just keep going up. So why give those awful developers what they want, right?
What they don't mention is that the metro area population is growing by more than 2% per year and compared to the number of homes being built each year, we're hopelessly behind. The reason prices keep going up is because we're not building enough, such is the incredible demand to live and work here. And I suspect this is the case with most cities with crazy-low rental vacancy rates and crazy high prices.
Berlin (and Vancouver, and San Francisco) will do anything to reduce housing costs except build more housing.
>This is the key to Tokyo and other very large metropolis cities.
But they also live in small apartments and homes. I'm not convinced that Tokyo is a good example here.
The key to this problem is to have jobs in places that aren't large urban centers. This way the population spreads out and housing becomes more affordable.
I don't completely agree with your assumption that living in Tokyo means you need to live in a shoebox (and especially not in Osaka which is about 2/3rds the price of Tokyo), but actually I think there's a case for cheap, somewhat-cramped housing with good transit access to the city, for those who want it.
In Japan, a middle class family can own a somewhat cramped (say 900 sqft?) 3bedroom house/apartment walking distance to a world class rail system and generally walking distance to schools and some stores too.
In America's top cities, a middle class family can't afford to own a 3 bedroom apartment with rail access generally, so they move outside the city to the suburbs where they often have to drive to work - which means they need to buy a car, buy gas, etc
But if you don't want the lawn and the picket fence, why is this the only option available? We've taken a one-size-fits-all approach with covering the vast majority of the country with big suburban houses, and the free market is proving people want options, evidenced by wildly inflating prices of urban properties.
...also loans (in the USA) are determined on the size of the house as collateral. You are incentivized to buy a large house and small land. I would rather buy large land and a small house so that I can grow more food, trees, other natural resources. Our family has no need for a large house and they are inefficient to cool and heat.
That creates gridlock, because even if people start by working close to their home, they'll change jobs and start commuting farther, and you can't have a dense network of public transport over a huge area, so people start using cars and clogging up everything.
Don't think so. There are good reasons why the existing centers are drawing more and more people and business. Moving to the outside is often detrimental.
A better way may be to create new urban centers or develop lesser ones.
This is also how Tokyo does it. There's no main, well-defined downtown where people go to work. Spreading the commutes across the whole transport network is a tremendous optimization.
> have jobs in places that aren't large urban centers
That creates a very different lower-density city. Think about a sprawl like LA rather than a squeeze like Manhattan. Public transport won't work but parking spaces might actually exist. Your Afghan Bagel place will be 1 hour drive rather than 15 minute by subway on the way to work etc.
More space, but less selection and diversity in terms of food, entertainment and other venues.
I guess almost any fix, including better transportation, will mean people/people's jobs will just concentrate faster, outpacing any deceleration of rent increases.
Because people are urbanizing despite the price hikes. Which means they prefer higher rents to staying where they are or moving. Probably because of other factors like commuting, other common distances being shorter, friends and family.
So if higher prices are indeed a problem, holding people back from urbanizing, you'd think they'd urbanize faster if the pressures against it decrease.
It's certainly fair to think that there's some backlog of people who would move in if prices reach some price threshold, which could be considered resistance against the price falling lower than that threshold.
But in the case that you dont build units, you're still going to get some of that urbanization by those who can afford it (or are willing to struggle to survive in the city), and this will drive up prices even further.
You are exaggerating a bit. When I visit Berlin in the summer months, what strikes me is the culture of bicycles, which is much stronger than in any USA city. I recall at 1 AM my friends said “We are going dancing now.” We then rode on bicycles for 45 minutes to get to Berghain. The hip people are willing to bike fairly far to get to the cool places.
I view it from a different approach. The city centers are the most expensive because that's where all the good paying jobs are. Thus if you want to solve the housing crisis, you simply need to shift the density of where these jobs are located. Personally I like the circular city model where you have several CBDs on the outer rings of the city.
The current model basically has all the good jobs in the CBD. The further you go from the CBD - the less jobs and the lower paying they are. So of course you get a housing crisis the closer you get to the CBD.
There aren't actually that many people who can afford Afghan Bagel. Shops catering to niche interests mostly get started because the owners overestimate their chances of success. They try to attract customers for a few months but fail to turn a profit and eventually close the shop. The landlord doesn't care, because there will always be another fool with more dreams than business sense.
In my neighborhood, all kinds of hip coffee shops and boutiques keep opening and close just as fast. The only ones who hold out for longer have been there for decades, so they're probably protected by the cap on rent increases. It also helps to be an ordinary baker rather than specializing in Afghan Bagel, because that way they can get enough customers to keep the business afloat.
You say that like moving somewhere where there are a lot of good jobs is something only snotty upperclass twits would ever want to do. This mental image justifies nimby ladder-raising by trivializing labor mobility, the massive decline of which is a huge problem. E.g. https://neighborhoodeffects.mercatus.org/2017/01/26/why-the-...
