7 ms·

The housing situation in Stockholm (and many other parts of the country) is pretty bleak. Buying an apartment is expensive, and problematic even for well payed

The housing situation in Stockholm (and many other parts of the country) is pretty bleak. Buying an apartment is expensive, and problematic even for well payed young people. In central Stockholm prices are around 1000 USD / sq feet (≈10000 EUR / sq meter), and you need a 15% down payment. For a 400 square feet single room apartment that's a down payment of a full years post-tax salary. If you manage to save 20% of it, then it'll take you five years. Until you can afford it, the best option is market-priced second hand contracts. Which work well enough, but are quite expensive and very insecure. The landlords often bought the apartments with the intention to live in them, so most contracts are semi-temporary. First hand rent-controlled contracts are extremely hard to get and basically not an option. The queues are decades long. There's often a 2-300% difference between second-hand (market) rates and first hand contracts, so once someone gets such a contract, they'll never move out. Of course the lower cost of rent-controlled apartments helps the inner-city be more diverse, allowing people with lower income living there. But there's also a large share of well-of people that have gotten their contracts via connections, or who have just been in the queue for a really long time. I really hope that the rent-controls are abolished in my lifetime, but there's a vocal large public option for them, so I'm not too sure...

nivenkos 5y ago
Would abolishing them really help though? I also rent second-hand and it sucks, but I don't think things will improve just by abolishing the controls on first-hand contracts. We just need to build far, far, far more. Especially with so much immigration.
- throwaway6734 5y ago
  Rent control decreases the incentive to build
  - nivenkos 5y ago
    I'm not a property developer, so I don't know how many flats they are forced to rent out as first-hand contracts when building new blocks. You can definitely buy apartments from new blocks though, and then you're just paying the normal market price. Second-hand contracts and commercial rentals also aren't covered by the rent controls, but I imagine the property developers can't rent them like that directly (only by selling them).
  - epistasis 5y ago
    How does it do that? Are the builders typically the same as the owners in Sweden? If so, I could see that being true. But if housing builders are different than the eventual owners, the have different economic interests, and rent control shouldn't limit housing production.
    - stonemetal12 5y ago
      Doesn't really matter who the owner is. If it costs 1 million to build a new apartment complex, and rent control means it will only return 500K in a reasonable time frame it doesn't get built. If it returns 1.5 million in a reasonable time frame it does. A builder isn't going to build it if no one will buy it, and no one will buy it if they lose money on the rent.
      - epistasis 5y ago
        Rent control doesn't apply to the price of new housing, at least for any the many many versions of rent control I've seen. Rent control only limits the increases on existing housing. The new building can charge whatever they want, they just can't depend on large increases in rent later on after their initial pricing. This same assumption, no huge rise in rents later, is also applied by financiers.
    - sokoloff 5y ago
      Housing is produced because there are buyers are willing to pay an amount $X that makes it attractive to build. Anything that reduces that value $X likely has a negative influence on marginal housing construction.
- filleokus 5y ago
  In my opinion we need both. Just building more won't help me. If I'm going to live in Stockholm (or any other large city really), I want to live in the city center. I want to walk or bike to the office, and have all the restaurants near by etc. It's very unlikely that the housing stock in the central parts of town will ever increase substantially. I'm willing (and honestly lucky enough to be able) to pay the premium for living downtown, if market rates were imposed. (There's an argument to be made about how abolished rent controls can increase interest by companies to build rental properties and get municipalities to issue building permits. Also that a non-negligible share of attractive rent-controlled housing is under-utilised, e.g people who don't live in them full-time but keep the contract because it's nice to have every once in a while). But yes, we definitely need a lot more housing overall. Cheap and close/with good connections to places where people work.
