The developed world really needs to start building new cities. People shouldn't be deprived of the opportunity to live in an downtown area just because the people already there feel entitled to their way of life. But, people can lose everything if you economically force them from their homes. That's not desirable either.
My proposal for new cities involves strictly limiting the foot print to enable it to be completely walkable. That would mean you don't have any cars, which is good for many reasons. A lot of what local governments do is complicated by having to service so many different residences over a wide area (think sewage and water, mail, policing/fire protection, road maintenance, etc). If you mostly just build up, then that all becomes much easier, which means government can be much smaller and cheaper. And I think the city becomes much more livable, as a large area around the city is green space, and the streets can be taken over by open air restaurants/cafes/bars on weekends.
This is an incredibly US-centric way of looking at it, the rest of the world really doesn't have the same problems as the US in any of these areas. I lived in Berlin for a time and many places in the UK and around Europe and really none of this applies. People live where the work is, commutes are generally under 30 minutes.
The US owes it's "walkability" or lack of due to Blockbusting by property developers in the 50s that used racism to drive the middle classes out of the cities into the newly built suburbs. No such thing happened anywhere else.
> The US owes it's "walkability" or lack of due to Blockbusting by property developers in the 50s that used racism to drive the middle classes out of the cities into the newly built suburbs. No such thing happened anywhere else.
I think that might've been a factor, but it's an overgeneralization. In Canada, we didn't those race relations problems to anywhere close to the same degree, and yet big Canadian cities are just as sprawled as their American counterparts.
For my money, the major problem with the US and Canada is for the most part, we got to start fresh. A lot of the expansion happened in the age of the automobile, and at the time, we built what we thought we wanted — large suburbs and big arteries to take us between them. This worked pretty well in the beginning, but the further we spread, the more obvious the realization that the design doesn't scale [1].
In Europe, a lot of cities were built pre-car, and although they've seen significant change in the interim, large parts of the original geography are left over. There are some places that consciously designed their infrastructure well even if it was against the grain for the time (e.g. anti-car protests in the Netherlands that led to modern bicycle-friendly Amsterdam; also, Copenhagen), but a lot of it is a historical accident which turns out to have led to better livability than anything our city planners have done on purpose in 100 years.
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[1] It's still not obvious to everyone, but as commute times continue to go up, I believe that broader consensus will form.
"that used racism to drive the middle classes out of the cities into the newly built suburbs."
I'm sorry, but this is not fair.
For whatever reasons (and ironically, after major civil rights advances) - many urban areas on the US became massively violent.
Rates of violent crime increased 600% (robbery) [1] in America overall during the 1960-1980. That's quite a radical increase. And again - note that this was a time of ostensibly major civil rights progress.
To wit - the increase in violence was not so much in rural areas, it was urban, ergo, there was even more than an 600% increase in crime. This was an era of increasing literacy and access to education for all Americans, including those who were underpriveledged. And this was way before Regans+Clinton strategy of mass incarceration.
It's deeply unfair to suggest that a family - of any race - that decides to move to the relatively affordable, calm suburbs, where they can own a full home and have a backyard, and avoid the massive increase in crime - is somehow 'racist'.
If your neighbourhood violence increased by more than 600% over the span of 10 years, and you were having kids, you might just decided to move somewhere else.
I don't think 'walkability' is a thing in any US city other than the one's established before cars, sadly.
On the subject of the article - if the Government is banning the sale of private property, or worse, forcing property sales - this is a problem. Banning to international investors - sure. Buying up land, sure, if they want. But banning sales from Germans to other Germans, or forcing sales to the government - no way.
I was only there a week but when I was in London 20 years ago, a sizeable number of the people in the office lived an hour or more away by train. The first data I could find bears out that London is different from the rest of the UK.
http://www.bbc.com/news/uk-13627199
One shouldn't forget that suburbisation was a Cold War move - a very effective one and something Soviet Union could not even remotely afford to follow. Quite likely that it eventually prevented nuclear war by making it clearly unwinnable for the Soviets.
It also prevented firestorms by making buildings less dense - there wasn't enough density of combustible material. And made it possible for every family (middle class family - which in 1950s timeframe, meant qualified industrial workers, engineers, and the military - those a nation would need most in case of major war) to have a basement to escape fallout. Downtowns have been left to the part of population deemed useless and dispensable.
In Soviet Union, that kind of the most important members of society, lived in apartment blocks in city centers. And because Soviet Union did not have, and could not afford, mass automobilisation, they were stuck with that.
That is a severe misstatement of the other side of the argument. They have nothing wrong with just the act of moving, it's the act of displacing others and changing the community in such neighborhoods.
Moving somewhere always changes the community, and necessarily either involves displacement (move into someone's old apartment) or change in neighborhood character (add net new housing supply). This is a distinction without a difference.
Lots of people moving in always does one of the latter. Either they bid up the price of rent, or someone builds denser housing and thus changes the character of the neighborhood.
So it is a misrepresentation of what the other side thinks they are saying, but a correct representation of what their argument actually turns out to mean.
The trouble with "designed" rather than "evolved" cities is that they tend to be a bit soulless, and inevitably the design reflects whatever the prejudices of the builders were at the time. Hence the famous roundabouts of Milton Keynes, one of the very few cities of the UK that really accommodates car culture.
Personally I think it would be simpler to try to distribute jobs across the existing cities a bit. The UK is over-focused on London and France over-focused on Paris. The US is larger so the effect is spread over the top 5 cities, but we still see that in order to start a tech business people think they "must" move to SF.
I live in Canberra, a planned city that in many ways is amazing and wonderful - but it too suffers from the assumption of the time that cars were the way of the future, as well as assumptions about population growth that didn't quite pan out.
We've ended up with a city of 400,000 that's 40km from north to south and 15km east to west. Public transport is, as a result, highly problematic, and pushes by government to increase housing density (which I think is quite a sensible idea) meet with some resistance.
Planned cities aren't necessarily bad on the whole though - I will quite happily take "soulless" over "gridlocked" and "clean" over "gritty" any day. Canberra may be a bit "soulless", but the more organic cities around us have a very different set of problems with their own negative impacts on livability.