People want to live near their work so they can spend less time commuting and more time with their families. The people that successfully do this are usually highest in the food chain and push out of that area all the others lower on the food chain.
Thus cities filled with high-level management types as they're the only ones that can afford the rent and the mortgages.
To be fair, not everyone hates commuting, but many people do, thus the drive towards urbanization.
Furthermore, even if people don't mind commuting, they'd want to find a reasonably nice area to live to commute from. Those nice places get populated and overrun and people lower on the food chain get priced out; again the cycle continues.
Until all the people lowest on the food chain must commute very far distances. At some point, many of them realize that if they were to calculate the commute as unpaid work hours, that they're actually being paid way less than what they make on paper.
So now even those people lowest on the food chain move away in search for higher wage jobs with shorter commute times, and the cycle continues again and again.
The sweet spot is finding a short commute time with low-cost housing. That's truly maximizing your wage.
Why did you need to vent that? How does it affect your life that people like unique specialty shops and, like literally every other human who's ever been alive, want a good value on where they live? You come off incredibly condescending writing this.
> Everyone and their cat wants to live as close as humanly possible to the hip center of the hip city.
I don't agree with this assumption. Most people just want to live reasonably close to their job, a grocery store, and maybe a few restaurants, while having enough space that they feel is sufficient. Maybe add in some constraints for feeling safe or being in a decent school district.
It's ironic how much effort is given to justifying the actual amount while the question of "who gets that cash and why do they deserve it?" gets glossed over.
It's a bit like when Russia privatised in the 90s and American economists told Russia that it really didn't who (i.e. oligarchs) owned everything provided everything is privatised.
> Everyone and their cat wants to live as close as humanly possible to the hip center of the hip city
No, people want to live near their jobs. If we build enough office s for X people and in order to find X home, you have to include places more than an hour away then you're going to fuck up housing prices.
In most decent cities I've seen, there are: the city has several different "hip" areas, and you can easily travel between them with public transit. There isn't just one single downtown.
Berlin is still empty compared to pre WW2. There are huge empty areas right in the center of the city.
There just isn't enough building going on. Building in Germany is expensive, and complicated.
Even though almost anything would improve upon this clustereff of 60's communist architecture, you can not even build a skyscraper because people don't want it.
Berlin is Berlin. Removing it from Germany would increase its GDP.
Nothing makes sense here, and its a chaotic antithesis of the other large cities in Germany.
Heck, they can't even finish the airport because our socialist officials just had to show they can build it themselves (they could not).
What annoys me about this sentiment is that I was never a hipster, or posh, or greedy. I got priced out from anything decent all the same, while my hipster friends got rich. People aren't flocking to cities because they are entitled, though some might be, but because there are no good alternatives in most countries.
There was a Jewish community in Afghanistan but most of them already immigrated. One thing is certain though, bagel was not part of their menu. Here are some chit chat that a youtuber did with Afghani Jews in Israel: https://www.youtube.com/watch?v=1Xq0VEwrSr8
Freezing rents literally destroyed Portuguese city fabric and renting market during that time: landlords didn't want to rent more houses neither repair the rented ones. Until recently wasn't uncommon to have old people renting a flat in Lisbon city center for 20€.
Some do. California froze property taxes state wide. Many cities then instituted price controls on rents. The result is prices over $10 per square foot in cities like San Francisco.
Rent control means that renters have a big incentive not to move to different apartments. I've even heard stories of people continuing to rent their places after they've moved to different cities so that they can keep the same rents if they ever move back to San Francisco.
Freezes on property taxes means that homeowners try to hold onto their home as long as possible. Because many home owners invest a big portion of their net worth into their house, they are often very adverse to anything that might make home values go down (like building more housing).
Frozen rents + frozen property taxes = extremely high rents due to little supply of housing
I live in a different but still expensive Germany city and rent a apartment from a city-owned public housing company. The rent of the landlord's apartments is 20-30% lower than what you would pay in the free market, and in my neighbourhood I can get a pretty good idea of what people do to get one of those highly desired apartments. It's just crazy. I have heard everything short of bribing the person responsible for selecting renters. Calling her daily, flowers, pity stories.. another way to get into a highly coveted apartment is to get a recommendation from a renter who's leaving, basically taking over their contract. Often that involves paying absurdly high sums to the previous renter for floors and furniture left behind, or doing renovations for them.
By the way, getting into the best kindergartens and schools appears to work like that as well. Many German cities are so overcrowded that you need to network like in socialism to get what you want, as there are things that money can't buy (or at least only a lot more money can buy). Those who are not well connected have a hard time to get the city's services, or at least will end up with worse facilities.
The demand is just higher than the supply, and if the demand can not be controlled by increasing the price, people will find other ways to fight for what they want...
