Wonderful that you are all here . It's full, it's hot.
We just left the train and we are very exited to be here.
Also, very warm welcome to Marion. Thank you so much for comming to out talk.
We are gonna start with a question
Who of you have ever been on Immoscout24 and has as such found an apartment?
All right, this speaks volumes. And who had a paid subscription with Immoscout24?
That's a few people less. And who successfully found an affordable apartment?
Oh, at least a few.
Immoscout24 entered the stock market and it's their part of Scout24.
And they entered the DAX, which is the German stock market, the top 40 numbers companies.
And they have pushed out Porsche, actually.
There was quite a few news articles and coverage.
And we sort of asked ourselves, like, how is it possible that an Internet platform
for living and housing pushes out big industrial companies from the stock market?
And Wirtschaftswoche, which is a German news outlet
for economy, has a specific framing for this.
But before we go into this, we want to talk about the crisis of living and housing.
So the housing crisis is not an information technology problem in the first line.
It's more a societal problem.
In the housing market, we have a very specific market.
So we have city space that is limited.
And this is obviously, like, fairly easily part of speculation.
So the demand is something that they use, like, it's called elastic.
It's a very fancy term for saying simple things.
You can't simply build houses from the grounds up the way
that you can produce chocolate bars when the demand increases.
So that means even if the demand is high and the prices are rising,
we sort of are lagging behind and we can't all of a sudden start,
like, part of the neoclassistic type of idea to, like, produce more.
What's often left out is living as a human right.
We kind of wanted to start from an economic perspective and
the economics, we would say that there's large transaction
costs, especially for people who are renting, for tenants.
That means even if there's an apartment that is somewhere else that would
work better, moving isn't one of those things that is just easily done.
It costs.
I mean, as a student, if you had five boxes, maybe
that was something that you could manage logistically.
But if you think about moving with a family with three
kids, good luck doing that next to a full-time job.
And you obviously all raised your hands. I've, like, looked for an apartment.
We all know what type of work that actually is.
It's almost basically a full-time job. So we have a structural asymmetry of power.
The tenants are completely inferior.
They can't just be like, oh, I'll just go somewhere else.
So just to kind of create an understanding of the
problematics that we're kind of working within.
So the reasons for the housing crisis, there's basically
three things that are essential that should be mentioned.
It's the privatization, mainly in the 90s.
Lots of cities sold social housing for quick money
to, like, increase the funds of the different cities.
And this was accompanied by deregulation, so a liberalization of the financial markets.
So then social housing was privatized, even though
renting in Germany is still the main way of housing.
So what then sort of happened was stock market noted housing associations,
so housing companies like Deutsche Wohnen, which is one of our
largest private housing companies that is part of the stock market.
So with that, you obviously have speculation entering this market.
So there is a massive shortage that was created through that.
And this graph in Berlin is going to be something that's going to guide us through.
So we are from Berlin, and this is why we're going to use Berlin as a reference.
So we don't just see why it goes up, but we sort of see the
rental from the already existing market versus the newly
created and the new offers that are out on the market.
So that difference is what we're interested in.
So the stuff that's being pushed out as a new stuff,
and then the stuff that is part of the existing market.
So what is this new question of housing, this new crisis of housing?
Why is this digital all of a sudden? And what are the reasons?
So it's not the platforms themselves that are, like, at fault.
But the digital question about this sort of is that you need to understand
is that a housing platform should be part of digital infrastructure.
It should be something that you...
Part of a digital, like, securing of livelihood.
We just sort of want to mention what the... So what's this platform's role?
They're sort of like an intermediary between the demand and the offers.
So algorithms are coordinating via data, like the
rules of what are these processes being handled.
So what's being offered? And so these platforms are quite powerful.
So what does characterise them? It's part of... Business model. Business model.
Thank you. So these platforms...
So there's a network effect that they can utilise.
between their different users and clients.
