But in the article it says towards the end that Berlin in building 50K new units in the next 10-15 years. So in addition to banning AirBnB they are also increasing supply. I am unsure how or why "technology" plays into it unless you mean construction technology?
How many units were torn down to build those new units, and how desirable are they compared to the old units? What is the price range? How does the quality compare? Where are they located? One number doesn't capture the whole story.
Seattle has a similar problem where we do have a large number of new units going up, but some places are still seeing upwards 50% vacancy after 3 years... because the new units aren't aligned with market demand. I'm talking luxury apartments downtown when the growing demographic is frugal-minded mid-20s/30s interested in neighborhoods 10-20 minute away from downtown. Even constructions in the right neighborhood end up being a net loss of desirable units when the rent is sky high.
This is why loosening building restrictive is not a solution - builders always want to charge a premium over the existing market price, which means building expensive luxury flats and leaving new homes empty if necessary rather than reducing their prices.
Agreed. That happened in Spain: after the crisis burst the housing bubble, banks and private owner were simply not putting their property in the market to avoid price falling down. I Andalucia, the goverment actually had to pass a law that midly forced people to rent empty flats, because we were at the ridiculous situation where a lot of people were being evicted for not being able to afford rent, yet there were lots of unused space.
So, yeah, more development might help Berlin, but it will be more effective when accompanied by rent camps and strengthening of social housing banks. Otherwise you are just feeding the bubble and exchanging one population by a wealthier one.
Apparently London is suffering from similar issue. A lot of new appartments are luxurious and sold to foreign investors. In the end they are just sitting there unoccupied.
5000 homes a year doesn't sound like much. Houston, one of the most affordable metro areas in the United States, built enough housing for 160000 new residents last year. That's probably at least 50000 homes.