  - deleted 5y ago
    [deleted]
  - nivenkos 5y ago
    Fair enough. I just hope they never abolish the restrictions on second hand contracts. That has completely destroyed London, Barcelona, etc. - where your landlord might just be some investor in Zurich or New York. Also allowing for more remote work, so people can do more from smaller cities.
  - jrochkind1 5y ago
    It's of course expensive to live in the city center in most large European (or American) cities, this is not particular to Sweden. > I'm willing (and honestly lucky enough to be able) to pay the premium for living downtown, if market rates were imposed. I think this basically points out the trade-off. Right now, difficulty living in the city center of Stockholm or a large city is somewhat more evenly distributed compared to typical European countries, it unusually effects even the rich. Under a more strictly market approach the difficulty would be eliminated for the rich and increased for others. Whether that's a net win depends who you are, of course. > It's very unlikely that the housing stock in the central parts of town will ever increase substantially. So one way or another there are more people who want to live there than there is housing. How is it allocated? It can be allocated by a waiting list, in which you might have to wait 9 years. It can be allocated based on the market, in which those with more ability to pay get to live there. It can be allocated based on some combination of "personal network/nepotism" and "graft", in which leaseholders of rent-controlled apartments rent them out at profit to them, or at no profit to their family and those they know. Based on the article, the current system of course is a combination of all of those. Adjusting the portion of each of them would benefit some people and disadvantage others, depending on how adjusted.
- 1053r 5y ago
  Why isn't there more building? In most places that "need" rent control, it's because there are heavy restrictions on building. And rent control, all by itself, serves as a disincentive to build. Why should I invest in a new building when I can invest in something else that's less hassle, more liquid, etc.? Not to mention historical controls on building, rules about shading out other buildings, onerous permitting processes that take years, potential lawsuits, the annoyance of prostrating oneself before random bureaucrats begging for the ability to spend one's own money, etc. I think I'll just go YOLO into options futures instead, or throw my money in a global index fund. Each of these rules is well intentioned, or at least has a well intentioned sounding justification. (Often, the main force behind them is a monopolist who specializes in navigating them, and doesn't want to have to compete on an even footing in an open market.) Altogether, however, the rules make a sticky web that causes entrepreneurs to throw up their hands and go elsewhere. Rules about building is like dessert. A few desserts is a good idea. A meal constructed entirely of dessert is not so healthy, especially in the long run. Figure out how to make it easy to build, and people will build. And those folks need to be wooed, not with sweetheart deals out of the public purse, but with a clear, easy to navigate regulatory environment. If you make it easy to compete, there will be much competition. Overwhelmingly, though, there's no competition in these kinds of jurisdictions because powerful interests LIKE it that way. Think of those folks who spent EUR 10K on a square meter of condo. Are they going to be happy at your proposed regulatory reform that promises to quadruple the rate of building? Of course not! You are directly attacking their asset, that they strived and scrimped and worked for for years! Are they going to come out and say that? Only rarely. They are going to talk about the character of the neighborhood, or the historical significance of whatever, or the environmental impact of a skyscraper in the downtown, or make overtly racist comments about who might move into these new buildings, or anything that will rally people to their cause to STOP THAT BUILDING!
- jlokier 5y ago
  Is there really much immigration to Stockholm? According to https://www.macrotrends.net/countries/SWE/sweden/net-migration https://www.macrotrends.net/countries/SWE/sweden/net-migrati... net immigration to Sweden has been consistently dropping since ~2010, and at 0.3368% of the population per year, that doesn't sound like it would move the needle on housing.