So third parties, financial companies, moving companies, like all sorts of,
like, affiliated, housing-affiliated markets can be, like, docked into this.
So this ecosystem keeps growing. This platform builds a very strong monopoly.
So there's an optimisation of demand and offer.
And everybody kind of wants to be on the platform, and everybody needs to use
the platform, and that's kind of a cycle that sort of keeps going and rolling.
And the third thing that is quite useful for the platforms is a scale effect.
So it's super easy to scale up really quickly without having a lot more costs on their end.
There are about three business models that are lined in with each other.
And this is all being sorted out very much.
And there's a short video on YouTube that you can find on the link below.
And these business parts are about...
There are sometimes, even for several times, the data is being sold to
financial providers, service providers, and the privatised customers segment.
Well, that's you, basically.
And this has been called a fucking money printing machine by the manager
magazine because they can utilise this a lot in the housing market.
And if you can see the sales of ImmoScout24 in 2024, you can see the private
market is only about 28%, while the business customers are the overwhelming part.
And you can see about 80% of these professional customers are... brokers
Real estate brokers, real estate agents, and ImmoScout24 is like
taking money from the market of the real estate agents, and they're
being criticised by the real estate agents, by the realtors.
And ImmoScout has quite a good answer to that.
So they say, well, realtors are businessmen, and they
wouldn't do that if they wouldn't have a return on investment.
So they are selling something.
And this is the possibility that they can possibly get rid of real
estate, which can ... probably won't be as easy to get rid of.
And you can put them on a window display until some customer will bite.
And they have several business models, like one ecosystem,
all businesses, blah, blah, and everything all at once.
And you can see that because they can...
At the moment, they are on the brink of pushing their prices for professional customers.
And when you can look back to the renters, we won't get too much into
the subscription model, because most of you probably know this one.
But we have an integration of several data that can be reused
with a promise of better chances to find a flat,
because they sell kind of a promise that you can see...
Yeah, there are also automatic Schufa-auskunft, and you can...
And it's probably unclear how long you will actually be looking for a flat,
but it's ahhh ... you can have like a six-month frame and stuff and ahh ...
The effects, how effective this subscription model probably is, is unclear.
And it has also been criticized, as well as the data collection.
The Schufa credit score has also been...
The integration of the Schufa credit score has been criticized,
and they have been sued because of wrong advertisement and failing data protection.
And we feel remembered of the first season of Big Brother,
where we had something like that again and
ImmoScout is optimizing this data -intensive business model more and more,
especially like Wohnen Plus, where also the subscription prices are rising,
and customers have to pay more.
And when you raise that to another level, to what has actually happened and look into that,
this is probably ahm... Yeah, there's also a pension extraction.
And it's about resources that are available, like
ground and unproductive activities that is...
Mostly that you get without any activity.
You get margins and income, generate income without doing anything,
and stuff and business models that are based upon that. Yeah, I call...
Yeah, that are used like pensions.
And ImmoScout has a huge growth market, growing market,
and there are a lot of profit, like in other industries.
This is really unbelievable. We can see even oil, the hugest...
All oil enterprises won't get margins like ImmoScout.
And we also have a few questions, and it's a wild ride.
And what we asked ourselves is, what happens on this platform?
Because they have access to the data, we don't really have that.
How does this develop that the rent always increases,
and what's the place that ImmoScout has in this?
And we looked at a data set of 7,273 listings in Berlin.
We got this from this November. You could web scrape this yourself,
but who made... who already made some experience in scraping big platforms?
That's a lot of work, and it always breaks.
So I thought, I'm not gonna take it up with a platform
that has 5 people to do scrape protection.
No, I'm going to an ominous platform, Rapid API, and I'm just gonna buy it.
So I downloaded it because... Yeah, choose your battles wisely.
We have, which is looking terrible, I just want to say it,
there is some information in those listings, which is not on ImmoScout.