Yeah, apartments is one part of it all. I'm trying to find a place in a kindergarten and it's hell. In Berlin kindergartens are free for some time and there are no free places. My wife today tried to find a place in a private kindergarten, no luck even in one for 800 EUR/month.
If we knew German language and customs better maybe it would be easier. But then I would probably just think about creating our own.
We're getting desperate. If anyone knows about a place in a kita in Berlin for a 2 year old, please let me know! Private or whatever, or some kind of coop.
Sorry, can't help for Berlin. My only advice is to speak to as many parents as possible. Ideally you talk to the Kita before the spots become officially available. Then you don't have to compete with 50 other parents, and they don't have to do deal with 50 applications...
I doubt speaking German helps much. Or, at least, I know plenty Germans here with the same problem. If I ever have a child, I would probably join the church across the road just to get a spot for them.
Sorry for not being able to help! I hope Berlin treats you well otherwise.
> Many German cities are so overcrowded that you need to network like in socialism to get what you want, as there are things that money can't buy (or at least only a lot more money can buy).
Looking at the problem from a game theory perspective, it looks like this to me:
Ambitious people want to live as close to as many other ambitious people as possible. So wherever the density of these 'Hipsters' or 'Cool People' increases, the desirability of the area increases. And by law of supply and demand, prices go up.
The willingness and ability to pay higher rent decides who can live in those 'cool areas'.
Now the 'cool people' might say to the landlords: "Hey, it's US who make this area cool! Not your houses! Why do we have to pay you for it?".
It's an interesting point. Is it fair? I am not sure. Maybe. The same argument could hold for Facebook, YouTube or Reddit. It's the users that create all the value. Yet the platform providers extract most of it.
I think that before we can form an opinion on different types of regulation, we should ask: If not willingness and ability to pay rent decides who lives where - what or who will decide instead? And what will be the result?
Very interesting point, and comparison to social media. It seems to me that if most of the users of Facebook, Reddit, etc, were to band together and leave to somewhere they get a better deal - then the value of those sites would effectively become zero. If they could just wield it well, they have massive bargaining power in those relationships. But the cost of organizing such groups, building a new suitably-featured site, and moving there is a large limiting factor. The same relationship could be extended to most networks - including city/housing networks.
But staging this mutiny on social media sounds tough enough - in real life real estate, I imagine it's nearly impossible! As such, landowners get a hefty upper hand, and there's not much power the tenants can wield in that negotiation - even if they do collectively provide most of the real estate value of a property.
That said... what if this bias in network effects isn't eternal, and we humans just haven't been very good at group organization so far? I can imagine a userbase mad enough at Facebook might pick a date a year from now, get everyone they possibly can to sign up to leave on that day, and mass-migrate to an equivalent site with similar features (which doesn't farm $250 a year off each person in data - or at least gives those funds back to the user). With smart contracts to ensure commitment to the move, it could even be a fully-funded and well-organized migration - which might even have negotiation options to abort if Facebook met their demands. People would probably even do it just for the spectacle/coolness factor of being part of such a big rebellion. It's a bit of a pipe dream, sure, but it's conceivable something like this could happen. And let's face it, other than the data/hosting challenges, most of these big social media sites aren't doing anything that difficult to replicate. Hell, I'd go so far as to say almost any company worth the big bucks is mainly being priced on brand and network effects (minus IP/asset ownership). If the networks underlying this got better at organizing and moving/threatening-to-move to alternatives, they could eat that value and pass it down to consumers. Hell, it might even work out that they could be paid to use these services.
The city/housing space is one I'd imagine would be wayyy slower to benefit from any of these potential consumer unions technologies due to physicality constraints, but I imagine it too could be translated into these mutinys. e.g. People could agree to leave a city en-masse to a new one with better (pre-negotiated) rent/ownership prices, leaving the old city high and dry in a bubble-bursting scenario. Of course we don't see this now - or at least, not in any organized form, just an economic drying-up when e.g. a factory closes and tenants can't afford their rent. But perhaps it's possible in the future as mobility, communication and coordination increase? Who knows.
The problem with many German cities are that they are already full. Infrastructure can't keep up with the population. The building density is so high that it's very difficult to find room for more streets or rails, more schools and other public buildings. Parks are overcrowded at weekends.
I think the only solution is to get people out of the cities (or maybe build new cities).
I find that hard to believe. Most German cities are low-rise, not skyscrapers. Elsewhere in this thread, somebody mentioned that Berlin's population today is still below its pre-WWII high.
It was about 4m before the war. Is not about 3.6 Considering that today’s living arrangements (sqft per person) is quite different (larger) than 80 years ago, I am not sure this is working argument.
The simple solution is to build up. Build residential buildings twice as tall and suddenly having larger living units doesn't seem crazy. We have the technology today to build taller buildings than we did before WWII, more economically.
