5 ms·

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

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.
    - dimitrios1 5y ago
      Regulations can often work well initially. But inevitably, there exists a timeline where the regulation becomes antiquated and outdated. It no longer serves its purpose, and it actually becomes the very barrier to progress. And in my time being alive, I've rarely seen politicians act quickly to improve regulations to serve a current need. More often than not, they grandstand over the value of the regulation, and pass laws that increase the bureaucratic reach of the regulatory arm. They effectively become rubber stamping desks.
  - deleted 5y ago
    [deleted]
filleokus 5y ago
We basically have two main way of living in apartments. Rent-controlled first-hand contracts, and bought apartments. Rent-controlled apartments can be sublet legally with almost no markup. Bought apartments can be sublet legally to a market rate [0]. I'm guessing that the guy in the article is in a sublet owned apartment. Regardless, sub-letting of rent-controlled apartments is very strictly controlled and is essentially "banned". But of course it's quite tricky/expensive to enforce. (My, in Sweden very unpopular, opinion is that subletting is the last thing that gives young people some kind of chance to mobility. Especially those whose's parents can't buy them an apartment. If all forms of subletting were banned, I would have had no chance to live in Stockholm).
- oolang 5y ago
  I don't think that is an unpopular opinion. On the contrary it's been the going one for quite a while. Deregulating letting was said to be part the solution when it was introduced. Now it is said to be part of the problem to have even more deregulation. A more unpopular opinion is that we actually shouldn't try to improve the situation. The reality is that Stockholm geographically challenged. The major pieces of available land is the city airport and areas of parkland. The city airport has been given a lease until 2040. The areas of parkland is a national park. The housing market is one the most important markets in Sweden. Anything that significantly lowers the value of real estate will be political suicide. Meaning that in the current market there can't be any solution that actually delivers affordable housing. There is also little will from the voters to accept measure that would stabilize the market long terms like removing the mortgage interest deduction, introduce an actual real estate tax or regulating lending similar to other countries. All this means that it's very unlikely that there will ever be even a relatively affordable market in Stockholm. Which will end up being disastrous when the cost of rent is also among the biggest single cost in the knowledge economy. For companies you can argue that the increase in housing cost will be offset by the larger available workforce but you can't say the same for public services. Past or future deregulation isn't going to solve this. On the contrary it is what prevents a correction. The natural thing to do when something becomes too expensive is look for alternatives. In the housing market this means moving somewhere else. But as companies can attract those good or privileged enough to Stockholm anyways they don't have to move. So the average person doesn't have much of a choice but to move there themselves. Which in turn makes Stockholm even more attractive. The paradox is that most any improvement of the Stockholm housing market will there make the situation worse long term. So the solution has to be not to cater for this market but to improve the market somewhere else instead. Unfortunately this also unlikely.
fallingknife 5y ago
But how do you enforce? Neither the tenant, who is getting below market rent, nor the landlord (obviously) have any incentive to report.
- rkangel 5y ago
  A potential tenant has some incentive. If there was a public record of which properties were rent controlled, as a tenant looking for property and I ran into one I thought was sublet, I could compare it with the list and report it. Basically it would become hard to advertise them because it would be easy to check. TBH, you could make it illegal to advertise property that was being sublet and put the onus on Zoopla/RightMove/whoever to do a quick API check for an address. You're right that if it was the cheapest way of getting property then tenants probably wouldn't report. But if the whole thing is making property more expensive then I definitely would. Recently on Reddit there were some screenshots of a ground-floor 'studio' flat that was entered through a window. It didn't have a door and was still quite expensive. That's illegal according to UK rules, and lots of people on Reddit happily reported it.
  - kbelder 5y ago
    I'm sure they did. Thanks, Reddit strangers! One less apartment available to rent, but at least several internet users have more smug satisfaction.
    - rkangel 5y ago
      The rules exist for a reason. The reason in this case is to prevent people dying in a fire. "But we're really short of flats in London" is not a good excuse for allowing landlords to risk the lives of their tenants to make a buck.
      - kbelder 5y ago
        Oh, I wouldn't have a problem with a tenant reporting the crimes of a slumlord. I just really hate Reddit crowds of do-gooders who brigade over a picture and a blurb.
hedwall 5y ago
It already is illegal to make a profit by sub letting a rent controlled apartment in Sweden.
imtringued 5y ago
Why is the problem that people are willing to market rate?
- int_19h 5y ago
  Because they didn't get it for market rate.
3np 5y ago
It’s already forbidden to sublet rentals at any significant markup (basically accounting for eg furnishing added by the middleman). If anything there’s lack of enforcement of existing regulation.

