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Tag: rent

Expropriate Everything

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by J.Blumenfeld, Brooklyn Rail, Summer 2019

It’s an unusually warm Saturday in Berlin—if it even makes sense to refer to the weather as “unusual” anymore. I wake up early, read a bit, write some emails, change some diapers, and then head out to meet some friends at the café before the big demo. The Mietwahnsinn or “rent insanity” protest is an annual gathering of tens of thousands of people at Alexanderplatz who come together to loudly and colorfully decry the seemingly unstoppable rise of rents in the German capital. Like most big protests here, it feels like a party. Strolling down Karl-Marx-Allee, a massive boulevard built in Stalinist style for East Berlin, 40,000 human beings throb to the bass—young, old, parents, roommates, co-workers, students, tenants, and activists all drifting together in common disarray, like a roving concert, shouting about rent-sharks, high costs of living, and, most of all, expropriation. The word is on everyone’s lips, not least the city senate, the big property owners and real estate companies, the struggling tenants and just about anyone else who’s read the paper, watched the news, or walked the streets where posters, banners and graffiti calling for the expropriation of Deutsche Wohnen & Co are ubiquitous. In most cities, such radical slogans would be ignored or dismissed as the infantile fantasies of an ultra-left fringe. But not here. The demand to expropriate the largest profit-oriented property owners in Berlin—in other words, to socialize over 200,000 private apartments—is a serious proposal, one that may, in fact, take place. How did this happen?

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Why Your Rent Is So High and Your Pay Is So Low

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IN THE 1950s, the average New York City apartment rented for $60 a month — around $530 in today’s money. With the US median wage at $5,000 a year, New Yorkers spent 1/10 of their salaries on rent. After World War II, apartments were so cheap and available that Manhattanites would regularly move every September just to get the landlord to repaint their new home. In those days, an apartment was a place to live. Now it is as much an investment as shelter.

Imagine trying to find an apartment in Manhattan for $530 now. It is almost inconceivable. These days a depressing number of young New Yorkers spend over half their income on housing. Rent hikes have transformed a once-democratic city into a playground for the privileged. Hardly anyone can afford to move to New York on an entry-level wage. It sometimes seems that the only twentysomethings that come to New York today have parents who help pay the rent.

During the boom years after World War II, Americans’ real wages more than doubled. A 30-year-old earned twice as much by the time he or she hit 50. This broad-based prosperity transformed the nation. In 1939, 25 percent of Americans didn’t have running water, only 65 percent had indoor toilets, none had television. By 1970, almost all had cars and dishwashers. The luxuries of an earlier age had become necessities. Between 1945 and 1973, the United States and the world experienced the greatest economic growth in history, not replicated before or since. Economic historians call those postwar years the Golden Age.

This explosion of affluence did not extend to New York City landlords. Rent control kept rent increases lower than inflation. Apartment prices remained stagnant. In 1976, you could buy a classic four-bedroom Park Avenue apartment in a doorman building for $36,000. Owning a building back then didn’t make you rich. Instead it was a drain on capital. The fires that devastated huge swaths of New York in the 1970s were generally set by landlords who saw insurance fraud as the only way to profit from their properties. The average rent that decade was just $335. You could rent a two-bedroom apartment in Greenwich Village for $250 a month.

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