A ruling in a Berlin court may have big effects both on housing and rents in Berlin and the availability of vacation rentals in the German capital which has both a growing tourism trade and a growing housing shortage.
A law passed ten years ago sets aside some housing for long-term residents and bars changing the apartments to commercial or short-term use, and allows officials to order them returned to long-term use. But, until a recent court ruling, was applied only to properties shifted or ‘misappropriated’ after the law was passed.
The ruling by the Upper Administrative Court of the state of Berlin-Brandenburg applies the law to properties that were shifted without legal approval even before the act was passed, potentially returning several thousand units to long-term rental, easing a housing crisis that has seen rents more than double in the past ten years.
While forced return may involve a lot of properties, it will not totally alleviate the situation, which requires a great deal of new construction as well, as much as 20,000 units per year. If authorities use their full powers under the ruling, it will certainly also make legal Airbnbs harder to come by for visitors.
That is not my view at all. A good landlord knows the value of a good tenant and will want to keep them more than getting a few dollars more from an unknown tenant. If an employer needs workers and they can’t find housing, he will likely assist them in doing so. Otherwise, he can’t run his business.
But government dictating what people do with their properties worsens the problems. It does not improve it. History has taught us that lesson again and again.
The market may be brutal, but government regulating rents (and hence profits) will not solve the problem. It will only make it worse.
Perhaps governments could encourage incentives, such that people would want to invest in apartment real estate? Say a tax holiday for a few years as an example. That might be a better solution to the problem. I don’t know how they expect 20,000 units to be built if investors will question whether their investment will be profitable in the present or in the future. Would you invest your money into something that you thought would be a loser?
I understand your point, and I think enough has been said about this.
Nothing discourages new apartment construction more than a government limiting how units can be used, and how much private owners can charge for them.
The crisis will get much worse.
In your view, then, landlords should be able to remove a tenant any time someone else is willing to pay more? And there should be no distinction between long-term family housing and hotel-like accommodations? I think that’s a recipe for chaos.
For a good example of what that can look at, consider the Colorado and California resort and university towns where workers needed for those places can’t live there or even near!
Sadly, not all landlords are good landlords and not all employers are able to provide housing or housing assistance.
We’ve had too much experience of bad landlords, illegal conversions of large apartments to small rooms, and much more to allow me to think that ‘the market’ is an efficient, or fair regulator.