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> SEVENTEEN YEARS. GOOD LUCK, COMRADE. You fail to show how that's worse than the version in other places. All you have is an "appeal to anti-communism"(1). No

by sgift 7y ago

> SEVENTEEN YEARS. GOOD LUCK, COMRADE. You fail to show how that's worse than the version in other places. All you have is an "appeal to anti-communism"(1). Not having to fear that you loose your living space because some investor decided to price you out of it seems valuable and something that should be weighted against the hardships of being able to rent something easily in Stockholm. (1) Is there a fallacy name for that? I think there should be, it's one of the most popular fallacies here in any financial discussion.

henrikschroder 7y ago
I explicitly talked about how the job market is affected. If your only real options are to buy or to queue for a decade, that requires you to commit to a long-term plan if you want to move to Stockholm for work. This means you can't grab quick opportunities, you can't move to Stockholm on a whim to try your luck, so local companies and the local economy suffers. Fewer people move to Stockholm than who otherwise would, which means the city misses out on potential growth. It's an inefficient allocation of the work force on a national level. There might be some social good to artificially restricting the growth of your most important economical urban centers, but I highly doubt it. The supposed benefit of rent control is that attractive inner-city apartments are cheap. Sure. But since rents are based on utility value instead of location or attractiveness or market value, this means that unattractive apartments two hours from the inner city cost as much to rent as comparable ones in the inner city. It's impossible to save money by renting in a less attractive area. Normal cities have some sort of parity between cost-to-own and cost-to-rent, regardless of area. In Stockholm instead, this parity changes dramatically depending on your distance from the inner city! Another second-order effect from rent control is that having an attractive rental apartment in Stockholm suddenly has value. This makes people reluctant to let go of an apartment once they have it, which makes them reluctant to move away to pursue other opportunities elsewhere, even if that would be the better choice. Still, if you have one, you can rent it out on the second-hand rental market, so now you've created a class of rentiers, the people that have gone through the Soviet bread-queue can now cash in on that scarcity. But I thought rent control was about fairness?
henrikschroder 7y ago
Anecdotal, but: When I moved from Stockholm to SF and told my friends, the first question every single one of them asked was "But how will you find somewhere to live?" Because if you've only ever lived in Sweden and experienced its rent-controlled market, it's really hard to envision a different system, an actual free rent market, so all of my friends were really surprised that my answer was "I'm just gonna open craigslist and pick something."
- njepa 7y ago
  I don't disagree that the situation is bad. But you can just go on "blocket" and rent an apartment in a similar manner. Software developers are paid at least €3k after taxes, unless you are just out of school. For €1k to €2k you can rent an apartment. That isn't great, but it isn't extremely bad either. Unless you compare it to previous times in Sweden. In Sweden things are getting deregulated, income taxes are lowered and the social safety net is made less generous. The housing market is now mainly competitive. But for some reason people think they aren't the ones that are going to be affected, (partly because they aren't). If you don't have wealth or are willing to pay up your are a bit fucked, like myself. It is of course hard overstate how bad it is overall, especially for a smaller city. But the market itself isn't uniquely bad. It is mostly like everywhere else.
  - henrikschroder 7y ago
    > But you can just go on "blocket" and rent an apartment in a similar manner. Yes, but these are not rent-controlled apartments! These are second-hand apartments or houses that you rent from someone who either owns the place, or is already renting it from someone else. You are paying market rates for these, not rent-controlled rates. Deregulation that allows people to rent out homes they own or rent is what has allowed this market to grow in the past few years, this is the very opposite of rent control! I started this subthread to argue that rent control is shit, it has shit consequences, it has shit second-order consequences, it has shit third-order consequences. Maybe Stockholm isn't a shining example of how shit it is these days since deregulation and condo-conversions have effectively removed a lot of rent controlled stock, but that just proves my point!

by sgift 7y ago

henrikschroder 7y ago

I explicitly talked about how the job market is affected. If your only real options are to buy or to queue for a decade, that requires you to commit to a long-term plan if you want to move to Stockholm for work. This means you can't grab quick opportunities, you can't move to Stockholm on a whim to try your luck, so local companies and the local economy suffers. Fewer people move to Stockholm than who otherwise would, which means the city misses out on potential growth. It's an inefficient allocation of the work force on a national level. There might be some social good to artificially restricting the growth of your most important economical urban centers, but I highly doubt it. The supposed benefit of rent control is that attractive inner-city apartments are cheap. Sure. But since rents are based on utility value instead of location or attractiveness or market value, this means that unattractive apartments two hours from the inner city cost as much to rent as comparable ones in the inner city. It's impossible to save money by renting in a less attractive area. Normal cities have some sort of parity between cost-to-own and cost-to-rent, regardless of area. In Stockholm instead, this parity changes dramatically depending on your distance from the inner city! Another second-order effect from rent control is that having an attractive rental apartment in Stockholm suddenly has value. This makes people reluctant to let go of an apartment once they have it, which makes them reluctant to move away to pursue other opportunities elsewhere, even if that would be the better choice. Still, if you have one, you can rent it out on the second-hand rental market, so now you've created a class of rentiers, the people that have gone through the Soviet bread-queue can now cash in on that scarcity. But I thought rent control was about fairness?

henrikschroder 7y ago

Anecdotal, but: When I moved from Stockholm to SF and told my friends, the first question every single one of them asked was "But how will you find somewhere to live?" Because if you've only ever lived in Sweden and experienced its rent-controlled market, it's really hard to envision a different system, an actual free rent market, so all of my friends were really surprised that my answer was "I'm just gonna open craigslist and pick something."

njepa 7y ago
I don't disagree that the situation is bad. But you can just go on "blocket" and rent an apartment in a similar manner. Software developers are paid at least €3k after taxes, unless you are just out of school. For €1k to €2k you can rent an apartment. That isn't great, but it isn't extremely bad either. Unless you compare it to previous times in Sweden. In Sweden things are getting deregulated, income taxes are lowered and the social safety net is made less generous. The housing market is now mainly competitive. But for some reason people think they aren't the ones that are going to be affected, (partly because they aren't). If you don't have wealth or are willing to pay up your are a bit fucked, like myself. It is of course hard overstate how bad it is overall, especially for a smaller city. But the market itself isn't uniquely bad. It is mostly like everywhere else.
- henrikschroder 7y ago
  > But you can just go on "blocket" and rent an apartment in a similar manner. Yes, but these are not rent-controlled apartments! These are second-hand apartments or houses that you rent from someone who either owns the place, or is already renting it from someone else. You are paying market rates for these, not rent-controlled rates. Deregulation that allows people to rent out homes they own or rent is what has allowed this market to grow in the past few years, this is the very opposite of rent control! I started this subthread to argue that rent control is shit, it has shit consequences, it has shit second-order consequences, it has shit third-order consequences. Maybe Stockholm isn't a shining example of how shit it is these days since deregulation and condo-conversions have effectively removed a lot of rent controlled stock, but that just proves my point!