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Comment by jamesblonde | Hacker News Reader

One of the things that makes Stockholm a great city for workers is the large amount of rent-controlled housing. You can get one of these apartments by queuing - the longer you are in the queue, the better the choice you have. Now, obviously this supports insiders over outsiders. And there are problems with having to queue for 10 years just to get an apartment in a nice area - as soon as you turn 18, put yourself in the queue (it's only 50 bucks/year). But the net effect is that the percentage of your income that goes on housing is less than half of what it would be if you bought a house or your own condo. It means people can afford to also own a motor boat, a summer house, and have a high quality of life.

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Terrible example, Stockholm has one of the most dysfunctional rental markets on Earth.

In some parts of the city the wait time is closer to 20 years, and then you are essentially stuck on the scheme which can be wiped away with the stroke of a pen at any time.

All these people currently on rent control now sublet out for market rates and essentially have free government mandated incomes for being a rent-seeker

It's stifled all new property development and made housing some of the most affordable on Earth apart from a select few who are the minority.

Anyone with half a clue would not be waiting for a rent-controlled unit, it's a trap laced with uncertainty. Rent control has already brought down one government.

https://www.reuters.com/article/sweden-housing-idUSL5N2O51RM

Like i said, it favors insiders not outsiders.

I come from the anglo saxon perspective, so I can see the huge advantages for 100s of thousands of people in the city that are insiders and can have great quality of life.

If you remove the system, you have a grotesque transfer of wealth from workers to a rent-seeker class. Like 30% of people's disposable incomes, based on how it is in other countries.

There are also lots of fallacies above in your response. 1. you do not have to live in the nicest part of the city - you have no right, so the 20 year wait is for entitled people. 2. you are not allowed to sublet at market rates - you can be brought to "court" (ockerhyra) 3. the decision to make or not make more houses is a govt decision, it is not the fault of the housing cooperative or the system.

Is this satire? I can’t believe having to wait 10 years for an apartment is a good system

Simple, you pay through the nose the first 10 years to someone who already waited 10 years to snatch up something to sub-let out to you. Then you do the same thing to somebody else to get the money back.

That way you can pay the absolute highest rents when you're young and making the least amount of money.

When you're young you usually have very little income to afford the highest possible rents. It doesn't make sense to me.

You don’t have to, most people buy their apartment. If you don’t have the money when you’re young, parents tend to help out with the down payment. The more you get from your parents, the closer to the city center you can live.

I can see why this doesn’t work for everyone, and I wonder what kind of social effects it will have.

>parents tend to help out with the down payment. The more you get from your parents, the closer to the city center you can live.

Oh, so the "secret" to Swedish housing affordability is 'have rich parents'. Silly me, why didn't I know that sooner, I would have shopped around for richer parents. /s

>I wonder what kind of social effects it will have

The short term effect will be a much bigger class divide between those with rich parents and those without, basically a ghettoization of cities (which is already a thing in most EU cities), while long term maybe more social unrest, crime, political extremism, etc.

Could your average American aspire to living in central Manhattan? No, but you can in Stockholm, just wait longer in the queue. There is a parallel free-market system - but like in every attractive city in the world, it is expensive.

Not central Manhattan, but the average American could absolutely manage to live in NYC.

What do people do during the 10 years they have to wait in line?

They have to find another solution.

But instead of that lasting forever since their situation never becomes so that they can afford to buy a nice home, which is the case for many people, they only have to deal with that for 10 years at which point they get a lot of choices for nice homes at an affordable price.

It’s the same here in Denmark.

Gotta say, I feel bad for Europeans. In the states just about everyone can afford what you’d probably consider a “nice home” at an “affordable price”.

To put it into perspective; at 20 my friend bought a house in the suburbs — 3 bedroom, 2 bath, 0.3 acres; decent neighborhood, driveway for his 2 cars; etc. he’s not college educated and cuts trees down for a living.

Is that ignoring all the homeless people in the states, the people living in trailers, in their cars and so on while working multiple jobs?

On average Americans make an income of 2-4x their European counterparts (depending on industry). The houses in the US cost less, taxes are less and opportunities are greater.

You can look this all up.

While there are homeless and people in trailers, on average it’s because (a) they’re drug addicts who don’t want to live by their own rules (b) people living cheap, trying to get ahead or (c) Elderly, often inept, people who get trapped.

Trailer parks are particularly bad as they lock you into (effectively) renting. Outside of a few major(poorly run & corridor) cities, eg Chicago, SF, LA, NYC, etc the homeless rates are relatively low.

> at 20 my friend bought a house in the suburbs

Now try doing that in the Bay Area?

It's a bit funny to compare "Europeans" to some place in nowhere midwest and a friend that is almost certainly an outlier.

I'm sure you can find 20 year olds that can do the same somewhere in Europe.

