I totally don't get it. Why not use that money to build more apartments instead. Why take on the liability with these apartments beiing asbestos contaminated and needing more money to get rid of this. Too me there is the stench of corruption but I don't have evidence. My Hanlons razor is not sharp enough to cut this here though.
It's obviously corruption. Corporate landlords get to offload their dodgy property to the government and run away with the cash, without the usual time and expense of selling each property on the market. By cynically cloaking themselves in populist language, they're able to easily manufacture the consent of the public.
Berlin doesn't care about money. Back when separated by the iron curtain, Berlin always got a special deal in federal/state finances because of its situation. After reunification, Berlin was pumped full of money because it was the new designated capital city and showpiece for unification. Nowadays, some of the special deals still remain, plus Berlin is awarded absurd amounts of money from the "Länderfinanzausgleich" (state finance balancing mechanism), meaning that the richer German states pay for Berlin's deficit.
So Berlin is in the comfortable situation of that one no-good family member on social security who will always find someone to pay their bills. Why change anything, why stop spending all that money, if more keeps coming without any effort in any case?
There are, but they can only audit and report. Change and punishment would need to happen politically, but that would need a majority of states. Two thirds of the states profit from Laenderfinanzausgleich (to various degrees) and will not change anything.
> To me the consent of the public is even more shocking.
Is there even consent? The referendum (Volksentscheid) hasn't happened yet. I wonder how this haphazard move by the current Red-Green coalition Berlin city administration is even legitimate when the referendum is only due more than a week from now. Unless this was done to pre-empt losing at the ballot box.
This is a complex issue. if you add apartments for the same number of citizens prizes should go down, but that's hardly the nature of the system we are working with here.
If you have a busy highway and add more lanes will traffic jams go down?
But this can happen with certain products, including housing, by driving new demand. Imagine your street has a great fruit store that caters to locals and is a bit busy but reasonably priced.
Three other fruit stores see the demand and open up, offering slightly different fruit and other higher margin products like pies and smoothies. People start coming from all over the city for fruit, and tourists come to try local fruit they can't get at home.
Now you have four busy fruit stores, and they gradually raise prices and focus on higher margin items instead of everyday fruits and veg.
This happens all the time with bars and restaurants, too, as a neighborhood gets trendy. And it can happen with housing, because upscale housing brings rich people to the neighborhood, which makes other rich people feel more at home, even in less fancy housing.
People who already own property don't want new apartments in their neighborhood because the fear is that those would drive house prices down. Plus they already got theirs, what do they care about anyone else?
Thankfully it's not really anything like most people who have this NIMBY attitude, just the loudest ones.
The research I've seen (e.g. [0] [1]) consistently shows a modest decrease in rent prices for existing renters when new housing is built. Are there studies showing the opposite that I'm not aware of? I understand that there are two competing effects at play (which [0] calls an amenity effect vs. a supply effect) but my impression is that empirically the latter seems to reliably outweigh the former.
I can’t recall the article I read about it - sorry. It probably didn’t cite thorough studies though. It took into account the fact that higher population increases wages (opportunity), which would rise rents. Similar to amenity effect, but iirc it applies to the city as a whole, not just the neighbourhood.
I don't get why he's being downvoted - although maybe too general of a statement, I can completely see how new development in an area could actually drive rent prices up - development also affects demand - from gentrification to things like opening business and infrastructure scaling making the area more attractive.
I've seen this happen in my city - there's a really renowned developer building high quality mixed residential-buisiness complexes - as soon as they started building a new site the surrounding prices went up, this happened in all of their projects I've looked into.
But they are the most extreme example. I'd guess that most of the neighborhoods that are seeing active development are increasing prices faster than the rest of the market.
