Berlin now home to soaring rents and rising tensions
latimes.com
latimes.com
That combo seems to blow up house prices and rents.
Higher interest rates might depress prices for cash buyers, but it seems doubtful that normal people getting mortgages would be any better off.
Its quite interesting how most people subscribe to religions that tell them to help and care for their neighbors, community, and those who have fallen on hard times, yet in their own daily lives they actively work to bootstomp the poor. Those beliefs and actions do not reconcile :P
This isn't the guy they highlighted (person was a man), but similar: https://www.csmonitor.com/USA/2011/0913/Susana-Martinez-Can-...
That being said, nothing wrong with being against illegal immigration. It's illegal for a reason. But being a beneficiary of it and not being understanding of it takes a certain type of skill.
Not sure about Iași or Brașov. Bucharest was expensive before and not quite to recommend.
In Poland (where I live, although I'm from Italy) they get 50k/y before taxes, but taxes are 19% flat and the cost of living is about half compared to Italy.
Go figure...
Devs are paid terribly here. Yet I've seen HR jobs for tech firms offering over 50k. Messed up.
Same problem, salaries are around 55-70k for a decent engineer and rent is at least 1.5k month for a tiny place.
To me it's close to insane.
On the other hand, 1.5k a month can get you a 2 bedroom 10 minutes from the heart of the city. I'm not sure what you're used to but it isn't that tiny for Dutch standards. Certainly plenty for a single person who can get a single bedroom in a decent location around 1100, too. And if you've got a partner or roommate, it's pretty trivial to pay less than 800 per person.
Further, it's pretty easy to pay much, much less and still have a short commute to work. Again, it's not ideal but it's different from some US situations where you need to live 2 hours outside the city you work in, to afford the rent with the money that job earns you. In Haarlem, Utrecht, Hilversum are all 15-20 minutes away by car or public transport.
But it seems to be getting worse quick, particularly for those who don't have a well-paying job and a family it's a shitty deal, you're essentially forced out of the city because social housing waiting lists are 15 years.
(On a side not Barcelona is pretty strict on AirBnB. Still screw AirBnB, there is no need for residential accommodation to be used as hotels when rents are getting ridiculous like this).
Amsterdam is quite strict about airbnb too, entire apartments can only be rented out 30 days a year, but it's hard to regulate. Basically, you can get 150 a night, i.e. 4500 a month for apartments that normally rent for 1500. So there's quite an incentive to break the rules. Basically, if you have one 1500 home, you pay 18k a year, rent it out for three times that (54k), and basically live on a median salary at the cost of managing a single rental. It's pretty crazy.
I'm quite okay with tourists, but I think they should put a big fat tax on them. The notion that there's 7 billion people who may find your city of 1 million people an interesting place to visit, puts the locals at a gigantic demand-disadvantage. It's virtually impossible to compete on free market economics.
But if tourists are still paying 150 a night, but landlords are only getting 75 a night after-tax, then locals who can 'only' pay 50 a night can compete for space, you can keep tourist flows in check but keep it open to tourists too, keep your city open, let tourism sustain the local economy etc.
That having been said, Amsterdam has a few unique problems. For one, it's got an old city centre, the image of which is part of its protected heritage. That's why it's general policy not to build high-up, which means you're limited in your population density and get very expensive housing. In general building upwards is also tricky because it's a city built on swampland. Secondly, the crisis hit pretty hard here and construction halted for a long time and is only now picking up, but with a lot less (labor) capacity than before the crisis which had to be shed off to survive. Then there's the fact there just isn't a lot of space left to build, the Netherlands doesn't really commit to urban sprawl which is great, but also limits the radius of the city. And if you can't go further and you can't build upwards, plus you're not building as fast as you should after a crisis, you've got some big issues.
It probably depends a lot on the city area. It's true that this apartment was not really in the best neighbourhood, but the metro was close and the apartment was awesome.
For a better quality of life for all, we have to start thinking about ways to spread this around more because now it's a one-way stream from low-density areas to high-density areas, the former has no future (it's emptying), the latter becomes unaffordable. (the more density, the more demand/production per square meter, the higher land prices and the higher all costs->prices of any production in that area, not just housing but anything).
Population density can be very valuable (it's efficient, for one), and I'm a big proponent of cities in general, but there are limits. At some point density starts reducing quality of life.
That's the thing though, isn't it? If you have the money for a down payment you are probably not in the group of people most affected by rents spiraling up.
Are they? Most jobs I see seem to pay in the 40-50ksek month bracket. Don't think I've ever seen a 'normal' software engineering job paying over 60ksek. But admittedly it's been a couple of years since I was actively job-searching in Stockholm.
If you look for a 90sqm apartment, you have to plan 1400€ at least. In general, the more rooms you want, the more you have to pay for.
The majority of tech jobs in Berlin does not pay even close to €90k per year. That is the problem with averages. You have a few people earning loads and the rest on much lower income. It would be much better to look at the Median income in Berlin.
People who could be working at FANG are pulling 80+k here amongst the well-funded startups or Siemens etc. Google Munich pays over €100k for their standard dev roles, AFAIK. Zurich is substantially higher, but it's genuinely more expensive.
