When you're really not feeling well or if you're in pain. Getting medical treatment without delay is what matters to you. At Matter private network in Dublin, our emergency department is open Monday to Saturday, 08:00 a.m. to 07:00 if renting out their apartments is no longer very profitable, now they may decide, oh, maybe it's worthwhile to convert to condos and sell off the apartments to owner occupants, and that would be a way to recover some of this lost income. Or another thing they could do is, say, knock down their old building and build some new construction and either sell those as condos or rent them out as apartments. Both of those options would avoid them having to pay this tax of rent control, help recoup some of their losses, which is good for the landlords, but is going to undermine the goals of rent control, because now we're going to have less rental housing out there available for rent control.So you can start to see how rent control may be accomplishing a narrow short term goal, making existing housing more affordable for a select group of people at the expense of the long term goal of making a city more affordable.Generally, when you pass rent control, the landlords of the property suddenly getting covered by rent control are losing so much money, they no longer really want to rent their apartments out at the prevailing new prices, so they decrease their supply of rental housing to the market. And if there's less supply, that's going to drive up prices.Okay, so let me just make sure I have it pretty straight. You find evidence that rent control increases gentrification, one component of which is the displacement of low income tenants. On the other hand, you also find evidence that low income people, including minorities, at least those who are in rent control units already, they're likely to disproportionately benefit from rent control. So if I'm an affordable housing advocate, I might say, oh, fine, fancy Stanford professor who I'm sure has some kind of great income and or housing subsidy and or situation. I don't care that some landlords are suffering. I don't care that the policy is having some downstream effects that you don't like. I need to make sure that low income people aren't going to get a rent increase of 50% overnight. So how do you respond to that argument?So when you think about those initial tenants, that's the best bet you're going to get for the benefits of rent control to low income tenants, the people that are already in the housing. But even though we find that those tenants are much more likely to stay in their apartment, when we look 1015 years later, the share of those 1994 residents that are still there is down to 10% or so. So 90% of them no longer live in that initial apartment. And it's that nextkeep the rents low. The rents cannot be increased by too much.If you've been listening closely, it may not surprise you to learn that this system has led to a housing shortage.Because people will not invest in new buildings unless they can get good returns. So if you look at this report written by this national Board of Housing Building and Planning from 2016, they estimated that Sweden needs around 440,000 new homes before 2020.This shortage is what can lead to long lines to get an apartment, especially in the more desirable places. How long do you have to wait in Stockholm?You have to wait for ten or 20 or even 30 years to get an apartment right now, if you would sign up today, what if you don't.Want to wait ten or 20 or 30 years for an apartment?So there are no official figures because it's a black market. But it's clear that there exists a black market. You can get an apartment in several different ways. So one of them is essentially to buy a contract with black money. You can also bribe someone in charge of allocating available apartments to get a better position in the queue. And another thing which is kind of popular is these fake swaps. You are allowed by law to swap apartments with other persons, so you're just pretending that you're swapping apartments, but essentially you are not in the old days, what I've heard, and I must stress that I don't have any scientific evidence on this, but apparently black contract used to cost around 10% of the market value, but in recent years, it has actually grown to, say, 20% of the market value of the apartment. So it's kind of expensive to. To buy a black contract. And, you know, it's always a risk to be involved in this business because even if you pay the money, it's not clear that you will get the apartment simply because, I mean, there are criminal gangs involved in this as well.That does not sound like what the designers of the swedish rental system were going for. But the housing market in Stockholm is so bad that even business leaders there have risen up in protest.The CEO and the founder of Spotify, in 2016, he wrote an open letter to the people of Sweden saying that unless you know you sold this housing situation in Stockholm, Spotify may consider moving its headquarters out of Stockholm simply because we cannot find housing for our future employees.If policymakers can't figure out smarter ways to encourage more affordable housing, you can expect to see this kind of scenario playing out in cities all over the world. What's your experience with rent control or your opinion? Let us know. Our email is radio freakonomics.com. also, please spread the word about our show. That is the best way to support it. You can also leave a rating or review on your podcast app. Thanks for that. We will be back very soon with another new episode of Free Economics Radio. Until then, take care of yourself, and if you can, someone else too. Free economics Radio is produced by Stitcher and Renbud Radio. You can find our entire archive on any podcast app also@freekonomics.com. where we publish transcripts and show notes this episode was produced by Zach Lipinski. Our staff also includes Alina Cullman, Augusta Chapman, Dalvin Abu Aji, Eleanor Osborne, Elsa Hernandez, Gabriel Roth, Greg Ripon, Jasmine Klinger, Jeremy Johnston, John Schnarz, Julie Kanfer, Leorik Bowditch, Morgan Levitte, Neil Carruth, Rebecca Lee Douglas, Sarah Lilly and Teo Jacobs. Our theme song is mister fortune by the hitchhikers. Our composer is Luis Guerra. As always, thanks for listening. How's things?Great. Yeah, things are nice. Got some rain here in California.Good. Congratulations. That's important, I guess. Yeah.The freakonomics radio network the hidden side of everything.Stitcher.When you're really not feeling well or if you're in pain, getting medical treatment without delay is what matters to you. At Matter private network in Dublin, our emergency department is open Monday to Saturday, 08:00 a.m. to 07:00 p.m. you can quickly access expert medical care from our consultant led team and no appointment is necessary. See Matterprivate, ie for details on getting the emergency care you need as soon as possible. Matter private network emergency department Dublin over 16s only.