The central problem with all these discussions about housing prices is construction. There isn't enough of it, it's too expensive in some places for what you're getting, the whole thing is completely broken and needs to be fixed. It should not be hard to build new housing units to modern standards.
And suddenly one landlord owns ten companies trough subsidiaries and trusts. This is yet another nice trick that won't work.
Besides, price and demand curve would still apply where it was one landlord or hundreds.
What would help is to encourage housing density to increase supply. That has two main drive: building regulations (mandate building of a certain height) and taxation (tax building by footprint and not by height/units)
Messing with ownership will only make people creative.
> And suddenly one landlord owns ten companies trough subsidiaries and trusts. This is yet another nice trick that won't work.
If you own anything that owns property (and etc. down the chain) then you pay same progressive tax on all properties owned directly on indirectly (minus the tax already payed by subsidiaries if the lawmaker feels so generous, he may not be, because why not discourage creative ownership).
> Besides, price and demand curve would still apply where it was one landlord or hundreds.
Sure, but if ownership is not that beneficial for large capital holders then less money is used to buy properties. If there is less money and same amount of properties then prices drop. Then more individuals can afford properties, and demand for renting is lower and rents go down.
> What would help is to encourage housing density to increase supply. That has two main drive: building regulations (mandate building of a certain height) and taxation (tax building by footprint and not by height/units)
If there's more property to buy but plenty of capital to buy then big landlords just buy more and hold, even empty property. Higher supply would probably drive down price a bit, but not as much as you'd expect.
The problem is not only insufficient supply but competition between people who have too much capital and people who have barely enough. First group just drives the prices up for everybody, as high as the other group can barely suffer through.
Taxes are not a punishment, it is a fair contribution to the costs of having a government and society. If you make it a punishment you turn it into the whip you use to herd cattle, recognizing you treat people like cattle.
Taxes are not a punishment. Taxes are the way of financing government and whatever government decides should be financed.
What to tax however is open for debate. First you have to be pragmatic and tax things you can measure. If you can't reliably measure something people will just dodge your tax. Then you have to avoid taxing too much things that are necessary for the economy.
What you can safely tax are the behaviors you want to get rid of, like smoking or drinking, or using too much electricity, or emitting co2, or hoarding real estate. If you reduce these behaviors through taxing it's all the better.
That's actually not obviously safe at all, you are now basing your recent stands if behavior that in your own estimation is not desired. This creates a really weird incentive structure for legislators and regulators alike.
It is a bit more complicated than that. The landlords are not raising the rent much (because laws exist already in that place) but rather 'offer' a new snow service (that you have to get, even though that we have maybe 2 half snow days a year) for 300 € a year, and a new janitor service for 50 € a month and so on. They upgrade your building (meaning you cannot really live there due to construction noises) and then put most of the upgrading price on top of your rent.
And finally, the big landlord companies do not exist due to success but due to big investment fonds deciding that it makes sense to buy many houses in such a cheap city. And to be honest, the actually good renting laws also play a big rule in this as they protect rents very good and such a single bad renter can become a big problem for small landlords. Also you have to cover so many restrictions etc that it becomes expensive/challenging to rent out (i.e my collegue is currently suing his landlady for a decrease in rent of 580€ per month due to an error in the contract)
> it feels a bit disingenuous to punish people (or companies) for success.
Have been there as well. My current position on this is, that the sources for success are hardly one dimensional. Sure hard work helps, but it also helps to happen to have good contacts, be born rich, be beautiful and tall, been grown up in the right social circles, having met the right people etc. So it‘s less punishing hard work, and more creating a balance with those less lucky.
While I agree that there's many factors that go into success anyone looking to control for luck at scale had better be willing to rack up an impressive body count because those kinds of systemic changes to society are never peaceful. People will not just accept being told they do not deserve what they have and that it is the result of luck. You are not going to get people to give up what they have without a lot of force.
In the U.S., this limit is expressed via property taxes and homestead exemptions; a person living in a building that they own received a ~25% discount on their property assessment;
Why wouldn't everyone's rent increase by whatever that tax is? There's already an incentive to create additional density, money. More units, more money. If there's some tax that the owner also has to account for that changes nothing. It's no different than any other increase in overhead. It just gets passed on.
> Why wouldn't everyone's rent increase by whatever that tax is?
Because the tax is progressive, which means is not equal for all landlords, which means if big landlords increased their rent by their tax then nobody would rent from them because smaller landlords would have smaller rents thanks to smaller tax.
This way large landlords no longer find owning real estate profitable and relocate their capital away from real estate market towards stock market or wherever where it is hopefully less harmful to other players.