I want to kickstarter a city in Canada. Something along the major fiber lines somewhere nice and fun and pretty. Probably either between Toronto and Ottawa or somewhere out in BC.
Pre-plan things like fiber to every home, smart measures to promote walking / biking, and promote reasonable density (3 to 5 storeys as the default height). Have cool things like a free regular bus to natural areas where people can swim or hike (cheaper than building olympic size pools, no?). Very strict building standards for things like building materials and sustainability. No suburbia or aboveground highways.
In a lot of cases, just "building up" more would probably lead to the population density getting too high, and I think the point is often missed that not everywhere has ground suitable for the foundations taller buildings need.
Really, cities seem like a "necessary evil" to me and I hope they become less important and somewhat phased out as employers realize they can replace a lot of expensive city office space with telecommuting. I dread the thought I might have to move into one for a job soon until I have enough experience on paper to get steady remote jobs - I've been to a lot of cities for conventions or just passing through and I don't understand what possible appeal they have.
I'm half inclined to believe a lot of the people waxing romantic about cities have never been to one. You get harassed for money all the time and every time I go to a convention I hear stories of people getting assaulted for refusing, they don't look nice unless you're looking on from miles away at a few skylines like NYC's with the new WTC, you have to be a lot more on guard and pay more attention to your surroundings, everything is more expensive, and all the stores/restaurants are overcrowded a lot of the time.
It's a mystery to me why there's such an attitude against suburbs on HN. Sure, suburban town development is technically less resource-efficient than packing everything together like you're designing a circuit board to be mass-produced, but I don't think it's worth the cost.
The best things about cities come from density combined with diversity. Having a lot of diversity means there's lots of niche interests; having a lot of density means those niche interests have enough adherents to come together to create communities; whether they're specialist shops, restaurants, discussion groups, music, theatre, political movements, sexual interests - whatever - the more niche your interest is, the more likely you'll only find like-minded people in a city.
I could say I don't understand why people don't live in cities. The countryside is boring - if you're not interested in the outdoors, there's nothing to do. Suburbs make some sense for people in middle adulthood to raise children in a safer environment without being too far from the city, but otherwise they're just a space / commute tradeoff, getting more space for your money than somewhere closer.
I don't think those things are always exclusive to cities. All of them go on in malls/community centers/etc. either in suburbs or the commercially zoned areas a few minutes away from them, or for some of them, certainly at the colleges. There will also tend to be more compact "mini-cities" (a real term probably exists) nearby with a lot more niche shops and different culture. I'm sure some of the more niche things do only go on in cities but just the internet plus conventions has been enough for me.
There are some more upsides to going a bit further into the country. No nearby neighbors means you can have an expectation of privacy doing whatever you want in the back yard and have no potential for noise complaints if you wanted to do something like an event with music or shoot guns, and on the flip side not hear any noise from neighbors. You'd also have more room to do home improvements if you wanted and have a much easier time getting zoned to build something like a fallout shelter if that kind of thing interests you or dig a pond.
As a parent, I've realized that all the things I used to love about cities are things I have no time or interest for now. Cities seem best suited for teens and young adults, but that's a minority of the population at any given time.
I'm sure there's a notable group of people who want to live in a city all their lives, but I also don't think it's a coincidence that as people start to have kids, they seem to start wanting to move out of cities.
People typically max out their housing budgets on urban apartments for themselves/their partners, but want kids to have their own rooms. To get the additional bedroom(s) for no more money, you have to compromise on something else, like location.
Also, suburban housing has the price of a decent school district built in, while in the city you need to pay private tuition for access to an institution which isn't completely non-functional (i.e. overwhelming majority of students are far below the extremely unambitious academic standards).
If urban schools were high quality and middle class families could afford family-sized apartments, things would be different.
It sounds like a lot of the issues here are very different depending on the country you live in.
Edit: No need to be so cryptic, right? Urban public schools are the top tier in my country. Affordability of housing in city centres is becoming more of an issue, but given the availability of jobs, I don't think it's a major driver of relocation.
In general, the situation here seems to be that a lot of families would prefer to live in a less urban environment, but cities make more economic sense still.
People aren't going to want to stop living near other people any time soon. Not everybody likes living in big urban areas (as you demonstrate), for the same reasons that some people really like social events and others don't. But the people who like dense social networks really like them and don't want to live in the suburbs.
You're extrapolating too far from your own preferences. I don't like watermelon, but I don't generalize from that to a future where something replaces watermelon. I assume people are eating watermelon because they do like it.
Then don't build everywhere. Only build in places that have ground suitable for the foundations taller buildings need. If we're building new cities, we can make some wise decisions on where to do that beforehand.
Not everyone has to live in one of my cities. If you don't like population density, then you can live somewhere else. But the problem we have now is that there are a lot of people who want to live in densely populated places, but can't because the cost of living is too high.
Are you sure people "want to live in densely populated places" and don't just want to live somewhere with jobs in their field, and wouldn't live somewhere else if the jobs were there?
Yes, I'm sure. You're projecting. People with the capacity to live anywhere in the world still pay crazy amounts of money to live in densely populated cities like New York, London, Paris, and Hong Kong. There are many books out there about why, but I think the most compelling reason is the social opportunities they provide.
Humans are generally social beings, they enjoy spending time with other humans. Life out in the suburbs is often (but not always) much more solitary. For most people, being alone in a big house with a lot of stuff doesn't make them happy. Having real experiences with those they're close with makes them happy.
People walk out of their flat, take the lift to the garage (avoiding eye contact), sit alone in their car, spend 30 minutes grumbling at the traffic and other drivers' behaviour, park on the company lot, walk out of the office 10 hours later, sit alone in their car, spend 40 minutes (dammit!) bitching about the traffic and other drivers' behaviour, stop at the supermarket, say hello-thanks-goodbye to the cashier, spend 10 minutes in their car, park into their garage, take the lift to their flat (avoiding eye contact), open and lock the door. Repeat on the next day.
You can replace the garage and the car by the fastest possible walk to the underground station, grumbling at slower people, and 30 minutes in the tube, avoiding any eye contact by looking at their smartphone/newspaper/book and avoiding any other interaction with headphone.
