Rent control and vacancies in Sweden

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Insecure property rights and the housing market: Explaining India’s housing vacancy paradox

PurposeRent control may lead to inefficient use of subsidized apartments. This paper aims to empirically investigate if this phenomenon exists under the Swedish rent control regime.Design/methodology/approachThe quantitative part of the study uses data from Statistics Sweden to calculate, for all municipalities in Sweden, the fraction of residential rental units where no one is living permanently. The qualitative part augments the quantitative results with a survey where representatives for 14 municipal and four private property companies in small, mid-sized and large municipalities were interviewed.FindingsThis paper finds that a surprisingly large fraction of the rental housing stock, about 9.4% on a national level, is underused in the way that rent is paid but no one is living permanently in the apartment according to the official Swedish population register. The underutilization rate is negatively correlated to the median rent in a municipality.Research limitations/implicationsThe study is limited to Swedish data. This paper does not explore the potential effects of regional economic and demographic conditions on the measure of underutilization.Practical implicationsA policy implication of the present results is that underutilization of the Swedish rental housing stock can be reduced by limiting the supply of rent-controlled housing to households that are in economic or social need.Originality/valueNumerous papers have analysed various aspects of rent control. However, few papers have empirically analysed how a general rent control system where all tenants, irrespective of economic or social need, have access to rent controlled apartments may contribute to housing inefficiencies. This research contributes to the empirical literature on rent control by analysing the relationship between non-targeted housing subsidies and underutilization of housing units.

During the past decade, over 200 cities in the United States have imposed rent control [Baird, t980, pp. 54-7]. Although most likely a response to the accelerating inflation of the 1970's, this second generation of rent control has been justified on the grounds of the existence of a housing crisis. In different locales the crises are described variously as arising from a housing shortage, low vacancy rates, rent increases, tenant hardship, housing deterioration, lack of new construction, or environmental necessity [Baar and Keating, 1975, p. 490]. Invariably, newly enacted rent control ordinances are presented as temporary measures. Presumably, policymakers view the imposition of rent control and its concomitant effects as reversible after the housing crisis, however defined, has passed. But is this assumption correct? Does decontrol restore market rents, maintenance levels, optimal crowding, and tenant mobility? Or are housing units permanently altered by virtue of their having been under rent controls? These are important issues in evaluating rent control as a feature of local housing policy. Surprisingly little empirical work has been done on the relationship between rent control and housing quality, crowding, and tenant turnover. Furthermore, the authors have found no empirical studies dealing with decontrol. The purpose of this paper is to make a modest contribution to understanding the efficacy of decontrol by exploring the effects of selective decontrol in New York City (NYC). The data used in this study are taken from the 1968 Special NYC Housing

We exploit quasi-experimental variation in assignment of rent control to study its impacts on tenants, landlords, and the overall rental market. Leveraging new data tracking individuals’ migration, we find rent control increased renters’ probabilities of staying at their addresses by nearly 20%. Landlords treated by rent control reduced rental housing supply by 15%, causing a 5.1% city-wide rent increase. Using a dynamic, neighborhood choice model, we find rent control offered large benefits to covered tenants. Welfare losses from decreased housing supply could be mitigated if insurance against rent increases were provided as government social insurance, instead of a regulated landlord mandate.

Despite acute staffing shortages in social work, workforce planning within the UK social care sector is compromised by poor workforce intelligence. This study aimed to inform the evidence base providing new data on recruitment and retention in Wales, examining what personal and organizational characteristics are associated with intentions to leave, and what initiatives or incentives might mediate that effect. A multi-method design facilitated comparisons between two data sources--a census of all 22 Welsh local authority employers about recruitment and retention practices and a survey of all social workers and senior practitioners employed in social services (n = 998; response rate 45.9%) about demography, workforce characteristics, working patterns, morale and plans and reasons for leaving one's job. Vacancy (mean 14.4%) and turnover (mean 15%) rates were statistically significantly higher in children's services than in adult services; vacancy rates were also higher in authorities that offered higher starting salaries. The provision of certain types of traineeship might also be associated with higher vacancy rates but these results should be treated with some caution. There was little evidence that recruitment and retention initiatives were associated with lower vacancy or turnover rates, despite employers' perceptions about their effectiveness. Social workers derived a lot of satisfaction from their work, but more than a quarter wanted to leave their job within 6 months, and almost as many were actively seeking alternative employment. Intention to leave was explained by job and employer satisfaction, and negative feelings about pay. Senior practitioners and staff members with longer lengths of service were less likely to want to leave, even if they were dissatisfied with their job or employer. Job and employer dissatisfaction was associated with retention initiatives related to facilities, good caseload management and home-working, suggesting that dissatisfied staff might remain in employment for longer if these initiatives were in place.

PurposeThis study aims to explore the spatial externalities of apartment vacancy rates on housing rent by considering multiple vacancy durations.Design/methodology/approachThis research uses smart meter data to measure unobservable vacant houses. This study made a significant contribution by applying building-level smart meter data to housing market analysis. It examined whether vacancy duration significantly affected apartment rent and whether the relationship between apartment rent and vacancy rate differed depending on the level of housing rent.FindingsThe primary finding indicates that there is a significant negative correlation between apartment rent and vacancy duration. Considering the spatial externalities of apartment vacancy rates, the apartment vacancy rates of surrounding buildings did not show any statistical significance. Moreover, quantile regression results indicate that although the bottom 10% of apartment rent levels showed a negative correlation with all vacancy durations, the top 10% showed no statistical significance related to vacancies.Practical implicationsThis study measures the extent of spatial externalities that can differentiate taxation based on housing vacancies.Originality/valueThe findings indicate that landlords have asymmetric information about their buildings compared with the surrounding buildings, and the extent to which price adjusts for long-term vacancies differs depending on the level of apartment rent.