if renting out their apartments is no longer very profitable, now they may decide, oh, maybe it's worthwhile to convert to condos and sell off the apartments to owner occupants, and that would be a way to recover some of this lost income. Or another thing they could do is, say, knock down their old building and build some new construction and either sell those as condos or rent them out as apartments. Both of those options would avoid them having to pay this tax of rent control, help recoup some of their losses, which is good for the landlords, but is going to undermine the goals of rent control, because now we're going to have less rental housing out there available for rent control.

So you can start to see how rent control may be accomplishing a narrow short term goal, making existing housing more affordable for a select group of people at the expense of the long term goal of making a city more affordable.

Generally, when you pass rent control, the landlords of the property suddenly getting covered by rent control are losing so much money, they no longer really want to rent their apartments out at the prevailing new prices, so they decrease their supply of rental housing to the market. And if there's less supply, that's going to drive up prices.

Okay, so let me just make sure I have it pretty straight. You find evidence that rent control increases gentrification, one component of which is the displacement of low income tenants. On the other hand, you also find evidence that low income people, including minorities, at least those who are in rent control units already, they're likely to disproportionately benefit from rent control. So if I'm an affordable housing advocate, I might say, oh, fine, fancy Stanford professor who I'm sure has some kind of great income and or housing subsidy and or situation. I don't care that some landlords are suffering. I don't care that the policy is having some downstream effects that you don't like. I need to make sure that low income people aren't going to get a rent increase of 50% overnight. So how do you respond to that argument?

So when you think about those initial tenants, that's the best bet you're going to get for the benefits of rent control to low income tenants, the people that are already in the housing. But even though we find that those tenants are much more likely to stay in their apartment, when we look 1015 years later, the share of those 1994 residents that are still there is down to 10% or so. So 90% of them no longer live in that initial apartment. And it's that nextkeep the rents low. The rents cannot be increased by too much.If you've been listening closely, it may not surprise you to learn that this system has led to a housing shortage.Because people will not invest in new buildings unless they can get good returns. So if you look at this report written by this national Board of Housing Building and Planning from 2016, they estimated that Sweden needs around 440,000 new homes before 2020.This shortage is what can lead to long lines to get an apartment, especially in the more desirable places. How long do you have to wait in Stockholm?You have to wait for ten or 20 or even 30 years to get an apartment right now, if you would sign up today, what if you don't.Want to wait ten or 20 or 30 years for an apartment?So there are no official figures because it's a black market. But it's clear that there exists a black market. You can get an apartment in several different ways. So one of them is essentially to buy a contract with black money. You can also bribe someone in charge of allocating available apartments to get a better position in the queue. And another thing which is kind of popular is these fake swaps. You are allowed by law to swap apartments with other persons, so you're just pretending that you're swapping apartments, but essentially you are not in the old days, what I've heard, and I must stress that I don't have any scientific evidence on this, but apparently black contract used to cost around 10% of the market value, but in recent years, it has actually grown to, say, 20% of the market value of the apartment. So it's kind of expensive to. To buy a black contract. And, you know, it's always a risk to be involved in this business because even if you pay the money, it's not clear that you will get the apartment simply because, I mean, there are criminal gangs involved in this as well.That does not sound like what the designers of the swedish rental system were going for. But the housing market in Stockholm is so bad that even business leaders there have risen up in protest.The CEO and the founder of Spotify, in 2016, he wrote an open letter to the people of Sweden saying that unless you know you sold this housing situation in Stockholm, Spotify may consider moving its headquarters out of Stockholm simply because we cannot find housing for our future employees.If policymakers can't figure out smarter ways to encourage more affordable housing, you can expect to see this kind of scenario playing out in cities all over the world. What's your experience with rent control or your opinion? Let us know. Our email is radio freakonomics.com. also, please spread the word about our show. That is the best way to support it. You can also leave a rating or review on your podcast app. Thanks for that. We will be back very soon with another new episode of Free Economics Radio. Until then, take care of yourself, and if you can, someone else too. Free economics Radio is produced by Stitcher and Renbud Radio. You can find our entire archive on any podcast app also@freekonomics.com. where we publish transcripts and show notes this episode was produced by Zach Lipinski. Our staff also includes Alina Cullman, Augusta Chapman, Dalvin Abu Aji, Eleanor Osborne, Elsa Hernandez, Gabriel Roth, Greg Ripon, Jasmine Klinger, Jeremy Johnston, John Schnarz, Julie Kanfer, Leorik Bowditch, Morgan Levitte, Neil Carruth, Rebecca Lee Douglas, Sarah Lilly and Teo Jacobs. Our theme song is mister fortune by the hitchhikers. Our composer is Luis Guerra. As always, thanks for listening. How's things?Great. Yeah, things are nice. Got some rain here in California.Good. Congratulations. That's important, I guess. Yeah.The freakonomics radio network the hidden side of everything.Stitcher.When you're really not feeling well or if you're in pain, getting medical treatment without delay is what matters to you. At Matter private network in Dublin, our emergency department is open Monday to Saturday, 08:00 a.m. to 07:00 p.m. you can quickly access expert medical care from our consultant led team and no appointment is necessary. See Matterprivate, ie for details on getting the emergency care you need as soon as possible. Matter private network emergency department Dublin over 16s only.

