Why don't construction prices go down?

Wages in the private sector have only increased slightly, while many prices have doubled. And even if there were wage increases, they are eaten up again by excessive taxes and levies. Keyword tax exemption and cold progression. A worsening housing shortage is also emerging here. Construction costs are rising and construction activity has collapsed. Rents are likely to increase significantly on their own. Renovation obligations, building energy law, energy prices, ancillary costs, etc.

Exactly, unearned incomes must be financed. Someone has to go to work and earn the money that the top 1% (maybe it’s 5%) receives unearned, simply because they already own capital.

Providing capital must also be compensated, after all, you are taking a risk. It only becomes problematic when certain companies are classified as systemically important and effectively receive a state insurance against wrong decisions. By the way, capital income is not reserved for the top 1%. Every savings account has capital income, and the stock market is also open to anyone who has a few euros left over. But that story doesn’t sell as well as the tale of class struggle.

From my point of view, it only makes limited sense to further expand cities in their size or to further densify their cores. Work should be rethought here, and office jobs that do not necessarily have to be done on site should be moved to other locations or home offices. For the insurance clerk, it doesn’t matter whether his desk is in Munich or Donauwörth.

That may largely apply to office jobs, but as soon as we talk about production, craftsmanship or personal services, you remain tied to a location. From an urban planning perspective, it certainly makes sense not to overload regional centers with more companies, but in the end, it’s a chicken-and-egg problem. If I wanted to establish a company in the automotive sector in Baden-Württemberg, the Stuttgart area simply makes sense because there is already correspondingly qualified personnel. In our Hintertupfingen, the space is cheaper, but it’s not so easy to find people.

That may largely apply to office jobs, but as soon as we talk about production, craftsmanship, or personal services, one remains location-bound. From an urban planning perspective, it certainly makes sense not to overload the regional centers further with companies, but in the end, it is a chicken-and-egg problem. If I wanted to establish a company in the automotive sector in BW, the Stuttgart area simply suggests itself because there is already suitably qualified personnel there. In Hintertupfingen, the land may be cheaper, but people are not so easy to find.

That is why I consciously referred only to office jobs, which account for the largest share of jobs in Germany. Manufacturing industry accounts for only 25% of the jobs.

Define Stuttgart area. Grünheide is also 40 km away from the Berlin center and has found enough qualified people who want to work there. If you look at the area there, it is very rural in character and there is sufficient space for housing. The transport connection is also very good. So where is the problem?

Where is the problem there?

The problem is, among other things, that the municipalities have sold off land they owned for decades and now therefore have no good tax options, simply to build housing themselves. "Saving" was so sexy that they squandered the family silver. Now they are sitting naked in the carrots.

Yes, the stock market is open to everyone. But there is a difference between being able to trade only 50 EUR or 50,000 EUR, because fees often have a fixed component and are capped at the top. So the 50 EUR trader pays a fee of 4.90 EUR, while the 50,000 EUR trader might pay 25 EUR. The 50 EUR trader therefore has to make a 10% profit just to break even, as the saying goes. And 10% profit is quite ambitious if you think long-term. Many funds cannot achieve that, for a lot of money...

Also with savings accounts... banks currently pass on the good interest rates only to new customers. Existing customers get nothing, especially old people with savings balances who are overwhelmed or would be overwhelmed by constantly switching banks.

And capital gains are taxed at 25%, while income is taxed at up to 45%. My marginal tax rate is certainly higher than 25%, meaning my productive work is less worthwhile than if I had inherited and lived off the capital gains...

Let's not even start on inheritances. There is plenty of evidence that a low inheritance tax increasingly concentrates capital at the top over generations. All sufficiently studied.

So please stop your class struggle...

The problem is, among other things, that municipalities have been selling off land they owned for decades and now, as a result, have no good tax options to simply engage in housing construction themselves. "Saving" was so sexy that they squandered the family silver. Now they are sitting naked in the carrots.

If I want to have good employees today as a company, then I have to make an effort for them. And by that I don't mean a fruit basket or free water in the hallway. Also in our area, a municipality with 6,000 inhabitants in western Bavaria, the first companies are planning to build apartments and houses for their employees and then provide them (taking tax laws into account). Not a new approach, several companies here already did that in the 1960s to accommodate guest workers. My employer has branches all over Bavaria and has enough apartments in every larger town that are rented to employees as needed.

It has now become fashionable to shift all problems onto the state and to put oneself in the passive victim role. In my view, municipalities should also not build new apartments because they usually do not take care of their maintenance and the huts are totally run down after a few years.