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Rent control blamed for housing shortage

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11:04 CET+01:00
Sweden's rental control system has been blamed for causing the housing shortage particularly in Stockholm according to a new report issued by the National Housing Board.

The report claims that the system, which allows low rents in wealthier locations, is actually a deterrent to developers building new rental apartments. 

"What we found is that the inefficient allocation of apartments is very big in comparison to the under-supply. What this means is that the efficiency level is reduced in comparison to the official level. This under-supply is accumulated over several years," Pål Sjöberg, project leader of the National Housing Board (Boverket) report told The Local.

According to the report the rent control system means that not enough new rental apartments are being built while at the same time existing housing is not being used efficiently.

As a result Sweden lacks 40,000 rental flats with the housing shortage most pressing in the big cities especially the capital.

"The problem is very big and concentrated in Stockholm but also Gothenburg. It is more of an indirect form of rent control in Sweden.

"People who have got the rental contracts don't want to move and that makes it more difficult for those who are looking for a place to rent," said Sjöberg.

Supporters of rent controls say they prevent segregation between rich and poor areas, with affordable apartments available even in rich parts of the city.

Opponents say that the system creates a black market in the swapping of rental contracts, and point to the fact that segregation exists despite the rent controls.

Sjöberg, who led the research into the Boverket report, said that he had sympathy with those who move to Sweden and struggle to find somewhere to live.

"I can understand their frustration especially for immigrants and students who come here to study. What we have done is analysed a part of the system and that is important for outsiders are losing out based on the current system. Too few rental apartments are being allocated," he said.

In August the Swedish Property Federation (Fastighetsägarna Stockholm) published a report on rent control in the capital saying that it was "a shield for well-established insiders who already have a home."

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Despite the findings of the Boverket report Sjöberg said it is too early to suggest scrapping the rent control system.

"We can't say the system must change based on this analysis as we need to investigate other aspects before making such a conclusion." 

Patrick Reilly/TT

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