I heard finding housing in stockholm is very hard. How do policies like this play in practice? Is it like how some US states pay you to move there except it's really nowhere near enough to be considered a livable income?
With this system you have to stand in line for at least 20 years to get a decent rental apartment in inner-city Stockholm. As you can probably guess, this system doesn't exactly encourage free movement. And it's created a huge black market, plus that it's pushing everyone into buying.
* We have massive tax cuts and subsidies for home owners. You get to make deductions off your interest rate payments, something that was introduced as an emergency measure in the 90s. We also have effectively no real estate tax, meaning there is no incentive to move out when your kids have moved out and the home is more than you need.
* For a long time, there was no need to even pay the principal of your mortgage. Now there is and it's one of the primary reasons the prices have gone sideways in Sweden for the past year.
* The local governments don't want renters and have gradually been given more and more power to get rid of them. They own a lot of the rentals and especially in Stockholm they have aggresively converted them into apartments that are owned (the common, Swedish system of buying a membership into a home owners organization is a bit hard to translate into an appropriate English term, but it's called "bostadsrätt"). The national government is basically powerless to increase the housing stock, if you go back to the 60s when my grandparents were facing a housing crisis the national government had the power to build one million homes mostly in the bigger cities like Stockholm, Gothenburg and Malmö. They have nowhere close to that power anymore and the local governments have no incentive to solve the problems of low income people in a completely different city who would like to switch cities to get a decent living.
There are more than these too, these are just the first ones that popped into my head.
And all of this is unfortunately hard to change because most Swedes live in homes they own and it's a very common retirement plan. People who are in their 30s, like me, also think that falling interest rates well below inflation is the new normal because they've known anything else throughout their adult lives and thus take larger risks than they should.
Let's use rent control as an example. The government is setting an upper bound to prices. The limit may not be high enough to justify building more units. Therefore there is a perverse incentive for the government to enact a bad policy because it is shielded from the outcomes but gains public support because visible indicators (like average rent price) look normal again.
There would be a simple way to make this system not horribly broken. When someone wants an apartment and wants to pay the regulated price the government should be responsible for building that regulated unit or subsidizing the difference between the regulated price and the market price. This aligns incentives because now the government is on the hook for actually solving the problem and if it fails to do so it will be financially punished because setting an artificially low market price will cause the government to lose money.
In Germany there are city owned housing associations that are responsible for providing low cost housing. This system works very well but I think cities like Berlin are not utilizing it correctly. They just want a quick political band aid and make the problem worse by avoiding responsibility.
I admit that I pulled the 20 years stats out of a hat. I quickly looked for some stats, and this page suggests around 10 years average for the private market, and 13 years for the communal: https://www.stockholmdirekt.se/nyheter/sa-lange-maste-du-koa...
An article on the current situation: https://www.theguardian.com/world/2015/aug/19/why-stockholm-...