Economics

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Maximum prices - Why rent control isn’t working in Sweden

Graham Watson

27th August 2021

This is the sort of really interesting article that Economics teachers love - a classic example of why rent ceilings don't work.

Despite the view of Sweden as some sort of statist utopia, rent controls in Sweden have result in lengthy waiting lists to get accommodation and, as theory would suggest, fairly typical ways of circumventing the list - notably sub-letting.

In Stockholm, the average waiting time for a rent-controlled property is 9 years, up from 5 years a decade ago. This wait-time doubles in the most attractive inner-city neighbourhoods.

However, for all its flaws some Swedes think that they're not so badly off - the number of Swedish households spending more than 40% of their income on housing is lower than in the UK, and their housing stock is, arguably, of better quality.

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