In the short term, I'm in agreement without caveat, but in the long term letting the prices rise supports industrial growth. The wealthy buying all the bread they want funds the expansion of the farming industry, allows them to invest in more intensive farming practices, and even better encourages price discrimination, whereby the wealthy actually get the same amount of bread as everyone else but pay extra for the "artisan" varieties. Getting the rich to pay more for essentially the same thing is itself an equalizer.
It's not hard to draw the comparison with housing. Let the rich buy the "luxury" apartments on the top floor (just an example), helping fund the building of large buildings which don't get built without cost-benefit and risk analyses squarely in the black.
The issue is, there's only a limited supply (Berlin can't grow forever), and as result there's already many apartments left empty today to artificially increase the prices of apartments, as they're treated as investments in a bubble, with the intention to profit from increasing value, not from rent.
Not regulating the price was tried for 30 years, and led to many families unable to afford housing, or spending 80%+ of post-tax income on housing.
Berlin is a small city on the global scale. It doesn't need to grow forever, it needs to grow to meet its local demand, which is apparently larger than the existing housing stock.
It's not like this is a hard border. It's completely feasible to live outside its limits. Sure, that's not technically Berlin but for all purposes regarding the housing market it is.
Not quite. If I understand right (as a recent-ish migrant to Germany, I expect to have half an understanding at best), different states have laws and slightly different taxes. Not as much so as American states, but perhaps more like Newark vs. NYC than Cupertino vs. Sunnyvale.
The difference in taxes is zero or negligible for almost all persons (income tax, VAT, etc. is exactly the same – dog tax probably is the highest difference). Corporations pay less taxes outside city limits.
The most relevant law I can think of is that if you live outside the city limits you might not be able to send your kids to a school in Berlin.
Okay, but suppose I got a job in Berlin - why would I have to live in Berlin proper as opposed to some place out side of Berlin? What is stopping me from getting a place just outside of the Berlin limits?
When talking about city growth, population dynamics and long timescales, do you really believe those administrative boundaries matter in any practical sense?
Paris is one of the densest city in the world (overall, there are denser areas) despite having a cap at 6 floors on building height. (I might be off by a floor or so) At that height the cheapest building technologies* still apply and up is not that expensive.
Now going up to 200 floors is very expensive. However on a per unit area it is only a few times what the cheapest building style* is. So it does require more expensive rent, but not that much more expensive, and as rent gets expensive you expect apartment sizes to fall to balance some of it out.
* cheapest that can meet reasonable building codes. I'm ignoring the uninsulated, fire-prone shacks you see in poor countries which are cheaper by far.
On that basis, I’d be interested to see more grand buildings like those on Frankfurter Tor. While the insides of Soviet era buildings are the targets of German jokes [0], the outsides are grand, and they are more than 6 levels high.
[0] IIRC “if you come home to find your wife has changed her hair and redecorated, you went into the wrong apartment”, according to the DDR museum. I’m sure it lost something in the translation.
That's interesting that Soviet era buildings there have a reputation for being grand outside. In Prague, buildings built in the Czechoslovak Socialist Republic era have a (well-deserved, IMO) reputation for being brutish, simply, and inelegantly built on the outside, especially as compared to the beautiful buildings from the earlier eras.
I mean those specific buildings on Frankfurter Tor look good, not Soviet[0] in general. I think it was where they were showing off, just like the TV tower in Alexanderplatz.
[0] DDR? I’m not actually sure who made the decision, now I think about it
It's not hard to draw the comparison with housing. Let the rich buy the "luxury" apartments on the top floor (just an example), helping fund the building of large buildings which don't get built without cost-benefit and risk analyses squarely in the black.