And on Friday afternoon or evening, they get out of the city as fast as possible, until Sunday evening.
That's "social beings enjoying spending time with other humans in cities". You don't even know 2 people in your own building, when you live in a city. You can lay on the side-walk having a cardiac arrest and people will walk by you, if not over you.
People want to live in dense regions because they want to have good restaurants and good public services and things to do on the weekend outside of their homes, other than hunting and fishing.
So this:
> And on Friday afternoon or evening, they get out of the city as fast as possible, until Sunday evening.
This isn't universal. Not even close.
Plus, you can't ignore the political aspect: Someone with progressive politics will be happier in a city than the country, at least in America, and that's been true a very long time.
Absolutely certain. I, for one, turned down the opportunity to move to Northern California (I got a H-1B visa) in large part because it lacked diversity in ways that interested me, even though it would have been the best move for my career. I stayed in London instead.
I'm envisioning these new "microcities" would be about a mile and a half to two miles in diameter. You should be able to walk from one end to another in ~30 minutes. But they'd still be able to hold +100-500K people. The footprint would be small enough that you should be able to fit it anywhere. Even small European countries have a bit of farmland that could squeeze one of these cities in it.
Here in the Netherlands, we have a huge population density. About 50 years ago, we created a shit-ton of land (Flevoland) and plopped down some cities.
Those cities kind of worked out, but there is very little life there. They mostly function as suburbs, where people live but don't work.
More recently, in the north we tried placing new cities, turns out that people don't go and live somewhere if there isn't work, and there isn't much work in the north. Those cities are now failures. Heck, the big established cities in the north are being drained by people moving towards the cities in the middle.
Cities grow organically because people want to live in that city.
> Cities grow organically because people want to live in that city.
That doesn't mean you can't stimulate that growth. You can take the initial steps to make an area a little more desirable and then let the rest happen organically. Nobody will randomly desire to live in an empty rural area.
It's a bootstrapping problem. Sometimes a single employer can make an area desirable, but that single employer may never move there because it's not a desirable area.
That could very well be the case. I don't know if my idea will work out at all. Plenty of planned cities have been built and failed. I've been thinking that you would need a lot of remote workers to be the first settlers or get some sort of large anchor employer (Amazon?).
Building new cities doesn't do much good so long as all the jobs keep becoming more and more concentrated in a handful of existing major cities. There are already existing cities that are more affordable, but so long as the jobs aren't there...
It's always interesting to see which parts of our lives are incompatible with free markets (at least for a majority of society). It's a very peculiar moral that you mustn't evict people from their homes after they've lived in a place for a certain amount of time. It shows that being a renter in a neighbourhood after a while creates some sort of (legally enforceable) kinship that is incompatible with a free market for housing. But I think it's very arbitrary that we don't have a problem saying to outsiders "we won't allow you to live here (even though you'd be willing to pay a lot for it)" however saying to someone "you can't live here anymore (unless you pay more)" is a cardinal sin.
The problem is that housing is not a free market, and there's an uncanny valley effect: free markets are great, socialism is not without its own benefits, but a non-free market has the advantages of neither and the disadvantages of both.
That is, housing is not a free market because it's illegal to build enough of it to meet demand. Employment is not a free market for a variety of reasons, which means employees don't have enough bargaining power to get remote work. And the U.S. has the special problem that Internet access is not a free market either, political corruption has crippled the ability of rural areas to provide it for themselves, which in turn damages the ability of the economy to provide jobs in areas where there is enough housing.
And as long as all that is true, saying housing can be allocated by the market is just saying 'let them eat cake': an abdication by government of its responsibilities to safeguard the most basic rights of the people.
It's also interesting that people genuinely believe this is going to solve the problem rather than exacerbate it.
There is nothing any politician can do to change the laws of supply and demand. If this district in Berlin is in high demand, they're not going to fix the "problem" of high rents by keeping the supply fixed.
The only solution to this "problem" is to let people build additional housing to increase supply.
Instead of keeping the same people in their current units, overtime what will happen is people who currently rent apartments in this district will start to sub-let their apartments to the people who are willing to pay higher prices, acting as a wealth transfer from landlords to current tenants. And yes this will occur even if it's made "illegal" to sublet these apartments (this exact situation exists in NYC with people who have rent controlled apartments and people still do it all the time).
I wonder as a thought experiment, if the city keeps buying more houses to fix the "problem", it might eventually become the dominant landlord, and then in order to raise revenue, it might find that it has to increase rents on its rent-controlled housing...
Rent control is an instance of "chang[ing] the laws of supply and demand". If you need it, you didn't provide a solution. The "build, baby, build" solution would keep supply in line with demand, and prices would be stable on their own. Having rent control even if you don't need it (out of concern for long term tenancy security), you will just create a constituency with a vested interest in you not building any more.
Also, strictly speaking, building is not the only solution. Curbing demand by making the city less attractive would also be a solution.
Ha, you're right that making the city less appealing would also fix the "problem" (lower prices), and I almost included that in my post because strictly speaking it's true...but honestly I didn't want to give politicians any ideas!!
I've occasionally suggested* a dirty bomb as the only way to make London livable again. Just enough radiation to scare away the rich, not enough to actually harm anyone ;)
And in Berlin, I've sometimes seen graffiti along the lines of "cleaner walls == higher rents". So making the city less appealing is already part of the anti-gentrification arsenal.
* for the record, I'm not actually planning to nuke London.
And there you run into the problem: "building more" and "making the city less appealing" are one and the same to a huge proportion of people.
"Why should I pay higher rents or deal with worse traffic/more crowded infrastructure just because you think my neighborhood is suddenly cool or because you're looking to stash a bunch of money in my country?"
Induced demand can cause both to go up, for extra fun times.
You also seem to have missed the "or" presented by my hypothetical low-to-medium-density-city-dweller: either rents and housing prices get higher when you decide to move to my area, or my life changes in ways I don't want as a side effect of your increased supply.
