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The ugly side of rent control means … a severely limited supply where applicants wait 9+ years for rent-controlled apartments.

 

WRITTEN BY SHEA MONAHAN  |  THE REAL DEAL  |  SEPTEMBER 11, 2022

 

What’s the best way to celebrate your 18th birthday in Stockholm? It’s registering for the city’s public housing waitlist. If you’re lucky, you might secure an apartment by the time you’re 25.

The market for affordable housing has become so competitive in the Swedish capital that the average wait time for rent-controlled apartments — which make up nearly half the city’s rental housing stock — is now 9.2 years, Bloomberg reported. In some parts of the city, it can take two decades to get off the waiting list.

It’s a familiar story: too many people clamoring for too few units. But in Stockholm, the problem is particularly pronounced. An estimated 43 percent of apartments in the city are rent-controlled, and under housing reforms instituted in the 1930s, residents of those units are entitled to permanent tenancy — a system similar to that proposed by good cause eviction measures in some parts of New York.

The system is intended to keep rents affordable by subjecting them to bargaining between government-approved landlord and tenant associations. But it’s also severely limited supply, pushing prospective renters into a less-regulated sublet market, where some resort to bribery or are faced with discrimination and sexual harassment.

Those who do get off the waitlist tend to be wealthy, connected or simply fortunate.

“Sometimes it can also just be blind luck,” Ola Palmgren, a board member of a national tenants association, told Bloomberg. “We obviously don’t want the real estate market to function that way.”

Councilor Dennis Wedin, Stockholm’s vice mayor of housing and real estate, said plans to build additional housing have been hindered by rising costs due to supply-chain hang-ups and inflation.

His advice for prospective renters: “Start saving.”

 

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