If that were true, we wouldn’t be having a discussion about affordable housing. Or is this a non-US issue?

The US doesn’t have an affordable housing issue. A few cities do, primarily due to local regulations / restrictions.

It’s largely that people are interested in particular locations. Not everyone can afford homes in that location, it’s fact of life.

That said, there’s zero need to be homeless in the US. In Detroit you can get a home for free if you promise to repair it.

Be homeless or live in an overpriced non-rent-controlled apartment.

I'm surprised he managed to write how great housing in Stockholm is with a straight face as everyone knows how terrible this system is for those who can't get a rent controlled apartment.

Obviously this can work in your favor if you're a local and can get in the que when you turn 18 and hit the jackpot when you're 28 but not if you're a foreigner in your 20s or 30s trying to move to Stockholm.

I said it favors insiders over outsiders. That's the system the insiders vote for.

No, you said rent control makes Stockholm "a great city for workers".

You didn't say Swedish only workers.

By "workers", people on HN understand workers of all origins.

They sublet off people who have already artificially low price capped rentals.

Not trying to make a joke, that is the reality. Once you get off the waiting list it is essentially a guaranteed second income by subletting.

What if sweden government would make subletting illegal?

It is not allowed for the most part in rent-controlled housing. It is also illegal to charge more than the actual rent for subletting, even if you can sublet.

HN is over-represented by young people in tech, often immigrants (like me), who are "outsiders" in the Stockholm system. Hence, a lot of the complaints here. Stockholm also has a free-market system - go buy a condo or house. But you can't when you're a young - it's too expensive. Most people can't buy them when they are old either. But the queue means that you will get one. If you are in a rush, you get one in a less attractive neighborhood and then try and swap your way to a nicer place - there is a market for swapping rent controlled contracts (lagenhetsbyte.com).

Tired: work for a decade far from your job so you can earn enough money to afford an apartment close to your job

Wired: work for a decade far from your job so you can wait in a queue for an apartment close to your job

And people wonder why Europeans aren't having anymore kids.

So you join a queue, to rent and pay someone to live somewhere…?

That sounds, odd to me.

Most people buy homes because

(1) it financially makes sense (you can sell and profit off the asset, further often the interest is tax deductible- depending where you live)

(2) legacy. Owning a place let’s you pass it to children. Renting means the house goes to the next tenant

The people who often “win” in these situations are the land lords. They now have a queue of people (paying to be in the queue), probably near 100% occupancy, and will make small increases to rent every year or two.

A lot of people never buy a home. And to my knowledge the number of people who will never be able to afford to buy a home is only increasing.

So yes indeed, renting is not my preferred way of dealing with housing in our society, but it is the reality for a lot of people.

It depends where you live and if you’re willing to move.

A friend of mine couldn’t afford a house in SF, so he bought 3 elsewhere and the rent income paid for the mortgage on his 4th.

People can always move and make it work. I’ve seen the poorest people I know buy a few acres and quite literally camp as they build a house by hand.

The reality, is people want to rent. While it blows my mind, I agree it’s the reality (people increasingly renting).

However, in my opinion, it’s because they don’t have the drive to build wealth and be independent; self-reliant; etc.

That’s an overly simplistic and very rosy eyed take in my opinion.

I spent 9 years renting, paying 6-7k RMB for an apartment that was selling for 8 million RMB. Even though I didn’t build wealth through housing, I was able to save a lot because rents were cheap where I lived and I didn’t buy. This works in markets where rents are cheap and sale prices are high (most of China actually), you have to do the math, “buy at any cost” is not a good answer.

also

(3) not having to have to ask owner to do anything in the house

in most cases any changes you need to get permissions, some don't even allow pets.

(4) It just doesn't feel good to pay monthly to increase someone's else wealth, with no benefit to society or anyone else.

Singapore does this in a sense.

In order to qualify for new, heavily subsidized public housing (so called "Build to Order" - BTO) you need to be married and below the household income threshold (which is actually very high - $170,000 for a couple).

Well the problem is demand massively outstrips supply, especially in highly desirable developments.

So what do they do? They have a lottery. And because of the way Singapore lets you sell public housing at market rates after a period of time, it's a literal lottery - you can usually flip your unit for double after 5 years.

So what happens? Lotteries are massively oversubscribed. Sometimes 10 to 1. And people have every incentive to enter the lottery because it's cheap ($50) but the pay out is huge.

So as a result, plenty of young couple fail the lottery 3, 4, 5 times and then move to the resale market where prices are much higher.

So instead of allowing the market to allocate housing based on who is willing to pay (with the proceeds going to the government who can use the money for other things), the price is kept low and allocation is based on a lottery.

I'm not sure it's much better?

50 bucks a year? I pay ö 20 bucks? I guess you are in multiple queues.

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