Germany and Denmark are tired of the social problems of high rents and are now introducing various forms of rent regulation. Can't Sweden learn from the experiences of these countries? Can't we refuse to introduce market rents in new production and skip those points in the January agreement?
In Denmark sheep now landlords do not raise the rent during the first five years after the purchase and/or renovation ( https://www.hemhyra.se/nyheter/stopp-spekulation-och-snabba-hyreshojningar-danmark/ )
"Berlin introduces a law that stops rent increases, introduces a rent ceiling and forces reductions of rents that are too high above the ceiling. "
( https://www.hemhyra.se/nyheter/berlin-infor-hyrestak-vardar-tvingas-sanka-overhyror/ )
If the landlord gets more power over rent setting, rents can be as high as they like according to the principle of supply and demand. Anyone looking for housing cannot reduce demand and choose to be homeless without serious health risks. In Asia where market rents exist, a regular second home can cost 50 a month.
Drastically increased rents likely to give:
- Overcrowding that leads to poorer study environments for poor young people and more diseases such as the deadly respiratory disease tuberculosis. This is already starting to spread in some crowded places in Sweden
- Reduced consumption and fewer jobs in Sweden as the general purchasing power decreases as rent takes up an increasing share of the income of a broad population
- Fewer homes because the more apartments there are, the harder it is for the landlord to push up the rents. This connection is historically common. Among other things in Sweden before we introduced subsidized, rent-regulated tenancies for ordinary people
- Even more expensive privately owned homes such as villas and condominiums. Everyone will do everything to avoid renting their home. This leads to more private over-leveraging among ordinary people who are desperately looking for housing. This can lead to more financial crashes and personal bankruptcies with lifelong debt when, in new recessions, people cannot afford to pay all their loans and especially when home loans
The solution is to reduce the interest deductions for privately owned housing to allow them to finance more subsidies of rent-regulated apartments.
Nevertheless, you have to see price caps as a failure, regardless of which goods are involved. The reason why the price of food went up when there was a crop failure in the past was that too little was harvested.
The best way to lower rents is to produce so many homes that supply matches demand at a reasonable price level. That is to facilitate construction.
And according to both the Swedish Housing Agency and the construction industry, the biggest obstacle to construction is that it is too expensive and difficult to make a detailed plan. It will therefore only be done if construction can be guaranteed. This means that there is a construction company that is pushing right there.
In the 1880s and 90s, Stockholm managed to double its housing stock in quite a few years - without lowering the quality - at least we now think that what was produced then is good. The reason was that they made a town plan that was bigger than what already existed, and let the plot owners start the construction without any other check than that they checked afterwards that no one broke the rules.
We can do that again!
As far as I know, most working-class housing before the million dollar programs of the 1960s was of abysmal quality. Historically, market logic does not work in the rental market. At market rents, property owners only build so much that they can still charge usurious rents for extremely substandard quality.