So we, just so you know, we have with LMMs a lot of issues,
a lot of wrong information is coming out,
so we try to filter out which of those are with venture,
which is social housing, which is permanent housing,
which is just for a limited time.
And that is very relevant, and we try to filter that out.
So we made a prompt with a question to make the model classified.
So to start from, we took a point for the basic rent on ImmoScout
and compared it to other rent in the area, as well as in Germany overall,
both of which are cheaper than the 1767 per square meter that we got from ImmoScout,
which is not that intense, but if you keep going,
and you just imagine with a little math example,
how expensive would the basic rent be with that?
And in Berlin or Hamburg you find apartments that are like 80 square meters,
and if we then take the price from ImmoScout, that's 1,413 Euro of basic rent,
and that's not very little.
So the easiest thing that we could do in the beginning with this data is,
we got a little support for that from Meet&Check,
which I recommend if you live in Berlin and you
want to check whether you are paying too much rent,
go to Meet&Check, because they have a lot of questionnaires,
where in the end you get a result for how much rent you might be able to save.
And we use that, so thank you Gregor and Jonas.
So, now it's going to get nerdy because we're going into rent law.
It's about the, ahhm ... about the rental cap because the... ehm the
landlord can't take more than what is normal plus 10% for your area.
Just to point that out, the tenants have to actively
ensure that the rental cap is being followed.
That is something that the tenant has to demand actively,
and often that also has to be taken to court.
The Berliner Mieterverein, that's the tenant club of Berlin,
a lot of people are very unhappy with that,
because it's the only tool for regulation on the housing market.
Everything else isn't, well, it doesn't work.
The rent cap does not work for newly built housing after October 1st, 2014.
So, that's about a third of what you could get for a new rental place.
So, there's a bunch of like loopholes, like furnished,
split rentals, short-term rentals, all sorts of things.
So, this is why we used an LLM to analyze this.
So, just to reference rentals in the same area,
you need the year that an apartment was built, the size of the apartment,
and everybody has different categorizations for these things.
So, they usually get a PDF with 100 pages, something from the Berlin city,
and then you can like check where you fall within this category based on your address.
And then you have a lower end of things and an upper end of things.
So, we're not going to look into like equipment,
because you're sort of like, for us it's more
interesting for the analysis to kind of go with
what's the lower end of things.
We want to understand, ahm that we don't want to, like,
suspect that they are doing evil.
So, based on these listings where we can't find this year of construction.
So, anything that was built after 2014, we took out of these listings.
So, all of that is, like, new construction.
Social housing we took out of the sample,
and things where we couldn't really see, like furnishings and stuff like that,
we took that out as well.
So, we are doing a very conservative estimation of the upper...
Oh, I think I said that wrong the way around.
We're going to use the upper end of the reference rentals. All right.
So, what does that mean for our data set? So, we have these 7,000 listings, right?
So, only 43.3% we could really use.
So, roughly 3,000 that were part that even listed which year they were built in.
So, we took those, and then we extracted the other ones that we had to take out,
the other exceptions. So, again, we only had 43% of that.
So, roughly 1,300 apartments. 1,600, I can't see the slide right now.
So, roughly, like, this is what we could use,
where we could have the rental cap being applied.
So, there's a lot of offers for after 2014.
So, like, expensive new construction apartments.
So, you can imagine two pie charts, and they are being cut into half.
So, at the end, from the sample, we have 1,300 listings that
are left over that we can actually apply the rental cap to.
So, it was a bit challenging based on, like, you know, we have to do this by the law.
So, if we look at this set-up we ahm, of this supply, it gets really interesting.
So, the county-owned in Berlin are, like, roughly a couple hundred.
So, that's 2% to 3%. It should be 19%.
Anything that was owned by cooperatives, I found maybe
2%, but they are actually 11% of the entire market.
We really only find, and we could really only extract the large numbers.
So, there's different groups of interest that are being, like, that are represented here.
