February 14, 2012
Published: 13 Nov 09 16:44 CET | Double click on a word to get a translation
Online: http://www.thelocal.se/23258/20091113/
A government memorandum has concluded that both public and private housing companies should negotiate rental fees with tenants based on a utility based system, rather than fees being market-oriented.
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Government ensures lack of rental housing in highest demand locations
Government endorses black market rental system for rental housing in Stockholm
Like everything else in Sweden that is totally "controlled" (Systembologet, etc), it suits the incumbents to keep the status quo, making it difficult for new entrants to enter the market.
But then again, the writer was merely telling the truth. The fact is that this would be catastrophic here in Sweden. The government has controlled so many things for so long that losing this control would put people in quite a predicament.
I must say that the one advantage to having their hand in the market is the fact that the elderly and young can "afford" to live in the city center, making the city a more complete "slice" of Sweden's people. However, the negative ripple effects from price ceilings far outweigh this social benefit. As a result, the rest of us living in the city center face an absurd shortage of apartments and sickening rental prices as a result.
"Market-oriented rents would have been a catastrophe for the country's tenants", says Barbro Engman. Over time, consumers would only benefit. However, I think what Barbro really means is that this would be catastrophic for the politicians.
I'm not sure it would be catastrophic. You seem to argue both aspects good and bad. In Sweden and other countries your good point about older people and young people in the cities are addressed by subsidized specialize housing of which Stockhlom already has built for retired people. The universities and dorms also help in the younger people department. Phasing these things in works. Maybe remove controls for new or increases housing stock could allow some new development near the city.
Beside there is already a big black market where controlled rents are basically sold combined with the lack of rental units which is really the problem ..