So now let's imagine I own property and can vote, etc. Which of those scenarios do you think this person is going to support? The one that at least gives me a nice valuable house, I'm betting. You still want to move here? Make it worth my while $$$-wise.
I don't think most policy proposals for increasing density have enough obvious upsides for the incumbents to be very realistic.
One of the interesting political tidbits I read was an article about a homeowner who had started voting against zoning laws because gentrification was making it so bad that their kids would have to move far away to be able to afford rent.
You only get the realise the benefits of increased property values if you move away.
A more valuable house also means more property taxes (unless you live in CA).
> You only get the realise the benefits of increased property values if you move away.
Unless the annual appreciation in value of your house is sufficient to quit your job and live on. The risk of course is, will it continue indefinitely.
This is essentially executing the "move away by dying" plan in slow motion, because you end up owning less and less of your house as a percentage, so you probably move deeper and deeper into debt.
Sure, the city also raises rents when necessary. The cities real estate companies are expected to be profitable, just while keeping to other policies than "maximize profit". An option which is at least in Berlin is often offered to investors, but not always taken. (The city offers a guarantee to not interfere with a deal in exchange for concessions on how the buildings are managed, which allows to achieve the policy goals without having to invest itself. Private investors of course then often prefer other, more lucrative investments).
Keeping existing supply cheap is useful for the cities inhabitants, but additional demand has also to be matched to not make this a conflict forever (and Berlin has afaik a lower rate than other German cities in approving new projects).
>"It's also interesting that people genuinely believe this is going to solve the problem rather than exacerbate it."
No, nobody believes that this one action is going to solve a housing problem, where did you get that from in the article? The point is that Berlin took a pro-resident stance here which is both encouraging and unusual in the current "developer takes all" policies that many other desirable cities around the world have adopted. Berlin also enacted legislation restricting AirBnB rentals in the city. They understand there is a housing problem and are at least taking actions to address the concerns of the residents and possibly buy some time.
>"The only solution to this "problem" is to let people build additional housing to increase supply."
What do you suggest, Berlin gets rid of parks and public spaces and allows high high rise condos to occupy that space instead? Part of the quality of life and charm of Berlin is those spaces. Also there is nothing in this article that suggests that the potential buyers were going to increase the housing supply. Housing is a pretty complex issue and your completely reductionist policy suggestion is absurd and naive.
>"And yes this will occur even if it's made "illegal" to sublet these apartments (this exact situation exists in NYC with people who have rent controlled apartments and people still do it all the time)."
This is completely untrue. Firstly there are barely any "rent controlled" apartments left in NYC. They are an endangered species and this idea that people who don't live there are subletting them out at a profit is a complete myth. See the following:
What solution do you believe will to lower housing prices in Berlin that isn't decreasing demand or increasing supply?
Regarding rent controlled apartments, you're correct that only about 1% are rent controlled, I should've been more specific. Given the small percentage of apartments that are rent controlled, it likely has little effect on the overall pricing. When I said rent controlled apartments I really meant rent controlled and rent STABILIZED apartments (apartments that are not currently being charged the market rate). And rent stabilized apartments are approximately 50% of NYC apartments.
[0] https://ny.curbed.com/2017/8/28/16214506/nyc-apartments-hous... -- "That brings us to rent stabilization, a much more common way for New Yorkers to secure under-market rent. While only around one percent of New York rental units are rent controlled, roughly 50 percent of the city’s units are stabilized. Rent stabilization generally applies to apartments in buildings of six or more units constructed before 1974."
Rent controlled and rent stabilized are not at all comparable. And yes, I am well familiar with rent-stabilized apartments. And rent stabilized apartments have annual rental increases just like any other de-regulated apartment does. It just means there's a cap on how much the landlord can increase the rent. There are no deals to be had there. And anyone who is fortunate enough to have a rent stabilized apartment is not stupid enough to risk it by subletting without the landlord's permission.
Landlords are looking for any possible way to get rid of their stabilized tenants as each time the apartment turns over it is that much closer to deregulated. Landlords and property management companies watch their rent-stabilized apartments like hawks. You make it sound as if subletting rent stabilized apartments and pocketing the difference is some epidemic("people do it all the time".) Does it happen occasionally? Sure. Is it the common case? No, at at all, not even close. Not only that but rent stabilized apartments have their own issues as well.
This move of certain municipalities buying housing is not in contradiction to increasing supply; it's just one of many tactics being used to address it. I recall recently reading elsewhere that Berlin govt is also planning for building additional housing and conversion of large unused industrial spaces into housing.
There's a limit to how much you can build out a city before you've permanently disfigured it.
Imagine taking your typical European mid-sized city and starting to allow multiple high rises taller that historical landmarks; or adding purely residential sprawl neighborhoods that distort residents' lifestyle due to long commutes and lack of attractor points outside of downtown.
You've just made a suburban hell out of a human-tailored environment, with the added sin of having destroyed the "experience continuity" which used to be core to community identity. A loss that is permanent and impossible to revert in later generations
I've lived in Rome and Amsterdam, and I know the feeling
Doesn't that mean that european cities simply aren't sustainable? If the city stays 'attractive' more people will want to move there, and the cost of living would rise too much. Really, the only solution seems to be to accept a balance needs to be struck.
Even if you personally believe building large buildings permanently disfigures it, the fact that people are willing to pay for and live in such buildings shows that people still value such "permanently disfigured" cities.
Why should people who own buildings/land, and purchased them under laws allowing them to do as they please with the property now be disallowed from building large buildings on their plots of land and sell/rent them to willing buyers?
Why should the current renters, who don't own the property, receive superior rights to those who own the property and those who would willingly pay more than them?
The "problem" is the movement of middle/upper middle class people into cities. High rents and displacement are one consequence of gentrification, but most people who care about those things are opposed to gentrification itself. The only solution is to keep the middle class in sprawl where it "belongs."
...I think it's very
arbitrary that we don't
have a problem saying
to outsiders "we won't
allow you to live here
(even though you'd be
willing to pay a lot
for it)" however saying
to someone "you can't
live here anymore
(unless you pay more)"
is a cardinal sin.