So, okay, so, social housing, there was 36 in our sample, found only very few.
We find a lot of furnished apartments.
So, what we can say is that we rarely find things that are in the lower
-end sector that are focused towards social housing and stuff like that.
All right, so, the findings that we have that are sort of tough to swallow.
It's, come with me, you can see this grey dotted line.
That's the line for the rental cap.
Anything that moves away from this, that goes upper, is larger
than the average rent that's already there, roughly by 10%.
And then, when we see the first red line, we actually are having them breaking the law.
So, 20% more and then 50% more is a paragraph
that we would be considered a criminal offence.
So, these laws have been undermined, undercut.
They're rarely being applied because the tenants need to prove that they have been abused.
So, you have to, you're the one who has to show the receipts.
So, the other person is taking advantage of your living situation
and that's really difficult to prove and that's rarely ever possible.
So, what we can see here on ImmoScout is that they are in no
way, shape or form in reference to what's actually possible.
And then, I talked to a lawyer who was like, depends a little.
So, those are all the furnished apartments, index rental prices, all of these things.
So, that gets a bit too detailed. So, we're not going to go into that.
So, we're going to look at the lower end where we can, with
confidence, say that the law is basically being broken and abused.
What does this mean?
57% of the listings from the sample are basically breaking the law of the rental cap.
And 41 of them could be considered as criminal offences
because the rent is so much higher and above the rental cap.
So, what does that mean?
Well, we're talking about 500, about thousands of euros per month
that the people could save if the rental cap would be applied.
But, you know, this is our data analysis, the findings.
Yeah, we could say, almost say it's with ImmoScout24,
a platform in the interest of real estate owners.
But, so we can say that there are probably small written, obviously
very small written, especially high priced flats, pushed forward
by furniture, short term rental and newly built real estate.
And it's creating some kind of false transparency
by pushing the prices in an artificial way.
So, why is this the case?
When you can see the real estate agent accounts
and you can see that you are looking for flats.
So, but most of you know it from the renter side, but when you are
looking from the other side, then you can see something like this here.
It's the estimated rent. This value. *speaks german*Ah. Okay. Very sad.
And we asked ourselves, how could this platform
look if they were in the interest of renters?
And we can, we take you with us on a travel to the
speculative platform design on the rainbow for Red Scout24.
Disclaimer, it's not about creating a prototype.
It's just, we want to use it as a kind of utopia, the slides.
And like we showed in the beginning, the rental market is
using this asymmetry to the benefits of the offerers of flats.
And it seems to rather enlarge the problem instead of doing anything against it.
And so, as part of a public duty of the state, we can say welfare.
And we can see, this is not only software design as a utopia, but it's also a way
to create a platform for everyone and a structure for renters and for everyone.
And to make it a democratic and, ahm yea, social structure
that is creating a way for that and taking renters into
account and regulate the market, the real estate market,
so that everyone who can, who is on this platform can be traced for a development.
And this is better than a digital enforcement of
making, integrating everything in the platform.
And if we look at this, how we look on a platform, we cannot stay with sponsored
offers for luxury apartments, but we have to start with public housing.
We can start with, what do you need?
How many people are supposed to live in this flat?
How much money do you have per month?
And which are the places that you need to visit on a daily or weekly basis?
Are there other things we need to know? Do you need, are you in need for help?
Do you have, are you obliged for a, yeah.
The rent check does, shouldn't be a thing that
tenants do, but should be something that tenants do.
So that listings that very obviously are against the rental
cap and violate the law shouldn't even be on the platform.
Another feature that would be interesting would
be to turn it around with the landlord rating.
So transparency in both directions. How reliable is the landlord?
How is it with maintenance?
And how many objects or places of housing does the landlord have?
And then it would be possible to let the landlord rate prior tenants.
We would have it so that an algorithm for sorting would
recommend 30 potential tenants, which would be ranked.