- Too 5y ago
  Build more? Where? Stockholm center is just islands and all of it is already built, at least the areas where everybody wants to live. Same goes for most big cities. Unless you want a skyscraper metropole. If you want something cheap there are plenty of cheap apartments available in the suburbs.
vmception 5y ago
One thing to understand about Sweden is that mortgage rates are lower and mortgage terms are much longer, up to over 100 years. Sweden and a few other EU nations have their own Central Bank and can do distortions greater than the European Union Central Bank, while garnering even less publicity, let alone less local knowledge that these are strange actions.
- oolang 5y ago
  You are absolutely right. This is by far the main reason. Even more so as in Sweden you usually have two mortgages. One personal which is used to purchase the property and one taken out by the co-op itself which you pay as part of the monthly fee. On top of that you are also personally liable for mortgage debt.
rkangel 5y ago
I don't understand why the solution here isn't "ban subletting". The problem (based in my massive experience of reading one article) seems to be that there are a lot of rent-controlled apartments, but they end users aren't getting the benefit of that low rent controlled price. Instead some private citizens are getting to collect free profit for subletting. If you make subletting a rent-controlled property illegal, then the people who are living in them are unaffected, and the people who aren't living in them will have to give up their rent-control contract freeing up the property for others.
- blitzar 5y ago
  I am going to go out on a limb here and suggest that owner of rent controlled property 'lets' it to a connected party who then sublets it on for market rate. Bypassing the whole rent control. If they are going to have a rent control law, then allowing the person to sublet that on for a profit then you basically dont have rent control at all (except for the lucky / honest minority).
  - dimitrios1 5y ago
    Keep going... You are almost there to why regulations, however well intentioned, rarely work to their expectations versus the alternatives :)
    - blitzar 5y ago
      Regulations do often work, and work well. What doesnt work is what passes for regulation or legislation these days, written by some moron, that politicians attach to whatever bill or budget that is certain to pass. They barely reach the threshold of 'well intentioned' and would more charitably be described as vitue signaling or just spin. You get to stand infront of the microphone and parrot off the 'This is a Win for the voters' but rarely has anyone read, understood or debated what is now a binding law or regulation, along with its unintended and at times intended consequences.
      - 5y ago
mrkickling 5y ago
I think there is an ideological difference. I saw in another of your comments that you only want to live in the city center of Stockholm, and that you could pay a high rent for that. This could lead to a city where all the rich live in the city center and all the poor live far out in the suburbs (probably past the subway line), and travel into the city center to work. This is in my opinion not a good society (even for the rich, considering that segregation is expensive for a welfare society). My ideological conviction is that a less segregated city is better, and that both rich and poor should live in the city center. Having both rentals (at different rent levels) and owned apartments mixed is a good way to make this happen. What is your idea of how housing should look like in Stockholm?
- ecmascript 5y ago
  Norway, Denmark and Finland all have no rent control and at least in two of the three the bad places is close to the city center. In Stockholm, it's completely the reverse. I think rent control and where poor people live has nothing in common. It's impossible to get an apartment in the Stockholm city centre if you want to rent it. Especially when the cities lets immigrants cut the queue. Most wealthy people can afford the super expensive apartments and the medium wealthy can buy contracts illegally. All you're doing with rent control is to give incentiment for people to hold on to their contracts no matter what, cheat the system or buy/sell contracts illegally. It is really widespread and landlords are making a lot of tax free money on it. Even worse