Less capital with same number of units drives the price down. More people can afford to own vs rent, so they buy and rent drops further because of lower demand. Ultimately everything lands on new equilibrium of lower rents with government having nice pile of cash on their hands free to use it to whatever new public housing development it fancies, driving prices even lower by increasing supply.
You seem to have the misconception that rents are set by individual owners(a large company, or 1 house/person landlord). In actuality, rents are set by the rental market overall, governed by supply and demand. It doesn't matter if 500 homes to rent are owned by 2 or 200 people.
A tax like that would just make rents increase to X+Y for units owned by large landlords, where Y is the new tax cost. X would not change, making the policy achieve exactly nothing.
You seem to have the misconception that rents are set by supply and demand that are free variables. In reality rents are tightly bound to the mortgage. Rent for a property is roughly the same as mortgage for the same property. It can't be much higher because otherwise people would just buy instead of rent. It can't be much lower because that would mean that property is in unattractive spot which drives the price of property down to match.
> In actuality, rents are set by the rental market overall, governed by supply and demand. It doesn't matter if 500 homes to rent are owned by 2 or 200 people.
In actuality price of a thing depends on amount of units of a thing and amount of capital that people interested in the thing have. If you drive out some amount of capital from some market the prices will drop. As properties prices drop, rent drops.
> A tax like that would just make rents increase to X+Y for units owned by large landlords, where Y is the new tax cost. X would not change, making the policy achieve exactly nothing.
It would be X+Y for large land lords but X+y for small landlords (where y<Y because the tax is progressive). So large landlords wouldn't find much demand for their properties, which would force them to sell to individuals and smaller landlords. Which is exactly the point of the tax.
It walks like a duck and quacks like a duck. The only people who say it's not a duck are the ones who want to make their particular pet duck seem more agreeable to people who do not particularly like said duck.
I moved from Belgium to Berlin 2 months ago. To me Berlin looks really spread out compared to Belgian cities and a lot of other big cities.
To test my feeling I just checked this map [1].
It's clear that the population density in Berlin is lower than in other European cities like London or Paris. Even smaller cities like Brussels, Copenhagen and Stockholm are denser.
So I think there is still is a lot of potential to relax zoning laws and let more homes be built. This is the best way to lower rents imo.
Won’t work. Due to higher property sales taxes here in Germany, any building complex worth more than a couple million is already owned by a shell company. If the building is to be sold, they sell the shell company instead to not have to pay property sales tax. Such a law would simply result in each building be wrapped in a shell company.
This is pretty much the same as banning non-resident owners, bit it's formally a punitive tax rate rather than a ban.
The problem is still the same problem, rent markets collapse.. so, public housing would have to plug that hole.
I think it's important, in the context of public debate, to keep things simple. If an idea approximately transposes into another one... address them as a single idea.
I'd catalogue this one under. "Owner-occupancy and public housing only."
This is not realistic in most places, but maybe in the context of Berlin it's possible.
Clever? no. Clever is how you get to where we are now.
The law(s) that would need to re-written are the core laws that define what a company is, how ownership, liability and such work.
These are all clever-complicated. They cross jurisdictions, and enable cascading ownership (companies, owning companies, owning trusts, etc.), each with different (incompatible) rules: tax, reporting & transparency obligations, definitions of terms like profit. They've been complicated constantly for hundreds of years, trying to encourage one things and discourage another, usually for a small picture reason.
Most of the "tricks" involve using multiple types of legal "persons" registered in multiple jurisdictions with multiple ownership structures. New laws try to plug certain loopholes, open other ones, or achieve a political or policy goal. This complexity is why it's so hard to do anything with company law.
There is, but the trend in US (and UK) law has unfortunately gone down a path that makes this very difficult. The letter of the law is given great weight, no matter the intention of the law.
For example, in tax law, the game is to find ways to not actually violate the exact letter of the law. The idea of the spirit of the law has no force; everything has to be precisely outlawed. This, of course, is an infinite game that will never end, and leads to the endless games of shell companies and foreign domiciling and so on and so on; everyone knows that this is not what was intended, but it's what we have.
The alternative is to write into law the intentions of the law, and allow subsequent assessment and judgement. Some places do this, and in this way the game of finding ways to ever so slightly dodge the exact wording of the law is a much less fruitful game.
>The letter of the law is given great weight, no matter the intention of the law.
You are assigning the responsibility the wrong way around.
The letter, and the intent, of the law have two points of interfacing: the point of execution (interpretation by the taxpayers or by the courts of law), and the point of redaction (the lawmakers distilling the intent into actual letter of the law).
In case of the letter of the law not representing the intent, we would be much better off assigning the blame to the lawmakers. It is both their primary duty, and also what they have the best tools for. Putting the onus on anybody else than the lawmakers creates perverse incentive to get bribed for sake of writing loopholes into the law.
When the lawmakers fail at properly writing the laws, punish the lawmakers: both vote them out, and also have the media launch investigation into possible corruption - the slip-up could very well be intentional.
