In Stockholm, decades of rent regulation has created a massive undersupply of housing. That means there is a 9-year wait list for apartments. The way rent regulation usually works is it caps rent increases for a given tenant. Tenants thus never leave their apartments, so the prices for the few openings (and newly built apartments) is astronomical.

> Another legacy of Sweden's post-war efforts to develop a more equal society — known as "Folkhemmet" or "the people's home" — is rent regulation, which applies to both municipal and privately owned properties. While millions of Swedes have benefited from the highly affordable rent levels set since the 1960s, the caps have had a damaging effect on the provision of new housing.

> Historically, the low returns from rents for private landlords have made the investment case for building new rental properties difficult to justify, the Swedish bank analyst said.

> The love for rent-capped municipal properties among the Swedish people is strong. Almost 500,000 people were on Stockholm's waiting list for public housing, according to figures released in 2015, double the number from seven years prior. In 2014, the average waiting time to get an apartment in Stockholm was 9 years. Once a person is given an apartment, they often stay there for life. "People are sitting in 300 square-meter apartments because they are so cheap that they can't leave them," said Pelles.

The government made sure that there was enough supply of apartments. This was removed 30 years ago or so. The "Market" took over instead.

In the US, cities frequently have "zoning requirements" so it's very difficult to get a new high-density structure built in a neighborhood of 1-floor single family homes. Also, NIMBY groups usually have a veto vote of sorts, which makes it more expensive for a real estate developer to come into a pre-existing neighborhood and make more units (because it's a gamble and usually they have to spend more to acquiesce to the NIMBY if they are able to build at all).

Even when there is a rental price cap, that tends to only work in the short term and exacerbates supply/demand problems long term. San Francisco, for example, implemented a rent control system in ~1980. Since then, only 40% of rental units are eligible for rent control and lots of potential rentals stay off the rental market. There are loopholes which allow conversion of a rent-controlled unit to a market-priced rental and no new built units are rent controlled, so there is a bifurcation of the market. Rent controlled units are very affordable, but increasingly scarce. Market priced units are growing (slowly) in numbers, but cost 2x - 5x what a comparable rent-controlled unit does.

True, there are real supply issues in some very hot markets, but few markets are like San Francisco.

So--why do you say that the price cap is what exacerbates the supply/demand problems long term, when you clearly understand the issue is that there are loopholes being utilized to reclassify units to get the back to market price? Those loop holes aren't accidents--the NIMBY groups put them there intentionally. But they aren't just NIMBY--they are also private investors who do not even live there.

I'm all for building additional housing to meet demand in general. However, it does need to be done carefully. By that I mean, upgrading train stations, roads, grocery options, etc. in order to deal with the increase in population. You can't just add 15,000 people to a neighborhood and not add parking or public transit capacity.

That's exactly why suburbs in Silicon Valley are stressing the large cities and the cities are suing each other to ensure they alleviate traffic congestion as they grow the residential units.

Those who live in the burbs and commute into the cities don't want city dwellers to be able to make the reverse commute to come to their neighborhoods. In the 1960s, the Bay Area Rapid Transit (a light rail system) was designed to be a loop between San Francisco, Oakland and the South Bay. The NIMBYs rejected plans to close the loop in the South Bay, so it became much less valuable at reducing street traffic as it otherwise could have.

As if there isn't enough money in San Francisco to build roads and trains! The city governments certainly don't have it, but it's there.

I'll admit that the assumptions I make about rent control assume that the policy is far from well crafted and probably assume that it gets worse over time because US policy makers tend to get worse at upkeeping existing systems the longer they last.

These assumptions probably shouldn't be attributed to a perfect rent control policy.

I knew people who moved from Stockholm to Berlin and kept on paying their rent in Stockholm, just so they don't lose their apartment. That's how hard it is to get one.

Berlin also had a rent cap, so instead of competing on price, you had to compete on intangibles like: letters of recommendation from previous landlords, proof of income and good conduct, having a high-profile job, nationality, etc.

Since supply is low, demand is sky-high and prices are capped, you had 30-40 people applying for the same apartment. Add the fact that once a landlord takes you in, there is almost no way that they can kick you out and you will end up with a very complicated and long vetting process that doesn't exactly favor the working class folks.