is the situation if you buy apartments, you cannot rent it out to whomever you want or for how long you want since you don't really own it. You only own a smaller piece in the economic foundation that owns all apartments and give you the right to live in it. They can require you to not rent it out or limit the timing to a couple of months increasing the instability of the second hand contracts. Also, if the economic foundation makes bad decisions and gets a bad economy they can be forced to sell the entire apartment complex and you'll loose the apartment to a presumably shitty price. The only good way of owning your housing in Sweden is to actually own the entire property OR own one of the new types of "äganderätter" which are very few and far between.
  - bjourne 5y ago
cromat3 5y ago
Only 5 years sounds too good to me. In Zagreb, average price per m2 is about 2000 eur, and average monthly salary (in Zagreb) is little bit more than 1000eur which ia about 12000 eur per year. If you manage to save 20% you can get small 30m2 apartment in 25 years but most people go with credit loans which makes full repayment even longer.
- filleokus 5y ago
  5 years to save up for the _15% down payment_ :-). Saving 20% of the post-tax salary will take you 30-something years to buy the apartment cash only.
  - oh_sigh 5y ago
    That doesn't sound too unreasonable, since people frequently get a 30 year mortgage and don't actually wait until they have a pile of cash to put on a house. At least, that's how it is in America, not sure about Croatia.
cloudfifty 5y ago
> I really hope that the rent-controls are abolished in my lifetime Well, of course you want that if you have a large salary and can pay the rents other people can't. Why not support government lead building of housing according to need instead of just throwing out the poor as a "solution"?
RandyRanderson 5y ago
Meanwhile in Vancouver: . 1120 CAD/sqft . median before tax household income (City of Vancouver) 72,585 CAD . ~30pc tax -> ~51k after tax . 400 sqft 1120= 448k. 15% = 62k for a 15pc downpayment for a 400sqft condo. Summary: In Vancouver the median household* would not be able to save 15% of a down payment for a 400 sqft "home" if they spent NOTHING for a year. We'll ignore the fact that housing appreciated for many years here at more than 10%/y. This is good for ppl like me b/c I own stuff and this situation forces ppl to work more for less money in jobs they hate. For folks starting out (incl new immigrants), it's terrible. The root cause is very high immigration. Sweden (and Canada) have very high rates which puts pressure on the low end of the job market and pushes up home prices. The US has a much lower rate (0.5%/y) than Canada (1.1%/y), which is likely one reason why homes are still somewhat affordable there.
- beambot 5y ago
  This plays out all over the place. Take San Mateo, California: * Median pre-tax household income: $103k * Post-Tax: $70k * Median home price: $1.6M (~$1200 USD per sqft) * 400 sqft: $480k (note: this is without the 20-30% premium you'd pay for smaller properties) * 15% downpayment: $72k Housing prices are broken all over the place...
  - RandyRanderson 5y ago
    Many would say that comparing San Mateo, arguably part of silicon valley (the center of the technology business world-wide), to Vancouver (we have no real industry unless you count tourism or money laundering[0]) is at best disingenuous. [0] https://complyadvantage.com/knowledgebase/vancouver-money-laundering-model https://complyadvantage.com/knowledgebase/vancouver-money-la...
    - BadInformatics 5y ago
      Vancouver may have "no industry" relative to SV, but it is a veritable black hole for tech on the west coast of Canada. The same rat race of high-skilled, well-paying jobs only being available in HCoL cities is just as much of an issue north of the border. The even smaller gap between compensation and CoL in Vancouver, Toronto, etc. just serves to make things more miserable.
timonoko 5y ago
When Helsinki had rent control, you always made a contract with some company, who then rented it to employees. Business-to-business rents were not controlled. Quite convenient actually, as every company had its own renting agent, and money was always guaranteed. When the rent control ended, renting turned into horrible shit-show. The register of good and bad customers was illegal and you could not easily check their financial status. And maximum security money was limited to 3 months. After few bad experiences I stopped renting out and just sold my apartment(s).