There are plenty of laws that are specified in such a way that no matter how you structure your shell companies they still apply. The only way to truely get around that is to start having strawmen owners or unregistered ownership relationships, all of which will get you in trouble with the law.
The law is sophisticated enough to walk trees, and smart enough to have concepts like "beneficial ownership" where who _actually_ owns something matters, at least in common law.
All you people claiming that the only way to reduce housing costs is to build more housing are missing the other only way to reduce housing costs.
Remember, there is not only supply but also demand.
We need to reduce population growth to below zero. A sustainable world population is probably close to 0.9B, far less than the current level of about 9B, and significantly less than projected “stable” population of around 11B
Current world population is expansionist and we are down to less than 300 years worth of phosphates, with no plans to reclaim phosphates from the ocean.
That doesn't work because it's not only general population growth that's driving housing shortages in cities, it's that people are moving to popular cities from less popular places. San Francisco doesn't have a housing problem because too many people had babies in the last 10 years, it has a housing problem because way more people want to move to San Francisco from other US cities than it can support.
Another way to think about it: Japan's population is flat or declining depending on the stat you look at, but Tokyo is still increasing in population.
Yes, housing is a right not a speculation opportunity. Also there should be opportunities for people to get their own houses, like cheap credits with a monthly payment close to the rent.
>Yes, housing is a right not a speculation opportunity.
Let's say I agree with this idea and let's also ignore the fact that by stating it's a right, we are implicitly stating that someone else needs to pay for it with their own money if you cannot.
If housing is a right, does that necessarily mean that housing in a specific area is a right? I mean, I'd love a beachfront property in Maui but we can't all have that.
If we build a few million houses in the middle of Kansas and tell people "there is your free house, as is your right", is that enough? Or do people have a right to a free house somewhere just because someone in their family happened to be lucky enough to live in the same general area at some point in the past?
People in the US are generally allowed to move where they want. If a place becomes too expensive for them to live there, it's possible for them to move elsewhere if they must. I can definitely see that offering help with relocation could be good for society, and I can also see that having a mix of different people in an area is also good for society, but ultimately I don't agree that just because someone happened to pay rent at some point in the past, they and their descendants should be granted a perpetual right to stay in that proximate location forever.
> Let's say I agree with this idea and let's also ignore the fact that by stating it's a right, we are implicitly stating that someone else needs to pay for it with their own money if you cannot.
Yup, we do that sort of thing all the time in Europe. I know zero people that went bankrupt because of an unexpected serious illness and I know zero people that dislike the idea that we should all pool our resources so that universal health care is possible. This also applies to education, unemployment and other things. And yes, housing.
In fact, most of the western world is more similar to Europe than to the US in this regard. Surprisingly, people from the US speak as if social-democracy is impossible somehow... It is not perfect for sure, but many aspects of modern US sound like a a dystopia to me.
> If housing is a right, does that necessarily mean that housing in a specific area is a right?
Agreed, but it should be possible to have renting contracts that do not make you move out of the place you have lived for half a century because some rich kids arrive with macbook pros and a taste for overpriced bad coffee. In fact, this is the case in Berlin, which of course means that some landlords start playing dirty tricks.
I am for freedom. I think that people should, as much as possible, live as they wish. If you and your friends want to build Galt's Gulch, more power to you. If Berliners want to stay away from those games, more power to us.
I am a renter in Berlin, so it is in my temporary interest if rents are limited (not talking about side effects, just in terms of short term thinking). But honestly, if you want to live in the same place for 30 years, maybe you should consider buying it?
If somebody offers my landlord double the price I am paying, why exactly should he be liable to keep me as a renter?
> "I mean, I'd love a beachfront property in Maui but we can't all have that"
The person you're replying to is basically saying: "having a place you can stay in, to keep you alive and going rather than homeless and broken, a safety net in essence - should be a right". Your response: "but we can't hand over free beachfront properties in Maui for everyone".
You're diverting the discussion ("but look at what communism did to Venezuela"). This isn't about free beachfront properties or luxury homes in Maui. This is about a single bedroom apartment with the most basic of utilities for people that wouldn't otherwise have the money or means to afford anything better: students, older folks, sick people, people that face hardships.
There's no entitlement in trades between landlords and people with money - everything happens on mutually beneficial terms. Landlords own property by the right of their investment into it, which was also a mutually beneficial transaction between them and the developers who built it and got rewarded for their work.
Yes, these are the rules of a free market. But if a society or a governing body has additional priorities, rules can be added to such a framework. So, in the end it actually is a question about entitlement. Is a landlord entitled to rent to the highest bidder or not. I'm not saying I'm necessarily entirely against this concept, but I doubt it should be the default situation.