Pre-existing rights generally count for a lot more than rights that might exist. It has been said that "possession is nine tenths of the law". (Although no one has unencumbered possession of land anymore, in the sense of allodial title.)
Allowing neighbourhoods to be broken up by rich foreigners sets a bad precedent both for current inhabitants and the new ones, who are very likely to find themselves in the same situation well before retirement age (as is happening in San Francisco). City governments are accountable to the people who live there, not the greater good of the One Market, and by serving their interests are merely doing their jobs.
The investment firm in this scenario is, as they often are, a foreign firm engaging in speculation. If there are problems for the people of Berlin, no skin off their backs...
People who move somewhere hopefully don't always stay foreigners, but they can still behave in an opportunistic way, enjoying low prices while not really putting down roots or committing to bear any of the long term costs of the community they join. American tech people in Berlin who live there for multiple years and don't learn German are an example of this phenomenon.
It's precisely the anti-transient policies (squeeze them as hard as possible on rent, make them bear all the costs of subsidized housing) which make people transient.
Of course I'm not going to put down roots in a place that's trying its hardest to get rid of me. If you want people to put down roots, stop going out of your way to prevent it.
Not forming new social bonds is an entirely different thing than breaking existing ones. Yes, it maths out to "these social bonds don't exist", but the latter is far more painful to actual humans.
It's also why there's a significant ethical difference between murder on the one hand, and abortion and birth control on the other.
Being stuck in a socially dysfunctional and economically stagnant part of the country - one where you're unemployed or underemployed - is a little more severe than "not forming new social bonds," though I see your point.
The place I was born made sense for my parents - barely. It didn't make any sense for me. I'd be in a world of hurt if it weren't for the ability to relocate to somewhere with job growth.
And we see the reverse problem too; some London local authorities got in trouble for trying to move their social housing recipients to seaside towns where there were no jobs.
In my opinion, capitalism in its purest form must thrive on misery (as it must exploit essential needs). This is what a truly free market implies.
What I find interesting (though I don't think this is the point you're making), is that there are still people defending this obvious flaw and marketing it as a feature. But once essential needs are met (i.e. housing, food and security), what's even left? Luxuries, I guess. But even that can vary drastically between periods and societies (is gas a luxury? is higher education a luxury?).
Capitalism thrives on misery only as much as it alleviates it. That's what an increase in prices is - a sign that people are desperate for something and willing to handsomely reward whoever will provide it.
It's why I'm in favor of legalizing price gouging - if someone goes to great personal effort, risk, and expense to buy electrical generators and drive them into a disaster area, that's a good thing and should be rewarded. And when the area has enough generators, the price will fall and the gouging will stop.
The thing we do have to watch out for is deliberately creating a need so that the entrepreneur can swoop in and fill it. I suppose this also applies to many forms of advertising, game design, and website design though, too.
As a former Floridian, here's what I know about Hurricane economics:
* People need gas. Gas stations run out. It's illegal for people to pay more for gas companies to ship extra. People struggle to travel before and after the hurricane.
* People evacuate and buy hotel rooms. Hotels are required charge normal prices. People have little incentive to make efficient use of rooms, and they run out. People struggle to evacuate.
* After 2004 hurricanes, home insurance companies try to increase prices. State passes law limiting premium increases. Insurance companies drop coverage for unprofitable high-risk properties. State creates a government-run pool for people insurance companies can't insure. Thus, taxpayers get to subsidize property insurance for rich people on the coast.
STOP MESSING WITH THIS! If you really insist on throwing supply out of whack, can you at least not do it during a natural disaster??? Things are crappy enough as it is. Thanks.
You're ignoring inelastic demand, which would happen in the case of a disaster area.
If a company is one of or the only company that can bring something important/necessary like generators to a disaster site, and the company knows this, it will charge more than is fair, e.g. more than the cost of the generator plus the expenses of transporting them. Price gouging generally hurts the people that need the product the most because they have no choice, and many people consider it unethical in cases like disasters. This situation is similar to the economics of life saving medicine, because its demand is also inelastic.
Also I don't think it's fair to use the term "someone", because it's often a company that does something like this. Don't humanize companies.
Elasticity of demand doesn't matter, more just elasticity of supply.
What elasticity of demand does in an emergency is help ration goods. If you're considering buying ice, and ice becomes temporarily much more expensive, you'll cut out elastic demand (eg, having cold drinks), which leaves more ice available for inelastic demand (eg, keeping insulin from spoiling).
>Also I don't think it's fair to use the term "someone", because it's often a company that does something like this. Don't humanize companies.
I had a specific example in mind: John Shepperson, who, in the aftermath of Hurricane Katrina, bought 19 generators, rented a U-haul, and drove from Kentucky to Mississippi. He got arrested and the generators were confiscated. This is not the sort of incentive that we want to provide.
If it's possible for higher prices to induce supply, you want to let high prices induce supply and let the magic of price information do its work. The modern capitalist system is high magic, and prices are an important piece of how the magic works. Remember when fidget spinners got suddenly popular? March of this year they weren't a thing, and in April they were in pretty much everywhere. Messing with prices is how you break the magic. Do Not Mess With Prices.
I find your idea of "ethical" and "fair", highly unethical and unfair.
Such social engineering has a long and bloody history of turning around and disproportionately hurting the poor and the weak, in unexpected (sic!) ways. That is the socialist tragedy -- think with your heart, but only one step ahead.
"… the government should not support the people. The friendliness and charity of our countrymen can always be relied upon to relieve their fellow-citizens in misfortune. This has been repeatedly and quite lately demonstrated. Federal aid in such cases encourages the expectation of paternal care on the part of the government and weakens the sturdiness of our national character, while it prevents the indulgence among our people of that kindly sentiment and conduct which strengthens the bonds of a common brotherhood."
Oh please. Is there great personal risk involved in raising ticket prices to 6000 dollars on flights that would fly anyway? Is there great personal risk in raising the price of life or death medicine to 750 dollars per pill?
Well the fact that demand and prices were higher during the evacuation of Florida meant that airlines were incentivised to have more flights out. It seems like this directly resulted in the huge volume of flights headed to and from Florida, which meant more people were able to evacuate by plane. And those people weren't clogging up the highway so people who couldn't afford tickets also ended up better off.
