http://freerangestock.com
In the latest party leader debate, Jan Björklund took the blade from his mouth and demanded market rents in newly built apartments.
What consequences would market rents have?
Should the private construction companies cover the need of rental units, rental levels would go down which would reduce potential profits. As there is a housing shortage in more than half of the country's municipalities, rents would rise significantly. The private companies are interested in profit maximization. There is thus an economic incentive to maintain a certain shortage.
Furthermore, the lack of housing would lead to reduced flexibility in the labor market because there would be too few apartments and too high rents.
The consequence would also be an increase in overcrowding and a later establishment in adulthood for young adults. Increased overcrowding would also lead to an increased risk of ill health with less space for privacy and study.
The management consulting company Ramböll writes about market rents to:
"Abolition of today's rental system results in a societal economic cost of at least 2,1 billion per year or 10,1 billion over a five-year period."
Rent levels are already so high today that the rents for many households make up a large part of the household budget. The Liberals' proposal would raise rents even more. Households would have lower purchasing power and would not be able to contribute as much to the economy as a whole.
Market rents are a neoliberal idea from the right-wing Liberal party.