I don't understand why you need to be obnoxiously sarcastic here. There are quite a few situations where governments set limits on how much a good can be priced at. It definitely is entitlement to be able to rent to the highest bidder.
Germany - like many other countries - is not a libertarian state. Pricing caps are not new here, underpricing and overpricing are defined and limited in certain scenarios and for a number of goods like doctor or lawyer fees, medication, books, your ISP, etc.
Obviously one can debate such decisions and their merit but if you simply reduce this to having a "frivolous concept of property" it's difficult to have a conversation with you because it seems like you're choosing to be destructive instead of using arguments.
To simplify: to be entitled to something and to pay for it are some very different things. I'd argue that somebody who claims wealthy people paying for stuff is the same as entitlement is the person who is actually destructive.
As for the other German laws: I can't think of anything good that has come from them. Socialism has a way to sneak up on countries. That's all there is to it.
The problem is that you're simplifying in the first place. You seem to use "entitlement" only in a negative fashion akin to "freeloading" or "expecting something for free". I am using entitlement in a legal sense, in this case being entitled to/having a claim to/a right to buy at the highest price. The German word here would be "Anspruch".
So, we can debate whether the highest bidder has a claim to something. I certainly understand the arguments for it. But there are scenarios where I do argue that this is something that should not be permitted or at least not for 100% of the available goods.
As to your point about nothing good having come from such German laws, I disagree. Health care, legal counsel, medication, among other things are affordable in Germany while they can pose an existential risk in places without such limits.
You are of course not entitled to buy, as in general nobody is obliged to sell.
If somebody should be forced to sell at a lower than their preferred price, the question is, by what rights should he be forced to do so? The government would effectively be stealing from that individual. By what rationale/right? As I said in another post, I personally did not get the benefit of a cheap place to rent in the center of Berlin. Why should I think other people have a right to it?
You mention healthcare, but I don't think you can force physicians to work for an arbitrarily low fee. That's not how the system works in Germany, either. Public health insurance defines how much they are prepared to pay for things in the healthcare system. That is not the same as enforcing a maximum price. And especially with the German health care system, I'd argue that normal people have no idea of the actual upsides and downsides of the system.
If there is a maximum price on health procedures, it means certain procedures won't be available.
I've actually heard that there is already a health care tourism industry in Germany, which means the most skilled physicians might not be available for publicly insured people anymore, because they serve rich people from Saudi Arabia. Sure, in that sense it is bad for the normal people. On the other hand, highly skilled people might not even exist without high incentives, and in the end more people might decide to train to become highly skilled. Expensive machinery might be used for less solvent patients if there is a downtime. It's not so easy to claim benefits of limiting laws.
No he doesn't. People get worked up about having to pay high rents in attractive locations (Berlin, or San Francisco, and so on).
There are actually places in Germany where it is difficult to find tenants and houses decay because nobody wants to live in them.
This is ALL about the beachfront property in Maui. That is the whole issue.
And frankly, as I personally didn't luck out to get one of those dirt cheap apartments in the center of Berlin, I don't quite see why I should consider other people to be entitled to it.
I've always thought that the advent of self-driving cars will contribute to urban sprawl and lower housing prices. I'd happily live somewhere with a 1 hr commute if rent was $3k/month cheaper and I could get work done on the way there and back with no distractions.
In some cities 1 hour commute is from one side of the city to the center or the other way around, not from suburbs to city. My commute is 1.5 hours per direction inside the city, going out would take more. Also spending 2 hours in a car, even self driven, is not the best way to spend your time. Otherwise you can live in a RV parked in front of your office.
I've lived in Berlin for 10 years now. I moved into my place 10 years ago this month and the rent would definitely go up without the rigid German laws to prevent exactly that. By at least about 30-40% I would estimate. That's walking distance from major landmarks like the Alexanderplatz, the Berliner Dom, and the synagogue on Oranienburgerstrasse. I pay a lot by Berlin standards but I live dirt cheap by any other standards. I don't know many places in Europe where I could live this cheap and that centrally. Around 950 euros a month for an 85m2 place, including heating cost. Very nice deal. You need to move quite far out of the center of most European capitals to find anything similar and forget about it in the bigger ones like London, Amsterdam, Brussels, or Paris.
However, that's not the point for the locals here. They've seen people move in over the last decades, claim their public space, and as a consequence their cost of living is going up like crazy and they are not getting a lot in return. That sort of thing creates a lot of resistance. There are a lot of people in Berlin that are not big earners. And only a few years ago they were still getting awesome deals on huge places right smack down in the middle of the coolest city in Europe (after 10 years, I know this is true). I had friends paying less than 600 euros for a 100m2 place. OK, it was in need of a bit of renovation but still. Of course that was never going to last. The same place probably goes for around 1500-2000/month now.