When there are binding price controls, there are shortages and the allocation of goods across consumers may not be efficient. In general, the misallocation costs of price controls are first order, while the classic welfare losses due to undersupply are second order. This paper presents an empirical methodology for estimating the degree of misallocation of housing units due to rent control in New York City. This methodology involves comparing the relative consumption of different demographic groups within the rent controlled area with the relative levels of consumption in a free market area. Our best estimate of the costs of rent control in New York due to the misallocation of rental apartments is 200 dollars per apartment annually.

Berlin is a growing city. Almost 48,000 people permanently moved to Berlin in 2013, and the number of national and international tourists is constantly rising: 30 million tourist overnight stays are expected in over 700 tourist accommodations in 2016. This massive influx of people challenges the existing built capacities, leading to a tense housing market with increasing rents, selling prices and standard land value, especially in attractive inner-city neighborhoods. The politicization of real estate development and rent prices has produced several regulatory housing policy measures such as the increase of the land purchase tax (2014), Subpoena on the Prohibition of the Misuse of Living Space (2014), and Rent Control (2015). The development of Berlin’s real estate market into one of the most attractive capital investment markets took place at unprecedented speed: inter alia, the transformation of rental property into condominiums or the transformation of residential into commercial usages, vacancy rates have decreased to around 2 percent today. These developments have resulted in a strongly articulated demand for new (residential) constructions requesting about 20,000 additional dwelling units in Berlin.In a four-field-matrix developed elsewhere (Landau/Wellner, 2014), the variable of ‘tourist accommodations’ (TA) is being examined as influential factor on the changing residential quality in inner-city residential neighborhoods in Berlin, where tourism has an increasing impact on both economic development as well as on social cohesion. Tourism has evoked resentment and protest amongst some residents of areas that are heavily frequented by tourists. The variable TA is divided into an official or formalized accommodation segment, i.e. hotels and hostels, as well as an informal sector, i.e. privately-rented sublets or vacation rentals whose number is estimated at 12,000 in all over Berlin. The dimensions of residential quality will be differentiated into built features (location, quality of building etc.), economic (rent level, tenant mix etc.), social (neighborhood atmosphere, security, fluctuation etc.), ecological and health-related (noise, pollution etc.) aspects, thus contributing to the conceptualization of ‘residential quality’.

The country is currently experiencing a severe crisis in rental housing, characterized by chronic shortages of units that are available at prices affordable to most renters. Rapidly rising rents, declining construction of new units, and conversion of existing units to nonrental uses are all indicators of this crisis. In this paper we explore three approaches to the problem, finding difficulties with each. Rent control, advocated by tenant groups, is at best a stop-gap measure that eliminates large increases in rents; it fails, however, to provide additional housing. Public sector programs, including both housing allowances and public housing, are especially costly during inflationary periods and therefore are being severely curtailed. Finally, the private sector approach-summed up as "build more housing"-is examined in detail, in light of data obtainedfrom 115 self-contained U.S. housing markets in 1970. It is found that contrary to the predictions of supply-side theorists, housing markets characterized by a large amount of new rental housing construction do not have lower rents. Nor is vacancy rate, another indicator of relative supply, found to be associated with rent levels. These findings seriously question the wisdom of housing policies that callfor an end to local land-use and building regulations, under the false belief that such regulations are responsible for artificially restricted supply and hence higher prices and rents. We conclude with some policy suggestions of our own, including the development of such nonmarketplace alternatives to rental housing as limited-equity cooperatives and public utility housing.

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Equity and efficiency aspects of rent control: An empirical study of New York City

While many countries have witnessed the retreat of the state from social housing under neoliberalism, the Chinese government has taken the opposite trajectory, significantly expanding its involvement in public rental housing (PRH) over the past decade through substantial investments. However, the effectiveness of the PRH program has come under scrutiny due to its inability to meet the demand for housing units while grappling with a substantial vacancy rate. This study aims to unravel this paradox by utilizing a unique city-level database that encompasses information on public rental housing stock, land supply, waiting time, and allocation practices. The data suggest that there is a structural mismatch between supply and demand for PRH in China, with both high and low vacancy rates in different cities, and even high vacancy and high allocation rates co-existing in one city. The results of estimating the OLS regression model of PRH supply and demand indicate that the actual supply fails to align with the policy objectives and the actual housing demand. Rather, they are more a result of the power relationship between the central and local governments, and cities with high fiscal autonomy provide fewer PRH. Furthermore, local governments fail to set eligibility criteria in response to housing supply, demand, and allocation, further exacerbating the mismatch. This paper provides policy recommendations that aim to enhance the sustainability and effectiveness of the PRH program, contributing to more equitable urban development.

Rent control has been linked to housing abandonment in both the policy community and in academic research. The roots of this link lie in the political struggle over various forms of rent regulation which took place in New york City in the late 1960s and early 1970s, and has spread across the country to touch virtually every community that considered rent regulation as a mechanism for controlling high rent levels. We have reexamined the evidence which was used to make the original claims regarding the consequences of rent regulation on abandonment, and find that it is seriously lacking in explanatory power. Indeed, the problem of low income populations affecting prevailing rent levels seems much more significant in explaining the gap between rent levels necessary for landlords to combat deterioration and avoid abandonment as an option. We conclude by offering a series of policy-related discussions to further articulate the issues.