>"Berlin has a massive undersupply of housing — a widespread phenomenon in western cities.<p>Usually, this means that prices tend to increase. That’s what used to happen in Berlin too. Then, a couple of years ago, the city municipality passed a controversial rent control policy that prevents price increase for at least 5 years.<p>It was a very bad idea: the market completely froze and became illiquid.<p>Housing supply contracted (instead of expanding), due to lack of financial incentives."<p>PDS: <i>I've seen this exact same effect before, in other housing markets...</i><p>Also, a psychological observation:<p>Once people who have had a housing problem in the past find an adequate housing situation for themselves, they, not seeing housing as a problem anymore, are no longer inclined to vote for the politicians and/or public housing policies that would help large amounts of <i>other</i> people with their housing problems...<p>Housing, that is, getting the issues around housing exactly correct from a law/government/macroeconomic/public policy perspective -- with a rapidly expanding world population and many homeless people in the world's cities -- is, or will be, I think, as future historians look back in time:<p><i>One of the defining issues of Earth's 21st Century History...</i>