IMHO, as a foreign contributor to the gentrification, a lot of the housing shortage is artificial and it has a lot to do with the local legislation that is designed to conserve the status quo combined with the fact that the local government sold out early for way too low to big investors. At this point they don't have a lot of control because they sold out. Also, this city is growing like crazy and it has insanely high dept due to failed projects like e.g. the new airport that was supposed to open in 2012 an will probably not open for years to come.
So, they are kind of powerless to fix things and their political legitimacy is based on an electorate that would favor draconian measures. So, obviously that kind of thing is very popular with the locals. There's no money to build new stuff and besides they've sold all of the land on which this would need to happen. So, the next best thing is populist measures that don't actually solve the problem but make it look like they are doing something.
There actually is a lot of land in and around Berlin. This city is pretty far from other German cities so there is a lot of country side in all compass directions. Also inside the city there is plenty of space. This city still has less inhabitants than before WW II and the cold war (4.3M in 1939 vs, 3.7M last year). Thanks to the cold war it is kind of very spread out with lots of former no mans land, huge parks, etc. People strange to Berlin always ask where 'the center' is. There's no such thing. And there are at least two areas that could lay claim to that and half a dozen more that are probably more interesting in terms of nightlife, culture and other things you would find in most city centers else where. So, lack of land is not a problem in Berlin. Constructing things on it is. And housing projects for lower incomes is not a priority.
I do not think this implementation is a good use of taxpayer money or government effort.
has developed a reputation for raising rents sharply by finding loopholes in Germany’s fairly strict rental laws.
This is the item the government should rightfully be attempting to fix. Not acting as a market participant.
In the meantime, the firm invests almost half as much as state housing companies do to keep its homes in good condition.
State actors regularly spend 2x-3x their private counterparts with the same results. The difference relates to additional studies and more onerous self-imposed tendering requirements that create no additional value for the end user but allow the state to feel it has made decisions and spent taxpayer money in a justifiable way.
There is a certain je-ne-sais-qoui about people living on the Karl Marx Allee trying to stop a rich person from buying their homes.
From what I see though, the issue that started this is not that there are people controlling too much property, but there is a group of asshole landlords that use loopholes to increase the rent way to steeply.
There is no need to put a hard limit, just an effective limit by having a general wealth tax.
Money flows to where money already is, that's inevitable in a capitalist market economy. There's no need to change that, but progressively bigger piles of wealth should be progressively higher taxed to keep them in check, thus ensuring a competitive market.
Edit: I guess I should have known mentioning wealth tax would get people nervous.
But this is not about taxing your old grandma for her paid-off house. This is about small but increasing percentage, starting at maybe $1M-10M and really kicking in at $1B and above. You can then abolish dividend taxing (that's only fair) and perhaps income tax altogether.
Taxing general wealth would be enough if you just wanted money. But what you want is rather change in the behaviour of the wealthy. You want them to take away their money out of real estate market so that it does not inflate the prices. You could achieve that through progressive real estate tax. This would make holding and renting large amounts of real estate less profitable in comparison to other things rich invest their money into. They would sell so prices would drop and individual ownership would rise.
I don't mean this specifically as a solution to expensive housing, just a general solution to super disparate wealth inequality. The point is not to get more money for the state (income tax could be abolished to offset) but to put a natural negative feedback mechanism on wealth accumulation, instead of the positive feedback mechanism that exists today and makes the uber rich own the world.
I don't think that the sheer fact of some people being incredibly wealthy does much harm and it also can do some good. When the money lands in the hands of rich people it essentially leaves the economy same way as if it was just burned because they won't be giving that money back to real world economy anytime soon. It just lowers inflation a bit so everything becomes a bit cheaper than it otherwise would be.
Rich people being rich is fine. Them buying luxuries for their money or gambling (casinos, stock market, startups) does very little harm and even some good because some of their money comes back to other people and few of them do something good with it.
The problem starts only when their money touches the parts of economy that are shared by other people because they drive the prices up by buying large amount of stuff and hoarding. Things like property or food or raw materials or land. We just need to make those activities unprofitable for them.
Sure, I've actually got nothing against rich people or even the idea of super rich people.
But the whole system is set up in such a way that if you're wealthy you own the world and have to actively screw up to not get wealthier. The system just needs a tiny self-correction mechanism.
And the problem with immense wealth is not raising inflation or anything like that, that is market stuff that will correct itself.
The problem is buying your way into policy control, and people/corporations that are so powerful that not even the law dares touch them.
The law won't touch rich people where they care, their money.
Why are there still tax havens? Why do corporations still make special tax exemption deals? Why are tax loopholes not as aggressively fought as drug smuggling?
And even the case you linked to, very wealthy people are much less likely to be charged with these kinds of crime as well.
The only way to keep rents this low in the face of rising demand is public housing that is rented out below market rates to low income tenants, or via a lottery.