> Assuming a family of 4 would live there instead, she's effectively removing 3 people from the city.
I think is overrated concern in general. Most popular cities aren't underdeveloped. Rather the problem is concentration of resource. Having less optimized areas are actually a good things as that means more areas are equivalent. Which is really what supply is in housing markets. It's when every one too young, old or poor have to move you get problems because now all the attractive things are in the same area. Which means the demand will be very high.
Also this is happening in the housing market in general but apparently it isn't a problem when it's wealthy people retiring in their forties because of the housing market itself.
> There's a gradient of prices as you move further from the city center, and this particular hypothetical woman is moving to a much smaller unit.
That is mostly true if you are moving voluntarily. Because if you couldn't find something beneficial you wouldn't move in the first place. It isn't as true when you are being forced to move. Often it isn't even about what you are moving to but what you are moving from. Once you can't live close to your family, acquaintances or familiar establishment it doesn't matter as much.
It's sort of curious how so many seem to agree that we are "losing our values" in society (or whatever) but then base everything on assets. If we want people to be able to live close to their grandchildren, know their friends from growing up, involve themselves in organization or otherwise make social connections it isn't going to be free.
Sweden had a functioning rent control system for many decades until relatively recent changes. Please feel free to elaborate how you can clearly link the current situation to rent control and not those changes.
I don't see how that is particularly legitimate argument against rent control as that is how the housing market works in general. The difference is that if you buy an apartment you also get appreciation.
I don't think that is an unpopular opinion. On the contrary it's been the going one for quite a while. Deregulating letting was said to be part the solution when it was introduced. Now it is said to be part of the problem to have even more deregulation. A more unpopular opinion is that we actually shouldn't try to improve the situation.
The reality is that Stockholm geographically challenged. The major pieces of available land is the city airport and areas of parkland. The city airport has been given a lease until 2040. The areas of parkland is a national park.
The housing market is one the most important markets in Sweden. Anything that significantly lowers the value of real estate will be political suicide. Meaning that in the current market there can't be any solution that actually delivers affordable housing.
There is also little will from the voters to accept measure that would stabilize the market long terms like removing the mortgage interest deduction, introduce an actual real estate tax or regulating lending similar to other countries.
All this means that it's very unlikely that there will ever be even a relatively affordable market in Stockholm. Which will end up being disastrous when the cost of rent is also among the biggest single cost in the knowledge economy. For companies you can argue that the increase in housing cost will be offset by the larger available workforce but you can't say the same for public services.
Past or future deregulation isn't going to solve this. On the contrary it is what prevents a correction. The natural thing to do when something becomes too expensive is look for alternatives. In the housing market this means moving somewhere else. But as companies can attract those good or privileged enough to Stockholm anyways they don't have to move. So the average person doesn't have much of a choice but to move there themselves. Which in turn makes Stockholm even more attractive.
The paradox is that most any improvement of the Stockholm housing market will there make the situation worse long term. So the solution has to be not to cater for this market but to improve the market somewhere else instead. Unfortunately this also unlikely.
I agree with many of your points. Especially that the mortgage market is really messed up. But as you say, it's almost impossible to make changes that negatively influence the (upper) middle class.
A pet "dictator for one day" idea of mine is to simply move the capital to something like Linköping! Has an airport, enormous amounts of farm land that can just be built on etc, less than 2 hours away from Stockholm by train.
Make Stockholm like NYC and Linköping as DC. If all government headquarters (and related functions) were forced to move, it would certainly take hundreds of thousands of people with them (including family members etc).
You wouldn't have to move the government though just companies. This is a major part of creating the problem from the beginning. Because as you probably know many of the industrial companies where distributed to other locations like Linköping, Trollhättan, Karlskrona and so forth. As those companies and the industry general has shifted to no longer need things like manufacturing facilities everyone ends up in Stockholm. It's a paradox that when you can work from anywhere it also means everyone can work from the same place.
Of course if a larger company would move outside of Stockholm that places would soon face the same problem even quicker as it's smaller. But if it happened to many different places there might be a shoot. Unfortunately you would have the same issue that many people would have to undermine their immediate interest for it to happen. But at least it would be technically possible. Stockholm has probably gone so far that it is socially and technically impossible as the economic consequences of an effective solution might be unpredictable.
No, what basic economics says it that a price ceiling causes a shortage of supply _if_ no other variables change. Which they do in general but especially in the housing market. That is the principle called "ceteris paribus".
And that is in addition to having the right supply curve in the first place. The potential shortage of supply created by a price ceiling may very well be irrelevant when supply decreases from other factors.
You are absolutely right. This is by far the main reason. Even more so as in Sweden you usually have two mortgages. One personal which is used to purchase the property and one taken out by the co-op itself which you pay as part of the monthly fee. On top of that you are also personally liable for mortgage debt.
I think is overrated concern in general. Most popular cities aren't underdeveloped. Rather the problem is concentration of resource. Having less optimized areas are actually a good things as that means more areas are equivalent. Which is really what supply is in housing markets. It's when every one too young, old or poor have to move you get problems because now all the attractive things are in the same area. Which means the demand will be very high.
Also this is happening in the housing market in general but apparently it isn't a problem when it's wealthy people retiring in their forties because of the housing market itself.
> There's a gradient of prices as you move further from the city center, and this particular hypothetical woman is moving to a much smaller unit.
That is mostly true if you are moving voluntarily. Because if you couldn't find something beneficial you wouldn't move in the first place. It isn't as true when you are being forced to move. Often it isn't even about what you are moving to but what you are moving from. Once you can't live close to your family, acquaintances or familiar establishment it doesn't matter as much.
It's sort of curious how so many seem to agree that we are "losing our values" in society (or whatever) but then base everything on assets. If we want people to be able to live close to their grandchildren, know their friends from growing up, involve themselves in organization or otherwise make social connections it isn't going to be free.