From an outsider’s perspective, Berlin rents are ridiculously low unless you’re in the inner ring. Low enough I could cover the rent with money left over entirely from the rent I was collecting from a one bed flat I own in a small village in the UK, at the worst point of the €-£ exchange rate. Heck, I could usually do that with the AirBnBs too, despite their markups.
Yes, there is definitely a housing shortage, but as they have rent control the problem I experienced was too many people viewing each place. In one case, there were about 80-100 people viewing the same appartment as me while I was there. Not that my experience is at all incompatible with locals having more problems from high unemployment or low wages.
I have been visiting Berlin for the better part of 8 years and I am astounded at the increase I have seen in living costs. Food and entertainment has also gone WAY up.
In my opinion Berlin is by no means the "cheap" city that it once was. When you combine that with the average salary in Berlin being lower than in other big German cities (and a lot lower than London) then it has become a real issue as of late for most people.
Great for the lucky few that get a rent controlled apartment. Bad for people that don't and for landlords that now can't charge enough rent to cover the mortgage.
Having a housing market based mostly on rent obfuscates the other side of housing, namely the owners need to take care of said house.
Seriously, what kind of argument is that. Just because other cities are expensive as fuck, Berlin has to be as well?
EDIT: I mean for experienced engineers.
SoundCloud had plenty of engineers on €90k+. HERE Maps also pays very well. Even a lot of the startups are openly offering ~€80k on StackOverflow and AngelList for genuinely skilled Ruby/JS developers and you can always negotiate a little higher.
David Ricardo rides again.
Seriously though in the UK we have had immigration over the last 20 years and that must have led to higher demand and prices. Best estimates are about 20% in 20 years in England.
https://fullfact.org/immigration/have-house-prices-risen-bec...
BUT
English house prices have risen by 320% on average over this period.
Other factors are - getting married later, more single people, more divorced couples, and financialisation of housing.
Probably a similar story in Berlin.
However, since the cheap money from the banks, more people are orienting to buy than rent, which is quite different from the past.
- highly skilled workers (IT, Finance, Sales, Marketing) that earn much more than average german folk, and compete for housing with upper class berliners
- unskilled workers (constructions) that live usually in temp housing and don't attempt to rent a flat for themselves.
As for the refugees, most of them still live in camps distributed across Germany and if they get a flat subsidised by the state it will be in some low demand neighbourhood.
The poor people in many cases aren't paying the rents directly. The local governments are renting places at or above market rates to house poor people.
But on the whole the rising rents in Berlin is more due to the influx of European tech workers and the like, rather than refugees.
(Subsidized housing as in: The government subsidizes your housing project if you agree to fixed rents for a certain period of time, afaik 20 years or so.)
This seems to be a possible hypothesis. Could you validate it?
Germany has always had very low home ownership rates. The influx of migrants has put some pressure on rents (esp on the low end of the spectrum) but hasn't caused the surge in prices for houses or luxury flats. That was mostly driven by a booming job market, higher wages and low interest rates.
Berlin was always very cheap compared to other German cities. What we've seen now is more a normalisation than a bubble. But it certainly took some pressure of other markets that already were at very high prices.
Luckily, zoning laws in Germany allow new supply and there's a lot of that coming in soon. Some economists expect prices to fall by up to 20-30% in some areas over the next years as supply comes in and interest rates go up (likely starting 2019). That would probably be a healthy correction, easing the tensions that have developed.
An exception is high rents for flatshares. Not all flats are suitable for that so that an influx of young people (e.g. students) can increase prices for flatshares much more than that of other flats.
> Lustig pays $300 a month from her $800 disability check for the 570-square-foot apartment, located in a newly fashionable district only a mile from Tiergarten, a leafy city park that's one of Berlin's most popular.
$300 per month for even a small apartment in a good district is incredibly cheap. Why on Earth would you expect to be able to afford such a place on a disability check?
Not to be "that guy" with the unpopular opinion here, but I'm not even sure if the landlord can even cover the costs for the apartment from what she's paying.
Its quite refreshing to see a different perspective on housing, as it isn't a fungible commodity like you suggest, where the dollar is the ultimate arbiter. People build their lives around where they live and make deep investments in their community. Some artificial "free" market that is terribly dysfunctional (and irrational) like we have here in the US is a poor choice when most of your society isn't landed gentry.
It comes down to what you think money is for. In Europe the general consensus is that there are constraints the effects money should have.
In Europe? Yes it does. If you're a longtime renter in Vienna for example it's almost impossible for the landlord to raise your rent or get you evicted. There's some decades-old contracts with renters paying 200-300€ for a 100m² apartment. These can even be passed on to family.
That's just not true in most of Europe. Having lived in several countries now, the laws are usually very tenant oriented: after some time landlords cannot terminate leases in most conditions and the yearly increases are regulated.
I disagree. I also disagree that living somewhere gives you a special-citizen's pass. It's somewhere in between. You want to give room for the market, but you also want to consider cities are a function of their neighbourhoods, their communities, the networks, the people, the bonds, shared history, local culture etc. You can't just break up an existing community for money. You need to find middle ground, let the market operate while trying to work to keep the community intact.
I mean, I know it's really easy (and cheesy) to say these words. Finding that balance is really hard, and at some point there is a trade-off between government intervention in the market or letting (sometimes vulnerable) people fend for themselves. And that isn't easy.
That having been said, $300 a month for a $60k apartment isn't little by European standards. That's a 6% rental yield, it isn't low.