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War, Housing Rents, and Free Market: Berlin's Rental Housing during World War I

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  • Kholodilin, Konstantin A.

Abstract

New archival evidence on housing rents in Berlin over 1909–1917 is presented. The data are extracted from newspaper announcements and georeferenced. Using hedonic regressions, quality-adjusted rent indices are constructed and employed to analyze the rental dynamics during World War I, when housing market experienced several shocks. The outbreak of the war led to an outflow of men from cities. Toward the end of the war, the construction freeze together with an inflow of workers and discharged soldiers resulted in a housing shortage. The analysis shows a rent decline (particularly for cheap dwellings) during the first half of the war, followed by a moderate increase. In 1917, given a dramatic overall price increase, real rents lost half of their value. Thus, regulatory policy did not emerge as a result of market failure, but rather the fear of rapid rent increases as a consequence of the supply stagnation despite growing housing demand.

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  • 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.
    • Handle: RePEc:zbw:espost:167600
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    1. Kholodilin, Konstantin A. & Limonov, Leonid E. & Waltl, Sofie R., 2021. "Housing rent dynamics and rent regulation in St. Petersburg (1880–1917)," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 81.
    2. Konstantin Kholodilin & Irina Koroleva & Darya Kryutchenko, 2022. "Where is the consumer centre? A case of St. Petersburg," Regional Science Policy & Practice, Wiley Blackwell, vol. 14(4), pages 916-938, August.
    3. Konstantin A. Kholodilin & Irina Krylova & Darya Kryutchenko, 2017. "Finding the Consumer Center of St. Petersburg?," HSE Working papers WP BRP 165/EC/2017, National Research University Higher School of Economics.
    4. Richard Keely & Ronan C. Lyons, 2022. "Housing Prices, Yields and Credit Conditions in Dublin since 1945," The Journal of Real Estate Finance and Economics, Springer, vol. 64(3), pages 404-439, April.
    5. Konstantin A. Kholodilin & Irina Krylova & Darya Kryutchenko, 2017. "Where Is the Consumer Center of St. Petersburg?," Discussion Papers of DIW Berlin 1666, DIW Berlin, German Institute for Economic Research.
    6. Richard Keely & Ronan C Lyons, 2019. "Debt and Taxes: The Sale-Rent Housing Price Ratio in Dublin since 1945," Trinity Economics Papers tep0419, Trinity College Dublin, Department of Economics.

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