How was the "price gouging" in this case not an unequivocal good on the macro level? It seems the alternative is that the airlines held prices fixed but ran out of supply immediately.
The thing is that other forms have been tried. It turns out that unless a form of society does not have enough capitalist underpinnings, it indeed thrives in misery of most people: North Korea, Soviet bloc, religious tyrannies, aristocracy with indentured servitude, etc.
But you can have capitalism without free trade, or even many rights at all. Liberal freedoms and rights tend to favor capitalism as an economic system, but not the other way around.
You can have a system that is somewhere between "capitalism in its purest form" and "communism". When both extremes thrive on misery, why not try some kind of middle ground?
One way to look at this is that displacement causes a loss of value, i.e. culture, kinship, etc, to the extent that capitalism is an attempt to maximise value this isn't crazy.
But I think housing is definitely a thing capitalism struggles with because it is a good everyone needs and there is a finite amount of it, so much of it is zero-sum allocation.
Obviously I think we need to invest more in the non-zero-sum parts of it, but it's also a difficult political problem with lots of common goods and externalities.
Externalizing costs is one of the larger problems with capitalism. If I can pollute the environment with out that cost being captured, then I can essentially extract value from others indirectly. If moving people from their homes causes psychological damage or civil unrest, then I can externalize those costs as well.
Regulation is supposed to prevent or limit those externalizing costs. However it's nearly impossible to put value on something like that.
> Regulation is supposed to prevent or limit those externalizing costs. However it's nearly impossible to put value on something like that.
Could you elaborate? I mean, the common law is littered with examples (stare decisis) throughout the industrial revolution which establishes strict liability for, say, someone else's right to enjoy their own land or property. In the UK, this extends to a tenants right to peacefully enjoy his home, even when he doesn't own it.
Besides external costs, concentration of power due to 'economies of scale' are also somewhat of a downside of capitalism. It is rather non-conducive to a free market and capitalism without free markets really sucks.
> But I think housing is definitely a thing capitalism struggles with because it is a good everyone needs and there is a finite amount of it
I think municipalities that can support high density development are in short supply. High rises are just concrete and rebar. But if there's no transportation, not enough energy, security, etc - then no development will take place. We've left those roles to local government, and I think we should challenge that decision.
The supply of land rebar and concrete isn't that scarce (thanks capitalism). What's scarce is the organization and infrastructure that can sustain a town - and the limited land around it. If there's something that needs more capitalism it's city planning.
Community has value and since people are displaced to different locations, the community does not just re-appear somewhere else, hence value destroyed.
It's also very easy to find negative effects of displacement. The one that springs to mind easiest is that old people who get displaced die many years earlier. These negative externalities fall on people who simply don't have the money to pay enough to cover these downsides.
For a totally trivial example with real dollars: moving costs are non-zero, so when people move against their will we trivially destroy value there.
I disagree with the sibling comment which claims that the existing community/neighborhood have done is what drives gentrification - a LOT of gentrification is driven by a balancing act between price, public transportation and safety. So, I would argue that for the gentrifiers, one neighborhood is often as good as any other, but for the people who have lived there a long time, that specific neighborhood is what is important. So in this sense, it is value destroying to push these people out on a 1:1 basis.
Often gentrifiers aren't even moving to their first choice neighborhood and are merely priced out of the places they actually want to live.
Maybe not value on a material level, but there is definitely value lost in the relationships and sense of community that would disappear from forcibly relocating a large group of people like this. Maybe if they moved everyone to a new area together, but I'd guess they would just be distributed across the district.
In some cases is precisely the value that make the prices go up in the first place.
For instance, people want to live in city x because this city have nice features (good public transport, good public spaces, buildings size that leave to see the sky..). Those features are in some cases due to location but, in other cases, are due to what the people that have been living there for generations have done with the city.
Now outsiders come and out-price the people that "created" the city and, in the process, destroy the value of the place. So, people start to move to another nice city. Rinse and repeat.
This, it seems to me, is not a "fault of the market", but the effect of an optimization process run amok. And I have not even mentioned speculation.
The supply of housing is severely limited by non-capitalist forces. It's hard to take it as an example of anything in isolation. If there was enough housing for all the people who wanted to live in Berlin, then it wouldn't be possible to buy a building and raise the rent.
It is definitely true that cities require many income levels to be sustainable -- preventing monoculture is not just a kind of cultural bias but it is sound economic strategy to keep your city vital and desirable over the long term. There is so much accrued capital into wealthy hands across the world with need to find profitable parking -- allowing your city to become a real estate bubble in service to investment funds is trading short term gains for long term losses.
Yes, it is a little odd. If a polity thinks that long term residence should covey property rights maybe it should pass laws that encourage or require rent-to-own schemes instead of layering confusing quasi-property rights on top of the rental/ownership dichotomy.
I always thought of permanence as the differentiating factor between renting and owning. I actually feel less interested in owning, now that I know these "guaranteed right to rent at the same price for life" deals are out there.
This isn't just about the welfare of current renters. The city (and the people in these quarters) are also concerned about the changes a neighbourhood experiences when the population changes.
What often happens is that these cheap but beautiful areas attract students/artists/etc, who create (or support) lots of businesses and events that make the area attractive. When the lawyers/doctors/etc replace them, they destroy exactly what it was that attracted them to it in the first place.
(I live about 300m from the building discussed in the article)
So from an economic point of view (that is lacking in Berlin in general), which value do the artists and students create and which value is created by doctors?
Fine if the leftist gov wants to sustain their neverland but not if the other part of society (dreaded doctors, lawyers, engineers) has to pay for that.
I was assuming that the same people would still live in the city, only in different areas. So it's all economically neutral if that's how you want to look at it.
This is also not about completely excluding any group from anywhere. There are plenty of doctors and lawyers living in Kreuzberg. It's about preserving a mixture of background/ages/incomes, which has shown to work rather well.
It's also hard to deny the economic impact of this scene on the city, it both includes and attracts startups, for example. Or look at Heumark development: a triple-digit million euros investment that grew out of a nightclub (bar25).