The landlord would then have to show the apartment.
And there would be different criteria than would
you be able to give us access to your bank account.
And we saw that you have a lot of money. So that's all not very easy.
So another easy addition.
If you are interested in this, you can look at Deutsche Wohnen Enteignen.
And if you ask yourself what's the answer for everything, 42.
And if you are interested in participating, maybe write us a mail.
And thank you very much.
Thank you very much, Sarah and Leonard, for the very informative talk.
We have about six minutes of time for questions.
If you have questions, come to microphone one or two. Are there questions online?
No, nothing? Okay, then we'll start with microphone one.
Thank you very much for your talk.
One quick question about communal politics perspectives.
Would it be possible or would you recommend that
a commune or a city makes their own housing portal
as a competitor so that it would be locally first to make that more attractive?
Would that be an option?
From my point of view, if it's about creating an
alternative to the current situation, definitely.
And apparently there are some communes where they already use that in practice.
I don't know whether it's Munich or somewhere else. I don't remember.
But there are definitely some communes.
And also Berlin does make an effort to have own platforms so that they can take different
ways to search. But it doesn't really matter because you can't really touch them.
And that's not really the solution because the
platform does have to be socialised, essentially,
so that all of the offers have to be on one platform and we can decide what are the rules
on the platform.
You can make an argument in communal politics,
probably, but I don't think that's the answer.
All right. Thank you. Mic number two in the back. Also from Berlin.
I live in a one-bedroom apartment.
I have a friend who two, three years ago tried to
enforce the rental cap and is still has an ongoing
case in the courts.
My apartment is part of a Bavarian company that is owned by a private person in Bavaria.
And I obviously worry about, like, somebody coming and, like, claiming to use the apartment
for their own use. And this is how you can get tenants out of the apartment.
It's a personal need end of the contract.
So, basically, like, I'm afraid that they're going to, like, just claim my daughter wants
to move to Berlin, kicking me out of the apartment to then increase the rent.
I can't really offer any, like, legal advice.
What I can tell you is join the Tenant Protection Association.
They have legal advice that they can give you.
They have lawyers that are equipped for that.
And depending, like, talk to people who are equipped to do this.
I can't really offer this.
But there is, obviously, there's a threat, there's a danger of this.
But inform yourself that this isn't being registered anywhere.
No, the data is nonexistent, basically, when it comes to that.
Maybe additionally to that, we kind of showed, like, how many loopholes the rental cap has.
Your case, for example, is a classic case.
And this is obviously, like, something where, like, people are demanding.
We had this thing, like, a different type of rental cap, which then
got cancelled in the courts because rent law in Germany is something
that's based in the central government, not the county governments.
So this is a very specific Berlin case.
So, like, obviously, like, living and losing
your apartments is, like, existential questions.
I guess we have two more questions. Time for two more questions.
One from the Internet, please.
Yes, the Internet would like to know if you ever thought about having
an automated answer to landlords that your offer is potentially illegal.
I'm going to – it's about the platform that we've thought about.
Is this our Utopian platform?
Of course, yes, that's a very obvious feature for us.
You just shouldn't be able to put this offer online.
If you're breaking the law, then you should not be able to publish your rental offer.
All right. Thank you. Microphone number one, please.
I really like the graphic that you showed with the recommendation of a price.
There's obviously been different cases when groups of
interests are using other things for reference points.
And then that basically ended in the, like, courts that decide over, like, competition law.
Oh, I know nothing about competition law.
But I don't really have that much trust in that judiciary system.
But I don't really know much about it, so I can't really say.
I guess we have one more question. We have one more time for question.
Just one note.
I just wanted to say that you kind of talked about the unearned income.
The land value tax. Like, how?
I think that would help if you would take that into consideration as well.
Just wanted to leave that as a note. Thank you so much.
Thank you so much for listening to us of this translation
of Red Scout 42 on the digital housing question.