nivenkos 5y ago

Would abolishing them really help though? I also rent second-hand and it sucks, but I don't think things will improve just by abolishing the controls on first-hand contracts. We just need to build far, far, far more. Especially with so much immigration.

throwaway6734 5y ago
Rent control decreases the incentive to build
- nivenkos 5y ago
  I'm not a property developer, so I don't know how many flats they are forced to rent out as first-hand contracts when building new blocks. You can definitely buy apartments from new blocks though, and then you're just paying the normal market price. Second-hand contracts and commercial rentals also aren't covered by the rent controls, but I imagine the property developers can't rent them like that directly (only by selling them).
- epistasis 5y ago
  How does it do that? Are the builders typically the same as the owners in Sweden? If so, I could see that being true. But if housing builders are different than the eventual owners, the have different economic interests, and rent control shouldn't limit housing production.
  - stonemetal12 5y ago
    Doesn't really matter who the owner is. If it costs 1 million to build a new apartment complex, and rent control means it will only return 500K in a reasonable time frame it doesn't get built. If it returns 1.5 million in a reasonable time frame it does. A builder isn't going to build it if no one will buy it, and no one will buy it if they lose money on the rent.
    - epistasis 5y ago
      Rent control doesn't apply to the price of new housing, at least for any the many many versions of rent control I've seen. Rent control only limits the increases on existing housing. The new building can charge whatever they want, they just can't depend on large increases in rent later on after their initial pricing. This same assumption, no huge rise in rents later, is also applied by financiers.
  - sokoloff 5y ago
    Housing is produced because there are buyers are willing to pay an amount $X that makes it attractive to build. Anything that reduces that value $X likely has a negative influence on marginal housing construction.
filleokus 5y ago
In my opinion we need both. Just building more won't help me. If I'm going to live in Stockholm (or any other large city really), I want to live in the city center. I want to walk or bike to the office, and have all the restaurants near by etc. It's very unlikely that the housing stock in the central parts of town will ever increase substantially. I'm willing (and honestly lucky enough to be able) to pay the premium for living downtown, if market rates were imposed. (There's an argument to be made about how abolished rent controls can increase interest by companies to build rental properties and get municipalities to issue building permits. Also that a non-negligible share of attractive rent-controlled housing is under-utilised, e.g people who don't live in them full-time but keep the contract because it's nice to have every once in a while). But yes, we definitely need a lot more housing overall. Cheap and close/with good connections to places where people work.
- deleted 5y ago
  [deleted]
- nivenkos 5y ago
  Fair enough. I just hope they never abolish the restrictions on second hand contracts. That has completely destroyed London, Barcelona, etc. - where your landlord might just be some investor in Zurich or New York. Also allowing for more remote work, so people can do more from smaller cities.
- jrochkind1 5y ago
  It's of course expensive to live in the city center in most large European (or American) cities, this is not particular to Sweden. > I'm willing (and honestly lucky enough to be able) to pay the premium for living downtown, if market rates were imposed. I think this basically points out the trade-off. Right now, difficulty living in the city center of Stockholm or a large city is somewhat more evenly distributed compared to typical European countries, it unusually effects even the rich. Under a more strictly market approach the difficulty would be eliminated for the rich and increased for others. Whether that's a net win depends who you are, of course. > It's very unlikely that the housing stock in the central parts of town will ever increase substantially. So one way or another there are more people who want to live there than there is housing. How is it allocated? It can be allocated by a waiting list, in which you might have to wait 9 years. It can be allocated based on the market, in which those with more ability to pay get to live there. It can be allocated based on some combination of "personal network/nepotism" and "graft", in which leaseholders of rent-controlled apartments rent them out at profit to them, or at no profit to their family and those they know. Based on the article, the current system of course is a combination of all of those. Adjusting the portion of each of them would benefit some people and disadvantage others, depending on how adjusted.
1053r 5y ago
Why isn't there more building? In most places that "need" rent control, it's because there are heavy restrictions on building. And rent control, all by itself, serves as a disincentive to build. Why should I invest in a new building when I can invest in something else that's less hassle, more liquid, etc.? Not to mention historical controls on building, rules about shading out other buildings, onerous permitting processes that take years, potential lawsuits, the annoyance of prostrating oneself before random bureaucrats begging for the ability to spend one's own money, etc. I think I'll just go YOLO into options futures instead, or throw my money in a global index fund. Each of these rules is well intentioned, or at least has a well intentioned sounding justification. (Often, the main force behind them is a monopolist who specializes in navigating them, and doesn't want to have to compete on an even footing in an open market.) Altogether, however, the rules make a sticky web that causes entrepreneurs to throw up their hands and go elsewhere. Rules about building is like dessert. A few desserts is a good idea. A meal constructed entirely of dessert is not so healthy, especially in the long run. Figure out how to make it easy to build, and people will build. And those folks need to be wooed, not with sweetheart deals out of the public purse, but with a clear, easy to navigate regulatory environment. If you make it easy to compete, there will be much competition. Overwhelmingly, though, there's no competition in these kinds of jurisdictions because powerful interests LIKE it that way. Think of those folks who spent EUR 10K on a square meter of condo. Are they going to be happy at your proposed regulatory reform that promises to quadruple the rate of building? Of course not! You are directly attacking their asset, that they strived and scrimped and worked for for years! Are they going to come out and say that? Only rarely. They are going to talk about the character of the neighborhood, or the historical significance of whatever, or the environmental impact of a skyscraper in the downtown, or make overtly racist comments about who might move into these new buildings, or anything that will rally people to their cause to STOP THAT BUILDING!
jlokier 5y ago
Is there really much immigration to Stockholm? According to https://www.macrotrends.net/countries/SWE/sweden/net-migration https://www.macrotrends.net/countries/SWE/sweden/net-migrati... net immigration to Sweden has been consistently dropping since ~2010, and at 0.3368% of the population per year, that doesn't sound like it would move the needle on housing.
Too 5y ago
Build more? Where? Stockholm center is just islands and all of it is already built, at least the areas where everybody wants to live. Same goes for most big cities. Unless you want a skyscraper metropole. If you want something cheap there are plenty of cheap apartments available in the suburbs.