I get that it sucks when this happens to where you live, but is this an actual issue? Why should a neighborhood, once it is made better, be set in stone?
It feels a bit like a nice populist point (ragging on the rich folks displacing the downtrodden trying to pull on their bootstraps). That alone makes suspicious.
You could do worse than to start with those items listed in the Universal Rights of Man and assume that anything associated with those should never be in any way be something that you'd have to pay for. After all, if they are universal rights then you can't put a $ figure on them.
And then you read that list and you realize that those are exactly the things that are being milked for all they are worth, and often more.
This is why markets spring up in societies that developed past mere survival of subsistence farming or hunting. The society of Germany is way past that phase, just in case.
Look at the food market. The food market is extremely close to a competitive, fully capitalistic free market.
Do food sellers monopolize the market and charge extremely high prices because food is necessary for survival? No, they don't. Because the free market would force them out of business.
The current free market for food has a variety of different products, from a variety of sellers, all for a very reasonable cost.
This is especially true when you compare it to NON free market industries like housing, where much of the problems are caused by the government limiting supply.
Agriculture and farming is one of the most subsidised industries in western world. Governments need to subsidise local agriculture as it cannot compete with third world countries and it is a matter of national security to be able to feed your population in case of a conflict, for example. This is a very poor example of capitalism and free market as it's super regulated.
This just shows you have no idea about the food market.
Farming is heavily subsidized in first world countries because local farmers would be outcompeted by cheap imports in a free market. Governments subsidize their farms so that they can compete with the imports because it is extremely important for a country to be able to feed its own population if outside supply suddenly disappears.
This is actually an example of why totally free markets would be disastrous. Imagine for a moment that we let many of the local farms die to the outside competetion and a natural disaster severely reduces supply. You can't just spin up millions of acres of crops and have them ready before people begin to starve. Governments must subsidize as a form of insurance spending. You have to keep the machine running artifically for when you need it. The free market would kill this "inefficiency" for short term gain with potentially disastrous results.
I'm not a landlord, but I recently bought my own home. If I moved on and decided to rent my property out, I may be making a small profit. However, if the housing market changes and the rent no longer covers the cost of the mortgage, I wouldn't say it's a cardinal sin to put the rent up. Most landlords are not professionals with large portfolios. Most cannot afford to keep the property if the costs are not covered. Having rented for many years previously, I'd prefer a rent increase to being evicted because the property had to be sold.
What a small world. Until tonight I had never been to Kreuzberg, let alone Berlin. My friend recommended this as one of the more hipster neighborhoods. After realizing that this building is only a 25 minute walk away, I decided to go around and take a few photos of it and the surrounding neighborhood:
This area has a fun vibe and it's easy to see why it's rising in popularity.. my Airbnb host grew up here and told me that it used to be very poor. This particular building is well painted, but doesn't really stand out.
As someone who grew up in Palo Alto, gentrification just feels so.. normal. Although it's priced out most of my friends and family, I've always seen it as something inevitable.
This is such a strange precedent to set.. how many of these dwellings is the city prepared to buy? How can they possibly stop the free market?
I am curious how this decision will impact the neighborhood and city in the long-term. Unless the city spends more to educate existing residents or finds a way to bring in a more qualified workforce, higher-paying jobs won't come to the city and tax revenue will stay flat. I'm afraid this will hurt the city more in the long-run than any gentrification would.
This is probably also infuriating to other parts of Germany, which pay substantial subsidies to Berlin and a few other poorer states.
>This is probably also infuriating to other parts of Germany, which pay substantial subsidies to Berlin and a few other poorer states.
It can be annoying but that's what being a unified country is about. Can't say those of us here in California or in NY are too happy about our massive subsidies that go to the red states that accuse us of being full of "welfare queens" but that's the cost of being a country.
As long as they're paying more than the investors offered, it seems fine. Article makes it unclear how the price they paid compares to what the sell price would have been.
If I understand it correctly, the district takes over at the price the investor signed a contract for. So no, they can't outbid the district afterwards, they only can put a higher bid initially, which they'll have to pay if the district doesn't make use of their interception right.
Well it may seem fine, however considering that taxes are funding the city's purchases, then it is a bit unfair to the other bidders who are therefore at a disadvantage.
I wonder what the zoning laws are like in Berlin. Specifically, I wonder if zoning laws prohibit small homes that allow for pretty good high-density housing.
Such zoning laws could contribute to the high rents in the center of town.
In any case, this method is much better than rent-control. There is still then monetary incentive to skip on maintenance, but the institution should insulate from that. The biggest potential downside I see is a slowing of development in general. That might obstruct development of cheap rents more than it saves.
In general I wonder what prevents building higher, cause you can build high and cheap and if there is demand, why not?
Berlin is pretty dense, even without skyscrapers. Tightly-packed six-storey buildings can get you very high density (look at Paris for a more extreme demonstration). The area of Kreuzberg I'm in now has the same population density as Manhattan (28,000 people per square kilometre), despite not having anything more than 7 storeys high.
Housing everywhere in Berlin -- especially new-build -- is very dense. Importantly that's true throughout the city, not just in the centre.
Keeping Berlin so dense is an impressive achievement, given that it's surrounded by flat, empty countryside. Partly it's because of the cold war division of the city. But mainly it's cultural -- most Berliners are happy with apartments rather than individual houses.
Politicians religiously promise to maintain the 'berliner mix', where zoning encourages housing and commercial use in the same area, and keeping a social mix by having affordable housing everywhere. A new higher-density mixed-use zone category ('urban area') has just been introduced nationally, largely at Berlin's request.
Generally, Berlin has mixed zoning with retail on the street level, apartments above, and offices and small manufacturing in the back. You can't build higher than what you see in the photo (the old limit for fire ladders), unless it's in an area with other higher buildings already.
Rents are rising as a return to normal. Most people pay around $1.2/ft^2 (sorry, I have no idea what unit the US uses for rent)
For small homes I'd say < 40m^2 spaces, getting as small as 25m^2. Those allow young single people to live where they want at prices they can afford. A related factor is required parking space. Such space, when there is no demand, makes high-density housing take up much more land.