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.
  - dimitrios1 5y ago
    Regulations can often work well initially. But inevitably, there exists a timeline where the regulation becomes antiquated and outdated. It no longer serves its purpose, and it actually becomes the very barrier to progress. And in my time being alive, I've rarely seen politicians act quickly to improve regulations to serve a current need. More often than not, they grandstand over the value of the regulation, and pass laws that increase the bureaucratic reach of the regulatory arm. They effectively become rubber stamping desks.
- deleted 5y ago
  [deleted]

filleokus 5y ago

We basically have two main way of living in apartments. Rent-controlled first-hand contracts, and bought apartments. Rent-controlled apartments can be sublet legally with almost no markup. Bought apartments can be sublet legally to a market rate [0]. I'm guessing that the guy in the article is in a sublet owned apartment. Regardless, sub-letting of rent-controlled apartments is very strictly controlled and is essentially "banned". But of course it's quite tricky/expensive to enforce. (My, in Sweden very unpopular, opinion is that subletting is the last thing that gives young people some kind of chance to mobility. Especially those whose's parents can't buy them an apartment. If all forms of subletting were banned, I would have had no chance to live in Stockholm).

oolang 5y ago
I don't think that is an unpopular opinion. On the contrary it's been the going one for quite a while. Deregulating letting was said to be part the solution when it was introduced. Now it is said to be part of the problem to have even more deregulation. A more unpopular opinion is that we actually shouldn't try to improve the situation. The reality is that Stockholm geographically challenged. The major pieces of available land is the city airport and areas of parkland. The city airport has been given a lease until 2040. The areas of parkland is a national park. The housing market is one the most important markets in Sweden. Anything that significantly lowers the value of real estate will be political suicide. Meaning that in the current market there can't be any solution that actually delivers affordable housing. There is also little will from the voters to accept measure that would stabilize the market long terms like removing the mortgage interest deduction, introduce an actual real estate tax or regulating lending similar to other countries. All this means that it's very unlikely that there will ever be even a relatively affordable market in Stockholm. Which will end up being disastrous when the cost of rent is also among the biggest single cost in the knowledge economy. For companies you can argue that the increase in housing cost will be offset by the larger available workforce but you can't say the same for public services. Past or future deregulation isn't going to solve this. On the contrary it is what prevents a correction. The natural thing to do when something becomes too expensive is look for alternatives. In the housing market this means moving somewhere else. But as companies can attract those good or privileged enough to Stockholm anyways they don't have to move. So the average person doesn't have much of a choice but to move there themselves. Which in turn makes Stockholm even more attractive. The paradox is that most any improvement of the Stockholm housing market will there make the situation worse long term. So the solution has to be not to cater for this market but to improve the market somewhere else instead. Unfortunately this also unlikely.

fallingknife 5y ago

But how do you enforce? Neither the tenant, who is getting below market rent, nor the landlord (obviously) have any incentive to report.

rkangel 5y ago
A potential tenant has some incentive. If there was a public record of which properties were rent controlled, as a tenant looking for property and I ran into one I thought was sublet, I could compare it with the list and report it. Basically it would become hard to advertise them because it would be easy to check. TBH, you could make it illegal to advertise property that was being sublet and put the onus on Zoopla/RightMove/whoever to do a quick API check for an address. You're right that if it was the cheapest way of getting property then tenants probably wouldn't report. But if the whole thing is making property more expensive then I definitely would. Recently on Reddit there were some screenshots of a ground-floor 'studio' flat that was entered through a window. It didn't have a door and was still quite expensive. That's illegal according to UK rules, and lots of people on Reddit happily reported it.
- kbelder 5y ago
  I'm sure they did. Thanks, Reddit strangers! One less apartment available to rent, but at least several internet users have more smug satisfaction.
  - rkangel 5y ago
    The rules exist for a reason. The reason in this case is to prevent people dying in a fire. "But we're really short of flats in London" is not a good excuse for allowing landlords to risk the lives of their tenants to make a buck.
    - kbelder 5y ago
      Oh, I wouldn't have a problem with a tenant reporting the crimes of a slumlord. I just really hate Reddit crowds of do-gooders who brigade over a picture and a blurb.

hedwall 5y ago

It already is illegal to make a profit by sub letting a rent controlled apartment in Sweden.

imtringued 5y ago

Why is the problem that people are willing to market rate?

int_19h 5y ago
Because they didn't get it for market rate.

3np 5y ago

It’s already forbidden to sublet rentals at any significant markup (basically accounting for eg furnishing added by the middleman). If anything there’s lack of enforcement of existing regulation.