vmception 5y ago

One thing to understand about Sweden is that mortgage rates are lower and mortgage terms are much longer, up to over 100 years. Sweden and a few other EU nations have their own Central Bank and can do distortions greater than the European Union Central Bank, while garnering even less publicity, let alone less local knowledge that these are strange actions.

oolang 5y ago
You are absolutely right. This is by far the main reason. Even more so as in Sweden you usually have two mortgages. One personal which is used to purchase the property and one taken out by the co-op itself which you pay as part of the monthly fee. On top of that you are also personally liable for mortgage debt.

rkangel 5y ago

I don't understand why the solution here isn't "ban subletting". The problem (based in my massive experience of reading one article) seems to be that there are a lot of rent-controlled apartments, but they end users aren't getting the benefit of that low rent controlled price. Instead some private citizens are getting to collect free profit for subletting. If you make subletting a rent-controlled property illegal, then the people who are living in them are unaffected, and the people who aren't living in them will have to give up their rent-control contract freeing up the property for others.

blitzar 5y ago
I am going to go out on a limb here and suggest that owner of rent controlled property 'lets' it to a connected party who then sublets it on for market rate. Bypassing the whole rent control. If they are going to have a rent control law, then allowing the person to sublet that on for a profit then you basically dont have rent control at all (except for the lucky / honest minority).
- dimitrios1 5y ago
  Keep going... You are almost there to why regulations, however well intentioned, rarely work to their expectations versus the alternatives :)
  - blitzar 5y ago
    Regulations do often work, and work well. What doesnt work is what passes for regulation or legislation these days, written by some moron, that politicians attach to whatever bill or budget that is certain to pass. They barely reach the threshold of 'well intentioned' and would more charitably be described as vitue signaling or just spin. You get to stand infront of the microphone and parrot off the 'This is a Win for the voters' but rarely has anyone read, understood or debated what is now a binding law or regulation, along with its unintended and at times intended consequences.
    - 5y ago

mrkickling 5y ago

I think there is an ideological difference. I saw in another of your comments that you only want to live in the city center of Stockholm, and that you could pay a high rent for that. This could lead to a city where all the rich live in the city center and all the poor live far out in the suburbs (probably past the subway line), and travel into the city center to work. This is in my opinion not a good society (even for the rich, considering that segregation is expensive for a welfare society). My ideological conviction is that a less segregated city is better, and that both rich and poor should live in the city center. Having both rentals (at different rent levels) and owned apartments mixed is a good way to make this happen. What is your idea of how housing should look like in Stockholm?

