26/08/2021 Why rent control isn’t working in Sweden - BBC News

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Why rent control isn’t working in Sweden

By Maddy Savage

Stockholm

17 hours ago

MADDY SAVAGE

Swedes are also less likely to live with their parents than any other young Europeans

In a red-brick 1960s tower block, 20-year-old Oscar Stark is heating leftover

vegetarian pasta. He keeps to a strict food budget, because more than half
his income goes towards sub-letting a studio apartment in one of
Stockholm's outer suburbs.

"I struggle to make it work, but I'm not giving up," says the marketing
consultant.
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26/08/2021 Why rent control isn’t working in Sweden - BBC News

Mr Stark couldn't find anywhere cheaper than 11,000 kronor (£920; $,1260) a
month to rent and is unable to stay at home with family, because his mother
lives elsewhere.

"I really don't have a choice, but of course I'm not satisfied," he says.

MADDY SAVAGE

The average time spent waiting for a rent-controlled property in the capital is now nine years

A shortage of accommodation in Stockholm and other cities, is causing a

major headache for young Swedes - in a country which has been championing
rent controls since World War Two.

Rents are supposed to be kept low due to nationwide rules, and collective
bargaining between state-approved tenant and landlord associations.

In theory, anyone can join a city's state-run queue for what Swedes call a "first-
hand" accommodation contract.

Once you have one of these highly-prized contracts it's yours for life. But in
Stockholm, the average waiting time for a rent-controlled property is now nine
years, says the city's housing agency Bostadsförmedlingen, up from around
five years a decade ago.

This wait-time doubles in Stockholm's most attractive inner-city

neighbourhoods.

The traffic-jam has fuelled a thriving sub-letting or "second-hand" market,

with "first-hand" renters and owners alike offering apartments to tenants for
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26/08/2021 Why rent control isn’t working in Sweden - BBC News
very high prices, despite regulations designed to stop people being ripped-off.

"I really feel like Sweden actually has failed [on housing]," says Mr Stark, who
believes he pays double the price his apartment should be leased for.

Other rent-controlled apartments are passed between relatives and friends,

which benefits those with existing networks, and challenges newcomers to the
city.

In Stockholm's most elite central district, Östermalm, Christoffer, who asked

just to be identified by his first name, splits a similar rent to Mr Stark with his
girlfriend, for a one-bedroom flat found through a colleague.

"It's obviously a privilege to be in that position," says the 24-year-old part-time

student and start-up worker. "It's not a good solution in the long term to have
to rely on that."

GETTY IMAGES

The Swedish capital's skyline is dominated by apartment blocks

Regulations designed to prevent owners from making long-term profits are

also fuelling market instability.

Since even legal sub-lets can rarely be extended beyond a year or two, it
means those renting "second hand" have to jump between short-term
contracts.

Rooms in flat-shares are also hard to come by. Most rented housing is for
independent rather than group living: Sweden has Europe's highest proportion
of single-person households.
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"I have a lot of friends who are struggling - moving many times per year," says
Maria Grigorenko, a 29-year-old brand manager in Stockholm who is originally
from Russia.

She recently got a rent-controlled apartment after queuing for nine years. But
says she knows few others "as lucky" as her.

"In principle I do believe the system is there to help, however, I think that the
market and the demographics have changed so much."

BENOIT DERRIER

In Sweden flat-sharing is uncommon, compared to other European cities

Europe-wide problem?
Despite its complex challenges, Sweden is in a better position on housing than
many other EU countries.

Only around 8% of Swedes live in households spending more than 40% of

disposable income on housing, compared to 15% in the UK and almost 40% in
Greece, according Eurostat data.

Swedes are also less likely to live with their parents than any other young
Europeans.

But until recently, getting a well-maintained, rent-controlled apartment

straight after school is something some Swedes have just taken "for granted",
argues Liza, a 37-year-old tech worker, who didn't want to share her last name.
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26/08/2021 Why rent control isn’t working in Sweden - BBC News

She moved to London from Stockholm last year, and believes Swedes
complaining about housing shortages would do well to put their struggles in a
wider context.

"In the UK, apartments are often super old and not of good standard, even
though the rent would be much more than in Sweden."

GETTY IMAGES

Sweden's Covid experience has been very different to lockdowns endured in its neighbours

But others argue the increasing squeeze on Stockholm's housing mirrors the
worrying pattern of young people being priced out of Europe's capital cities.

An Abbé Pierre Foundation report released in May indicated a 11.5% rise in

the number of young Swedes on low incomes living in overcrowded properties
since 2009.

Businesses have also raised concerns about the economic impact, as cities
seek to attract skilled workers. The Confederation of Swedish Enterprise
(Svenskt Näringsliv) says one in five firms have found it difficult to recruit staff
because of housing shortages.

The long-running focus on rent-controlled buildings also means there are

comparatively fewer private letting agencies and corporate apartment
possibilities than in many European cities.

"We were looking to help a family from London relocate to Stockholm and it
was not possible for us to find a variety of [housing] options for this to be
feasible," says Harald Överholm, who runs a solar power start-up in
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26/08/2021 Why rent control isn’t working in Sweden - BBC News
feasible, says Harald Överholm, who runs a solar power start up in
Stockholm. "It's very frustrating."

MADDY SAVAGE

Companies in Stockholm are struggling to find housing for overseas staff

Finding solutions
Efforts are being made to solve this. Between 2015 and 2019, Stockholm
gained 83,000 new homes, with construction increasing at an "unusually high"
rate, according to Länsstyrelsen, a state-run body which connects municipal
and national authorities.

But Sweden's leaders are deeply divided on other moves.

Some centre-right opposition parties want incentives to help more young

people to buy instead of rent, such as lower mortgage payment requirements.

Others argue that if private landlords can set their own prices - already the
case in most European cities - this will stimulate more investment in rental
accommodation.

"A new market model needs to price rent more accurately," says Dennis Wedin,
a housing spokesperson for the Moderate party, which is in opposition
nationally but leads Stockholm city council. "A result would be slightly higher
rents in the city but lower in the suburbs."

The Social Democrats, who lead the country's centre-left national coalition,
recently mulled reforms allowing market rents for newbuilds - but
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26/08/2021 Why rent control isn’t working in Sweden - BBC News

backtracked in June after the idea temporarily brought down the government.

"We like our system with the rent control, because that's a system where
everybody can afford a rental apartment," says Karin Wanngård, Stockholm's
Social Democrats leader. She says a market system would push up rents,
making Stockholm less "open" for low-income residents.

PETER KNUTSON

Politician Karin Wanngård feels adopting a market system would push rents higher

But she agrees that even with major investments, it could take a decade to cut
tenants' waiting time to less than a year or two.

The private sector is also attempting to tackle this, with a few co-living spaces
springing up - including converted apartment buildings, a medieval townhouse
and a former hotel. Kitchens and communal spaces are shared, and some offer
hostel-style bunkbeds for those on tight budgets.

For tech worker Liza, who lived in two co-living properties in Stockholm, the
experience was a positive, it saved her money and introduced her to friends
she'll stay in touch with "for years".

"Although I know it is still considered a bit different...it's actually a really

amazing, healthy way of living."

It's not for everyone though. Back in his suburban studio, Oscar Stark is
sceptical. "The Swedes are very introverted in general and not as social."

While potential solutions are debated, Sweden's swelling population looks set
to add to the problem. Stockholm's one of Europe's fastest growing regions,
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Why rent control isn’t working g News g
in Sweden - BBC g
with an extra 400,000 people expected in the city by 2030.

Where they will all live, remains to be seen.

Related Topics

Sweden Lifestyle Renting Young people

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