Also, you can end up with other costly requirements like: the landlord will only choose a tenant who buys all the furniture in the house. That's one example of an unregulated cost increase that is not affected by the rent cap.

However, it doesn't justify the runaway inflation of the entire housing market. Also, I'd point out that generally speaking, the population of an area will be limited by the jobs available in that area, so there is an external limit on the demand for housing to at least some extent. There are jobs and money to be made in development of additional housing to meet the demand. Supply issues are not insurmountable, and should be addressed as such.

I'll also note that in the USA, all of the "intangibles" you listed are already typically collected by the landlord along with the leasing application itself. This isn't a result of rent caps, just high demand and standard tenant screening practices.

To solve problems, you may actually have to try. Obstacles don't justify problems, they just need to be addressed.

For me, it’s the definition of a minimum place to live. When I was young, I had roommates. I don’t think every working person should be able to afford a 1 bedroom apartment.

There are multi family dwellings, studios, boarding rooms, etc. If I’m by myself and making minimum wage then I think it’s ok to not be able to get my own one to two bedroom in the city of my choosing. I’m ok with having to live in the burbs and train or drive in. It sucks, but there’s no reason why minimum wage is a permanent condition.

Not everyone working minimum wage is doing it "when they were young." Do you really think it's a good objective for a 55 year old cook for a non-profit organization to be living with room mates? Would you want that?

The solution is there if you are willing to reduce the wealth generated by investment properties for an already much wealthier investment class. How do you justify your priorities ethically?

Do you think the world works according to ethical priorities or market forces? Imagine if engineers could use similar logic as political theorists. We could will our airplanes to fly by setting the right priorities!

You make a quip about engineers and political theorists, but fail to explain why a market cannot be regulated in order to benefit society in general. We do it all the time.

The difference between those two views of the world is the difference between political theorists and engineers. A political theorist asks questions like "how do you justify your priorities?" An engineer asks "how much do I have to give up on this one priority in order to achieve this other priority?" Engineers deal with a world where achieving every priority means giving up some other priority.

Applying this logic to your statement exposes the flow: "The solution is there if you are willing to reduce the wealth generated by investment properties for an already much wealthier investment class."

Sure, things like price control prioritize affordability at the expense of "wealth generated by investment properties." If that was it nobody would argue against price control. So why do so many people oppose price controls? (The answer is not, I'm sorry to say, that many people simply want owners of investment properties to be rich.) See: https://www.brookings.edu/research/what-does-economic-eviden...

> Rent control appears to help affordability in the short run for current tenants, but in the long-run decreases affordability, fuels gentrification, and creates negative externalities on the surrounding neighborhood. These results highlight that forcing landlords to provide insurance to tenants against rent increases can ultimately be counterproductive.

This, like many others, does not sound like a job that warrants minimum wage so no.

If the recommended rent is 30% of your income... well, the most you could afford on twice minimum wage is $768.

Where I'm at the cheapest rentals are 900 or so (rural utah).

Seems to me it takes almost 3x minimum wage just to really be able to live comfortably, and many will never get to that level, because they already work 2-3 jobs just to keep a roof over the heads of their children.

There's a reason that $75k is the 'happiness level', it really is the lowest of the low wages that will make someone feel like they're not poor and 'needy' and over-worked, etc... That should be our goal, to get us to that level for everyone over 25 who isn't in school. (Or able to reach that w/ a full-time job (even at McDonalds) + GBI/UBI)

Of course 55 year old me doesn’t want roommates, but if I have to do it for a few years then I will.

So you always have rent covered, regardless of your paycheck. They could maybe double that, and have it cover food stamps too, to cut out some of the administrative costs to manage both programs.

This works for married couples too, because you'd get double that, which is closer to what a mortgage would be, and would esp, help lower income families.

I think we could look into a VAT if needed for supplmental tax to cover it, but there's plenty of governmental spending we could also cut like maybe 1/3rd of the defense budget for one.

This site shows $1700 for a 2br in brooklyn.

https://www.apartments.com/brooklyn-ny/2-bedrooms/?so=2

Seems to me the problem is a supply issue, and we just need a bigger supply. That's an easy solve.

Those days are long gone and aren't coming back. So there needs to be some other contract that can guarantee a home for everybody.