undefined | Better HN

0 pointsJeffL12y ago0 comments

See the chapter in Economics in One Lesson about how rent control makes everything worse.

http://steshaw.org/economics-in-one-lesson/chap18p1.html

0 comments

3 comments · 1 top-level

e12e12y ago· 2 in thread

Do they have examples from Sweden? Because my impression is that it works pretty well there (especially if you compare with Norway).

klipt12y ago

How does Swedish rent control work? Because in San Francisco it only applies while the same person is living there. So old tenants keep their "original rent" with small inflation linked increases, while new tenants pay the much higher "market price".

So in the same apartment building you have a new tenant paying $3000 and an old tenant paying $400 for same size apartments. I.e. the new tenant is overpaying to subsidize the old tenant who is underpaying.

e12e12y ago

I'm not sure, but I think it is more of a "regulated market/fixed price w/index adjustments based on inflation". So a price will have been set at some point in the past, and is adjusted up a few percent every year, depending on inflation (typically less than 2% I think for Sweden).

To be clear, there is a "black market" of sorts wrt apartments in Sweden -- not sure how that works, but I think it is people illegally sub-letting at a higher price and/or owners taking a "bribe" on top of the regulated rent -- and it can be hard to get apartments in certain areas (high demand, too few new buildings) -- but my impression is that on the whole, it works much better than an unregulated marked, like the one we have in Norway.

Perhaps someone from Sweden can comment further.

j / k navigate · click thread line to collapse