1) The type of land in which you are building. Some can't support high-rises or can only do that at great expense (which defeats the purpose of building high).
2) Infrastructure. It's easy to cram a lot of people into one building but it becomes harder to alleviate traffic or ensure access to things like shops and health care.
I've thought in the past about the possibility of a network of enterprises that would seek to eliminate or at least minimise profits and to exclude profit making companies from participation in the network. For example, the Goldman Sachss of this world would find the doors firmly shut via some kind of legal structuring. The eventual goal would be to drive profit out of the system completely, which surely would convert all profit into pure inefficiency, and thus slowly destroy the profit making enterprise as a viable model. Intrigued therefore to see this and also a report on TV about how Hamburg voted (narrowly) to take back control of their electricity network, and how this has the big power companies seriously concerned, no doubt because their parasitic extraction of profit is threatened.
As may be obvious I am not an economist, so anticipate and welcome the flaws in my idea being pointed out!
Forcing out profit means there is less money for reinvesting. This would mean your network would fall behind in the quality it provides, until the profit enterprises are a better deal, even after their profit is extracted.
You could go against that by having the intention of turning a profit but committing to reinvesting, but that is still extracting that profit. Moreover, it encourages the same exploitative behavior.
In general, profit isn't bad. Trades are only made when both parties are better of afterwards, so in principle, more trade means everyone is better off. The devil lies in the balance between how much better off both parties are.
OK, so then include a percentage of price for reinvestment and eliminate all other profit? Or put all of this profit into a socialised pool? Also for-profit competitors would be effectively shut out of the network by agreement. The vision would be vertical integration with minimal profit at each step, thus opportunities for concentration of wealth are minimised. Interestingly this seems to be happening to a degree with Amazon, where profits are arbitraged out of the system (though to varying degrees between participants).
This move of certain municipalities buying housing appears to be one of many tactics being used to address housing shortage. I recall recently reading elsewhere that Berlin govt is also planning for building additional housing and conversion of large unused industrial spaces into housing. I wouldn't be surprised if improvement of certain areas is also part of the renovation/conversion tactics used in their housing strategy.
I am quite not sure how it would be expensive for existing residents even after sale to so called foreign investor. As far as I understand, in Germany, rents are fixed for existing residents and landlord can not evict them (few exception exists, probably won't work for investors).
Rent can be adjusted up to match prices in the area (with a limit of 15% increase per 3 years), and modernizations are a valid reason to increase prices above that. Which is the typical gentrification scenario Berlin is worried about: old buildings are bought, improved to a more luxurious standard and then rented at accordingly higher prices.
Berlin is lead by a left-far left-green coalition and gets billions of € every year from the Länderfinanzausgleich. Basically, other germans pay for their citys reckless spending on questionable projects. High rents need more living space, not payed-by-other one
It's been said the majority, or a large part, of the electorate of Berlin consists of people receiving welfare or other community/state benefits in some form or another, including the large number of state employees living in Berlin. It's a very unhealthy situation going forward, since the government of Berlin must appease that part of the electorate, rather than attracting eg. investors or people who can sustain themselves.
That the state or municipality is an actor on the housing market really is a perversion and outright declaration of defeat on behalf of politicians. With the negative interest rate set by the European Central Bank and thus lack of investment opportunities, and given the growth of population in the metropolitan areas of Germany, you'd think this market should be able to see after itself, like it is in other areas of Germany.
Even more so since housing has traditionally been an investment for people seeking to build up a rent for when they're old, a problem that will come big time to Germany in the years to come, the demographics being what they are.
But social-democratic politicians in Berlin are generally incompetent or corrupt in the extreme; at the expense of other German's money, they rather want to be perceived as acting in the interest of their electorate.
"It's been said the majority, or a large part, of the electorate of Berlin consists of people receiving welfare or other community/state benefits in some form or another, including the large number of state employees living in Berlin. It's a very unhealthy situation going forward ..."
I am reminded of this quote, which is often misattributed to Alexander Fraser Tytler[1]:
"A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing ..."
They are - in a sense - by taking 40 paid days off/year on average for being 'sick'. [1] That's two month out of every year in addition to ~10 holidays and 30 days vacation.
These are not employees (Beamte are not employed) and they're not federal government. So the article kind of does not apply twice. These statistics also counts weekends and holidays as sick leave, so - as the article mentions - the data cannot be compared with the usual averages which do only count work days. On top, the groups with the highest sick leave are people in high risk jobs - policemen and firefighters. These are definitely not rent-seekers from the government.
My post wasn't an insult on state employees of any kind, or some such. The point was that the electorate consists to a very large extent of receivers of tax payer's money, and that the Berlin Senate buys their electorate with money they receive via cross-financing from other German countries ("Länderfinanzausgleich"), which I do not approve of.
This is not a case of the senate buying anything. The district of Kreuzberg uses it's right to preempt the sale and direct it to a public housing association. The voters in that building a most certainly not government employees, but low-income residents. You're mixing up things in a disingenuous way.
In other words, they're pulling a publicity stunt here, with the elections conveniently coming up in two weeks. Interfering with the market is uncalled for here, even though it might make good appearance in local media, and resonates with the intellectually challenged.
The government's job sure is to provide economic conditions such that a market for housing and other basic needs can sustain itself. But what they are rather doing is publicly blaming investors as "evil insects" ("Heuschrecken") in the worst socialist or even Nazi tradition, and making construction expensive by laws such as EnEV (law putting absurd energy efficiency burdens on new buildings) and asymmetric, unreasonable rights in favor of tenants.
Really, if there's a housing crisis, it's entirely the fault of the government, by definition.
My proposal for new cities involves strictly limiting the foot print to enable it to be completely walkable. That would mean you don't have any cars, which is good for many reasons. A lot of what local governments do is complicated by having to service so many different residences over a wide area (think sewage and water, mail, policing/fire protection, road maintenance, etc). If you mostly just build up, then that all becomes much easier, which means government can be much smaller and cheaper. And I think the city becomes much more livable, as a large area around the city is green space, and the streets can be taken over by open air restaurants/cafes/bars on weekends.