It Takes How Long to Find An Apartment in Stockholm?

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It Takes How Long to Find An Apartment in Stockholm?

We found ourselves in central Stockholm surrounded by bikes – but not a single one was a City Bike. Nor was there wifi.

AA started hunting for internet. Meanwhile, I stopped a fellow pedestrian.

“Oh, the funny-looking bikes. Just go straight and they are either on the left or right,” he told us.

And with that helpful advice, AA found a signal and pulled up the City Bikes app.

We tracked down two bikes and headed over to our destination for the day – a free walking tour of the historic heart of Stockholm, Gamla Stan.

This tiny island is a top tourist attraction for its medieval architecture and cobbled streets. Most of the buildings on Gamla Stan were constructed in the 17th century, but the neighborhood itself dates back to the 13th. In those days, the island was a third of its original size, overcrowded and built of wood.

Needless to say, fire was one of the primary scourges of life. But stone replaced wood, and the housing woes of Stockholm today are of a different, and less dangerous nature.

A Socialist Nightmare?

Now, finding an apartment in Stockholm is harder than quantum mechanics. Many blame this on rent stabilization, which caps rents on all units in the program. Stabilized leases are secure and affordable, but it can take up to 20 years to snag one.

That’s right, 20 years! And we thought the City Bikes were scarce!

With wait times this long, something is clearly wrong with supply and demand. Of course, not all units are rent stabilized, so are things really that bad?

Pundits say yes.

According to the press, Stockholm is a socialist nightmare. The city’s rent regulations are vilified for creating a housing crisis and driving up rents in the unregulated market.

Still, as one economist says, “regulation per se is neither good nor bad. What matters are the costs and benefits of specific regulations under specific market conditions.”

With this in mind, I asked myself the following questions when I heard the above accusations:

  1. By how much does rent stabilization raise market rents? I believe most of us would consider it a fair trade to pay $10 more per month in exchange for the eventual opportunity to sign a rent-stabilized lease.
  2. What other factors may affect housing production? Other variables may also be blamed for the discrepancy between housing supply and demand. Population growth, the Great Recession and taxation policies favoring condominiums all affect rental production as much as stabilization.
  3. What are the specifics of the regulation? Even if rent regulation is to blame for Stockholm’s crisis, a different form of rent regulation may not produce the same results. Specific elements of a rent stabilization policy can mitigate negative side effects, like exempting new construction from regulation.

Start With the Ends Not the Means

Coming from New York City, where the rent is too damn high, I can’t help but think, “wouldn’t it be great to solve all worries with the stroke of a pen.”

It’s never that easy though.

Here’s the thing, in NYC market rents are not much higher than stabilized. It’s only in the white-hot Manhattan market where prices diverge. And is this not the main point of rent stabilization – protecting tenants from double-digit rent increases?

Not for nothing, but there’s also little empirical evidence that New York City’s current rent stabilization policies drive up costs in the unregulated market.

Sweden’s housing reform advocates are now pushing for a rent stabilization system that is more like New York. I have to say, their take on reform is refreshing. No vilification of the whole enterprise, just specific policy proposals to make things better.

Start with the ends and work your way back to the means. Figure out what key factors are preventing rental construction. Don’t blame the crisis on one thing.

But I can’t resist – maybe’s it is just population growth is too high.

You’re surrounded by cheaper housing just 30 minutes away, but that job card is only valid in the big city. So what do you do? Wander around until you find an apartment. And hope it’s stabilized.

What do you think? There’s much more to say on this topic, let us know with a comment.

Erika

Erika

I was raised in a tight-knit Midwestern family with a strong commitment to service. An architect by training, I currently work in affordable housing finance. Prior to moving to NYC, I lived in Nicaragua for two years and have also spent time in West Africa and the Middle East. I started this blog as a way to catalog musings on travel and everyday life around the world.

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