cross-posted from: https://lemmy.world/post/3560407

Considering how crazy expensive accommodations have become the last couple of years, concentrated in the hands of greedy corporations, landlords and how little politicians seem to care about this problem, do you think we will ever experience a real estate market crash that would bring those exorbitant prices back to Earth?

  • severien@lemmy.worldEnglish
    4·
    1 year ago

    The only way I see around this is a really aggressive cap on rent. Like, once a rent is established, it can never be raised, for any reason, ever again

    We have something like that in my city. The rents grow, but are bound to the inflation. The dynamic is similar - the old contracts are vastly cheaper than the new contracts. That has several downsides:

    • young families can’t afford good apartments, since they will need to tap the new-contract market which is expensive
    • old people have nice large apartments for very little money. Sounds good at first, but then you often have situations where a single 80-year-old has a 100 m^2 apartment in the downtown, while a young 4 member family is in a 60 m^2 while paying more money. Even more perversely, the 80-year-old can’t move out, because they wouldn’t be able to afford a smaller sized apartment with a new contract.
    • old contracts become a form of property in itself and are sold on “black market”, inherited etc.
    • old contracts are not let go even if the apartment is not needed at the moment. So apartments are often empty, waiting for the kids to grow up, or used only occasionally (the family has a house outside the city and only occasionally spends time in the city).
    • you’re heavily disincentivized to move (to be closer to your work, family, get a bigger apartment for growing family etc.) because your old contract would get cancelled, and you will need to get a much more expensive new one
    • Valdair@kbin.social
      2·
      1 year ago

      The problem is allowing there to be old vs. new contracts, not the control itself. There wouldn’t be a black market for contracts if the price of rent for a unit was permanent, public information, and tied to the property. Even if it’s sold, renovated, whatever - if the rent can literally never go up, sooner or later it’s going to make financial sense to sell it. It might not be today, it might not be next week, but someday, the goal is to force as much of the property ownership in to the hands of people who want to be property owners and live in the properties.

      It would have no effect on people who own and live in their home (except on the value of the property, if it causes a mass flood of properties on the market… which I doubt. The properties are still valuable just by virtue of being a place to live, they don’t need the rent generating component to be valuable).