ecmascript 5y ago
Norway, Denmark and Finland all have no rent control and at least in two of the three the bad places is close to the city center. In Stockholm, it's completely the reverse. I think rent control and where poor people live has nothing in common. It's impossible to get an apartment in the Stockholm city centre if you want to rent it. Especially when the cities lets immigrants cut the queue. Most wealthy people can afford the super expensive apartments and the medium wealthy can buy contracts illegally. All you're doing with rent control is to give incentiment for people to hold on to their contracts no matter what, cheat the system or buy/sell contracts illegally. It is really widespread and landlords are making a lot of tax free money on it. Even worse is the situation if you buy apartments, you cannot rent it out to whomever you want or for how long you want since you don't really own it. You only own a smaller piece in the economic foundation that owns all apartments and give you the right to live in it. They can require you to not rent it out or limit the timing to a couple of months increasing the instability of the second hand contracts. Also, if the economic foundation makes bad decisions and gets a bad economy they can be forced to sell the entire apartment complex and you'll loose the apartment to a presumably shitty price. The only good way of owning your housing in Sweden is to actually own the entire property OR own one of the new types of "äganderätter" which are very few and far between.
- bjourne 5y ago

cromat3 5y ago

Only 5 years sounds too good to me. In Zagreb, average price per m2 is about 2000 eur, and average monthly salary (in Zagreb) is little bit more than 1000eur which ia about 12000 eur per year. If you manage to save 20% you can get small 30m2 apartment in 25 years but most people go with credit loans which makes full repayment even longer.

filleokus 5y ago
5 years to save up for the _15% down payment_ :-). Saving 20% of the post-tax salary will take you 30-something years to buy the apartment cash only.
- oh_sigh 5y ago
  That doesn't sound too unreasonable, since people frequently get a 30 year mortgage and don't actually wait until they have a pile of cash to put on a house. At least, that's how it is in America, not sure about Croatia.

cloudfifty 5y ago

> I really hope that the rent-controls are abolished in my lifetime Well, of course you want that if you have a large salary and can pay the rents other people can't. Why not support government lead building of housing according to need instead of just throwing out the poor as a "solution"?

RandyRanderson 5y ago

Meanwhile in Vancouver: . 1120 CAD/sqft . median before tax household income (City of Vancouver) 72,585 CAD . ~30pc tax -> ~51k after tax . 400 sqft 1120= 448k. 15% = 62k for a 15pc downpayment for a 400sqft condo. Summary: In Vancouver the median household* would not be able to save 15% of a down payment for a 400 sqft "home" if they spent NOTHING for a year. We'll ignore the fact that housing appreciated for many years here at more than 10%/y. This is good for ppl like me b/c I own stuff and this situation forces ppl to work more for less money in jobs they hate. For folks starting out (incl new immigrants), it's terrible. The root cause is very high immigration. Sweden (and Canada) have very high rates which puts pressure on the low end of the job market and pushes up home prices. The US has a much lower rate (0.5%/y) than Canada (1.1%/y), which is likely one reason why homes are still somewhat affordable there.

beambot 5y ago
This plays out all over the place. Take San Mateo, California: * Median pre-tax household income: $103k * Post-Tax: $70k * Median home price: $1.6M (~$1200 USD per sqft) * 400 sqft: $480k (note: this is without the 20-30% premium you'd pay for smaller properties) * 15% downpayment: $72k Housing prices are broken all over the place...
- RandyRanderson 5y ago
  Many would say that comparing San Mateo, arguably part of silicon valley (the center of the technology business world-wide), to Vancouver (we have no real industry unless you count tourism or money laundering[0]) is at best disingenuous. [0] https://complyadvantage.com/knowledgebase/vancouver-money-laundering-model https://complyadvantage.com/knowledgebase/vancouver-money-la...
  - BadInformatics 5y ago
    Vancouver may have "no industry" relative to SV, but it is a veritable black hole for tech on the west coast of Canada. The same rat race of high-skilled, well-paying jobs only being available in HCoL cities is just as much of an issue north of the border. The even smaller gap between compensation and CoL in Vancouver, Toronto, etc. just serves to make things more miserable.

timonoko 5y ago

When Helsinki had rent control, you always made a contract with some company, who then rented it to employees. Business-to-business rents were not controlled. Quite convenient actually, as every company had its own renting agent, and money was always guaranteed. When the rent control ended, renting turned into horrible shit-show. The register of good and bad customers was illegal and you could not easily check their financial status. And maximum security money was limited to 3 months. After few bad experiences I stopped renting out and just sold my apartment(s).