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Fifty Shades of State: Quantifying Housing Market Regulations in Germany

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  • Konstantin A. Kholodilin

Abstract

The paper aims at measuring the rental housing market regulations in Germany between 1913 and 2015. Four classes of housing policy are considered: Rent controls, tenant protection, rationing of housing, and fostering of social housing. Based on a thorough analysis of federal and regional legislation, for each class, an index is constructed, increasing in degree of regulation. The average of class-specific indices make up a composite index. The index reflects dramatic increases in regulations during and immediately after the World Wars. Likewise, the 2010s are characterized by a surge in virtually all classes of regulations in Germany related to the growing housing scarcity in large cities due to intra- and international migration leading to a geographical mismatch between housing supply and demand.

Suggested Citation

  • Konstantin A. Kholodilin, 2015. "Fifty Shades of State: Quantifying Housing Market Regulations in Germany," Discussion Papers of DIW Berlin 1530, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp1530
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    References listed on IDEAS

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    1. Makram El-Shagi & Claus Michelsen & Sebastian Rosenschon, 2014. "Regulation, Innovation and Technology Diffusion: Evidence from Building Energy Efficiency Standards in Germany," Discussion Papers of DIW Berlin 1371, DIW Berlin, German Institute for Economic Research.
    2. John Dawson & John Seater, 2013. "Federal regulation and aggregate economic growth," Journal of Economic Growth, Springer, vol. 18(2), pages 137-177, June.
    3. Dan Andrews & Aida Caldera Sánchez & Åsa Johansson, 2011. "Housing Markets and Structural Policies in OECD Countries," OECD Economics Department Working Papers 836, OECD Publishing.
    4. Alberto Alesina & Silvia Ardagna & Giuseppe Nicoletti & Fabio Schiantarelli, 2005. "Regulation And Investment," Journal of the European Economic Association, MIT Press, vol. 3(4), pages 791-825, June.
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    6. Carlos Cuerpo & Peter Pontuch & Sona Kalantaryan, 2014. "Rental Market Regulation in the European Union," European Economy - Economic Papers 2008 - 2015 515, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    7. Giuseppe Nicoletti & Stefano Scarpetta & Olivier Boylaud, 2000. "Summary Indicators of Product Market Regulation with an Extension to Employment Protection Legislation," OECD Economics Department Working Papers 226, OECD Publishing.
    8. Joseph Gyourko & Albert Saiz & Anita Summers, 2008. "A New Measure of the Local Regulatory Environment for Housing Markets: The Wharton Residential Land Use Regulatory Index," Urban Studies, Urban Studies Journal Limited, vol. 45(3), pages 693-729, March.
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    Cited by:

    1. Lars Vandrei, 2018. "Does Regulation Discourage Investors? Sales Price Effects of Rent Controls in Germany," ifo Working Paper Series 262, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    2. Weber, Jan Philip & Lee, Gabriel, . "On the Measure of Private Rental Market Regulation Index and its Effect on Housing Rents: Cross Country Evidence," Beiträge zur Immobilienwirtschaft, University of Regensburg, Department of Economics, number 21, August.
    3. International Monetary Fund, 2016. "Germany: Selected Issues," IMF Staff Country Reports 2016/203, International Monetary Fund.
    4. Bayar, Mehmet, 2016. "The impact of cultural diversity on the German housing market," Ruhr Economic Papers 662, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    5. Kholodilin, Konstantin A., 2016. "War, Housing Rents, and Free Market: Berlin's Rental Housing during World War I," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 20(3), pages 322-344.
    6. Konstantin A. Kholodilin & Andreas Mense & Claus Michelsen, 2016. "Market Break or Simply Fake? Empirics on the Causal Effects of Rent Controls in Germany," Discussion Papers of DIW Berlin 1584, DIW Berlin, German Institute for Economic Research.
    7. Lorenz Thomschke, 2019. "Über die Evaluierung der Mietpreisbremse [On the evaluation of the German rental price break]," Zeitschrift für Immobilienökonomie (German Journal of Real Estate Research), Springer;Gesellschaft für Immobilienwirtschaftliche Forschung e. V., vol. 5(1), pages 21-36, November.
    8. Martin Groiss & Nicolas Syrichas, 2025. "Monetary Policy, Property Prices and Rents: Evidence from Local Housing Markets," Berlin School of Economics Discussion Papers 0058, Berlin School of Economics.

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    More about this item

    Keywords

    Housing policy; rental housing; Germany; regulation index;
    All these keywords.

    JEL classification:

    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • N9 - Economic History - - Regional and Urban History
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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