keep the rents low. The rents cannot be increased by too much.

If you've been listening closely, it may not surprise you to learn that this system has led to a housing shortage.

Because people will not invest in new buildings unless they can get good returns. So if you look at this report written by this national Board of Housing Building and Planning from 2016, they estimated that Sweden needs around 440,000 new homes before 2020.

This shortage is what can lead to long lines to get an apartment, especially in the more desirable places. How long do you have to wait in Stockholm?

You have to wait for ten or 20 or even 30 years to get an apartment right now, if you would sign up today, what if you don't.

Want to wait ten or 20 or 30 years for an apartment?

So there are no official figures because it's a black market. But it's clear that there exists a black market. You can get an apartment in several different ways. So one of them is essentially to buy a contract with black money. You can also bribe someone in charge of allocating available apartments to get a better position in the queue. And another thing which is kind of popular is these fake swaps. You are allowed by law to swap apartments with other persons, so you're just pretending that you're swapping apartments, but essentially you are not in the old days, what I've heard, and I must stress that I don't have any scientific evidence on this, but apparently black contract used to cost around 10% of the market value, but in recent years, it has actually grown to, say, 20% of the market value of the apartment. So it's kind of expensive to. To buy a black contract. And, you know, it's always a risk to be involved in this business because even if you pay the money, it's not clear that you will get the apartment simply because, I mean, there are criminal gangs involved in this as well.

That does not sound like what the designers of the swedish rental system were going for. But the housing market in Stockholm is so bad that even business leaders there have risen up in protest.

The CEO and the founder of Spotify, in 2016, he wrote an open letter to the people of Sweden saying that unless you know you sold this housing situation in Stockholm, Spotify may consider moving its headquarters out of Stockholm simply because we cannot find housing for our future employees.

If policymakers can't figure out smarter ways to encourage more affordable housing, you can expect to see this kind of scenario playing out in cities all over the world. What's your experience with rent control or your opinion? Let us know. Our email is radio freakonomics.com. also, please spread the word about our show. That is the best way to support it. You can also leave a rating or review on your podcast app. Thanks for that. We will be back very soon with another new episode of Free Economics Radio. Until then, take care of yourself, and if you can, someone else too. Free economics Radio is produced by Stitcher and Renbud Radio. You can find our entire archive on any podcast app also@freekonomics.com. where we publish transcripts and show notes this episode was produced by Zach Lipinski. Our staff also includes Alina Cullman, Augusta Chapman, Dalvin Abu Aji, Eleanor Osborne, Elsa Hernandez, Gabriel Roth, Greg Ripon, Jasmine Klinger, Jeremy Johnston, John Schnarz, Julie Kanfer, Leorik Bowditch, Morgan Levitte, Neil Carruth, Rebecca Lee Douglas, Sarah Lilly and Teo Jacobs. Our theme song is mister fortune by the hitchhikers. Our composer is Luis Guerra. As always, thanks for listening. How's things?

Great. Yeah, things are nice. Got some rain here in California.

Good. Congratulations. That's important, I guess. Yeah.

The freakonomics radio network the hidden side of everything.

Stitcher.

When you're really not feeling well or if you're in pain, getting medical treatment without delay is what matters to you. At Matter private network in Dublin, our emergency department is open Monday to Saturday, 08:00 a.m. to 07:00 p.m. you can quickly access expert medical care from our consultant led team and no appointment is necessary. See Matterprivate, ie for details on getting the emergency care you need as soon as possible. Matter private network emergency department Dublin over 16s only.