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Comment by HPsquared | Hacker News Reader

What a surprise, the forces of supply and demand can't be overridden by wishful thinking. Perhaps building more housing might make it easier to find a place to live.

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On the other hand, the separate controls stopping people from renting out private flats for more than 2 years has helped to stop absentee landlords, and helped to keep prices reasonable up until recent years.

Property ownership should be restricted to resident citizens only, and rental to a government monopoly (like alcohol is here). We shouldn't pay 10x more just to serve as an investment vehicle for wealthy foreigners, AirBnB owners, etc.

> resident citizens only

What's your version of this definition?

Citizens of the country, who are also resident in the country.

You can get citizenship in Sweden in 5 years for example, so it isn't so extreme.

5 years + 3 years of queues + 1 year to a decision = 9 years. Unless you marry a citizen, that speeds up the process.

> by wishful thinking

What is the wishful thinking in this case? I see it as a deliberate tradeoff: you accept a black market and massive queues, for the idea of people with any background or income living in the city. You could allocate by lottery or by queue time or by market rates. The last one balances supply and demand, but it doesn't allow a city that has non-rich people living in central locations.

So the question is: do we want to balance supply and demand if the cost is a gentrified city core? And that's the tradeoff.

A much larger problem is the free, efficient movement of people and the matching of those people to opportunity. Proponents of rent control act as though the ability to stay in the old neighborhood for your entire life is an unqualified good, but most of us know from our own lives that it's not. You might want to move for a new job or a new relationship or for school or just because you're curious about living in a new city. Rent control ties you to one apartment while also reducing the supply of new units, which ensures you'll be tied to that one apartment for a long time, whether you like it or not.

It's easy to find examples of people who are thrilled that they were able to stay put, but what about all the people for whom that's a curse?

In the case of Stockholm, you can usually switch one rent-controlled apartment for another, so the mobility is around the same in rent-controlledd as it is in any other part of the housing market. Obviouly changing cities (thereby markets) doesn't work, but in the case of Stockholm other cities would't have the same problem so moving out would not put you at the back of a 10y queue.

Controlled rents isn’t a bad solution to the economic problem of optimal supply or demand. It’s one of several possible compromises on the ideological scale between “housing is a right and not a commodity and a mixed income city is a goal in itself” vs. “housing is a product like any other and optimal markets solves the problem best”.

The reason Stockholm seems very close to the first despite having one of the world’s most liberal market economies elsewhere is because it’s not easy to change. It’s likely to change but it will take a long time. The right wing parties in Sweden (market liberals) have worked around the problem by ensuring the apartments are converted from rentable to condos instead, because removing the rent control entirely would be too difficult. There is also talk about allowing market rents for new production (it’s already allowed in a limited way).

Except of course that if you read the article you'll notice that the main reason it does not work is because people abuse the system. The forces of supply and demand can be overridden, but then you have to enforce the rules and that is where things are derailing in this particular example. People subletting rent controlled apartments for profit or passing them on to relatives is the problem, not the rent control by itself.

The only reason drug prohibition doesn't work is because people abuse the system by dealing illegal drugs.

Which has absolutely nothing to do with this subject.

Although your tone is rude, I'll give you the benefit of the doubt.

> The forces of supply and demand can be overridden, but then you have to enforce the rules

Enforceability is a key factor in whether a law will work. "Proper" use of rent control, like narcotic use, is very difficult to enforce without extremely authoritarian measures.

You can no more override supply and demand than you can override the CAP theorem. If you don't have sufficient supply then demand responds either with shortages or high prices.

People are rationally responding to incentives that exist. It's hard to get a rent controlled apartment because there is more demand than supply. So people are incentivized to give them to family because otherwise it could take a decade to get them.

Of course you can: governments do this all the time. Tariffs, incentives, taxes, subsidies, laws.

People in this case are responding to the need by renting out rent controlled apartments for a very large premium to people who under normal conditions may not be eligible to live there in the first place. Same thing here in NL, with in the larger cities a healthy dollop of AirBNB tossed in for some extra artificial shortage.

If the last 20 years has taught us anything it is that it is not that simple. The price increase of new built houses and apartments has been record breaking, yet we don't build more houses than we did 20 years ago

And the houses that get built are lower quality.

We seem to have settled on the worst possible equilibrium in a lot places where housing prices are market rate but also we have a huge tangled thicket of regulatory processes which severely limit the amount of new housing we can build.

Reminds me of the Pratchett / Discworld song "wouldn't it be nice, if everyone was nice?":

https://www.lspace.org/fandom/songs/wouldnt-it-be-nice-if-ev...

(sung to the tune of "It's a Small World")

If we all were friendly

I'm sure you would agree

That the world would be a better place

For you and for me

And if everyone was kind

I'm sure no-one would mind

So let's all be nice

Chorus:

Wouldn't it be nice if everyone was nice?

Let's all be nice.

Being good to people

Is lots of fun

And it makes a difference

To everyone

And a smile is a frown

When it's turned upside down

So let's all be nice.

Repeat chorus ad nauseam.

(Warning: Tangential rant.)

Yes, we should all be nice to everyone. Except to people who are not nice. Those are the outgroup. We, the nice people, are nice, because we are not those not-nice people. You should avoid those not-nice people. Do not associate with them. Shun them. Exclude them from your life. Block them. Refuse them service. Take all possible actions to make sure not-nice people are excluded and removed. Make sure all the nice people knows who the not-nice people are, so that all the nice people can avoid the not-nice people. Learn the signs of not-nice people. The subtle flags and secret signals, the words they use. Learn to never use those words, lest someone mistake you for a not-nice person. Call out loudly every time you see or hear someone use those words, for they must surely be a not-nice person! The not-nice people are always trying to sneak their way into your life, so you must be on constant lookout for all suspicious flags and signals. Call out loudly every time you discover a not-nice person, so that every nice person can be alerted, and take proper action.

Remember, we must all do our part in being nice!

No, people in Stockholm (generally) are not interested in buying newly constructed housing. People want to move into already established neighborhoods and especially turn of the century style housing in central Stockholm, which exacerbates the issue. If "jUsT bUiLd mOrE" would solve all our problems we wouldn't have this mess.

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