[epicureanideal]

BMR is a scam in my opinion. It just prevents wages rising as they would naturally need to if housing became increasingly unaffordable to the point that workers can't even commute in. It recruits people into a program of lucky allocation rather than working for more. Busy or I'd write more.

Look how rent control turned out.

[vadym909]

I agree BMR is a scam, but not because of its effect on wages. It is too small of a factor, but because it is not market-based and leads to quotas, lotteries, middlemen, bribes- all bad.

To offset crazy high demand and prices, the only option is to increase supply (build taller, denser apartments/condos) or limit demand (disallow foreign buyers who speculate or invest, increase property taxes for owners that rent out their houses)

[ido]

Rent control works great when it cover the entire rental stock.

See e.g. Berlin vs LA: https://goo.gl/aNHzGQ

In Berlin all rents are controlled by default[1]. And despite similar purchase prices, rental prices are half of LA's.

[1] only newly built units or those renovated for more than 1/3 the value of the unit are allowed to be rented without price restrictions. This keeps the vast majority under rent control.

[Zahlmeister]

Affordable housing is actually quite scarce inside the city right now, people on average don't really earn that much. The rent controls had no actual effect on price increases. It has been suggested that the rules are simply being ignored and most tenants won't pick a legal fight with their landlords when housing is so scarce:

https://www.welt.de/finanzen/immobilien/article150877146/Die...

There's more than enough housing for higher-income people, so rent control there is moot.

[ido]

Rent control in berlin goes beyond the mietpreisbrmese - most significant is that you can't increase the rent once you get a tenant beyond the rate of inflation and that you (almost) can't kick out a tenant.

I have friends in London whose rent (in the same apartment) went up 10% every year for years until they had to leave the apartment. This is not happening in Berlin.

[Zahlmeister]

You can increase the rent up to 15% (Berlin) within three years, well above the rate of inflation. This forces some people to move out, as well.

Rents in Berlin are a joke compared to London. You can actually get cheap and plentyful housing just outside the city, but then you'll need a car as well.

[ido]

I didn't know that, every place I lived in here had much slower rent increases (despite the market around the apartment raising more than that - in fact in my current place I'm still paying then same rent 3 years into living here).

Either way 15% in 3 years is still rent control.

[Zahlmeister]

Like I said, there's a demand for affordable housing and in Berlin that means very affordable. Lots of students, lots of artistans, and also lots of unemployed people.

> Either way 15% in 3 years is still rent control.

...which affects very few people.

There are some places that suddenly became "hip", where rent increases drove out lots of low-income people, which caused political backlash. These people really just had to move to less popular places.

[et-al]

There's too many variables to say that rent control for the entire housing stock is what keeps Berlin's rents down.

For starters, Berlin is known to be one of the cheaper German cities until recently ("poor but sexy"). In addition, the climate, geographies, and economies between LA and Berlin are significantly different.

[ido]

Compare berlin to any big American city and you would see that the rent-to-purchase-prices ratio is always much lower in berlin.

[user5994461]

>>> Rental prices are half of LA's.

Because income is one half of LA.

[ido]

And yet purchase prices are the same. Rents are controlled and purchase prices are not.

[vedanta]

I don't think it's a scam. I would agree on rent control, but I think that has it's uses too in the current rental market.

[Zahlmeister]

Wages don't naturally rise just because rent is higher, if anything the converse is true.

You'd end up paying 25$ for a coffee just so that the barista can afford their overpriced housing.

If you're just raising the cost of living, but not the standard, you're not gaining anything for anyone.

[TuringNYC]

>> Wages don't naturally rise just because rent is higher, if anything the converse is true.

I'll offer a lay-person first-person view in contradiction to this theory: rents set a solid bottom salary level acceptable to people. A typical Bay Area rent can consume 100% of your salary once you have a family involved.

As countless HN threads discuss, i'll pre-answer the typical nay-sayers. Yes, i realize I can raise my entire family of four in a studio apartment. I choose not to. Most people I know choose not to. Yes, i realize I can raise my entire family on ramen noodles, i choose not to. Yes, perhaps i'm picky. Yes, I realize I can drive 5hrs a day and live in a nice house -- I choose not to (mostly because my workday is already 10+hrs.). Yes, I can have roommates live with my family (seriously, someone suggested this on another HN thread. This is down-right creepy. I dont want a roommate living in the same house as my 1yo daughter.)

Call me prissy, but I just figured that Ivy League educations, CS degrees from top-5 institutions, 15yrs of experience and two decades of hard work would afford me more than a studio apartment.

Where does this all put me? It means I have a hard-hard bottom on what salary is acceptable in the Bay Area. Practically speaking, it has meant that I stay in NYC where live is more affordable (yes, i've done the math 10x and can demonstrate it.). I have a great live in NYC on a good tech salary. I'd give up half my quality of live to live in SF, which means that I need a much, much higher salary in SF to make it worth moving there.

[Zahlmeister]

What are you contradicting? You are supporting my point. You are sitting in NYC because you're not getting enough money in SF. High rents didn't make wages rise enough to make SF attractive even for you, a hot shot software developer. Now think about all the ordinary people that hail from SF...

[closeparen]

Someone usually replies to statements about not being able to raise a family on a professional income in SF by suggesting these sacrifices and acccusing the poster of being entitled and having unrealistically high lifestyle expectations. ("Of course you can't live a suburban lifestyle here. Change your lifestyle"). Looks like parent was responding preemptively.

[TuringNYC]

I see what you are getting at and I see your point, thank you. I had an orthogonal point that high rents put an absolute minimum on required salaries. You are absolutely right that sometimes that absolute minimum required salary is realized by the job simply not being taken!

[readams]

Be definition there's always a shortage of BMR housing (otherwise it wouldn't be below market rate). BMR doesn't remotely solve the problem.