Now the directives for the inquiry on the free rents for newly constructed rental properties will be written. According to januariavtalet between the two liberal parties and the social democrats and the green Party, the investigation work in 2019-2020. From July 2021, the new legislation should apply.
We wrote earlier this year on DN Debate about why rent control should be abolished.
Now we go one step further with a proposal as to how the directives of the commission of inquiry should be written. They should be formulated so that they indicate as a clear indication to show how the harmful rent control is phased out in socially acceptable forms. The goal must be a market for all – without exception. Liberalisation must therefore cover the whole of the stock of hyresreglerade apartments.
It is fördelningspolitiskt better with a generous housing allowance than with the subsidies to today’s new construction januariavtalet promise.
Several reasons speak against januariavtalets tight focus on newly built apartments:
1 It will take immense and messy a long time to build away the housing shortage because januariavtalet applies only to newly constructed rental units. These correspond to as little as 1-2% of the entire stock of rental apartments. This is a fundamental mistake that threatens to make permanent the pernicious rent control for the next hundred years.
In a preliminary stage, will probably rents for new rental units high. Populist politicians may then the argument against free rentals, something that Assar Lindbeck recently stressed in an interview in dagens nyheter. This could threaten the transition to a completely free rental market.
2 Imbalances on the rental market would be accentuated if only the newly produced apartments, market rents. Rents for new rental properties is already high, not far from the marknadshyran. Initially, they would be even higher, while they remain low for hyresrätterna in regulated apartments. An increased hyressplittring means even more unfair.
the Young families have to pay high market rents for new rental units, while older, as a rule, the more wealthy households, remain in centrally located apartments with low regulated rents. A full liberalisation would, according to a report from the Fiscal council have the fördelningspolitiskt beneficial effect to reduce rents in the metropolitan outskirts of the city at the same time that they are raised in the centre.
3 Queues to rental apartments in the regulated stock will be left. in addition, They will grow if januariavtalet would guide the directives. Sex in the three big cities of around a million bostadssökare becomes even longer. The reason is that the old tenancy is relatively cheaper and hence more attractive if market rents are introduced only for the small segment that the new construction form.
4 Januariavtalet could lead to an excessive production of new apartments. Market rents for all rental units have the advantage that more rental properties come on the market. Then comes the need for new construction to fall, because we get a more efficient use of the entire stock of rental apartments.
There are several methods for this.
the Landlord pays the tenant in the near future for the right to introduce market rents at some time in the future. Let us illustrate our technique with a concrete case. We start from an older well-off man with a centrally located tenancy with a rent of 12,000 per month. In the first step, will the landlord, preferably in cooperation with the rent tribunal and the tenant, agree on how big marknadshyran would be today. Say, at the end of 20.000 sek per month.
the Landlord and the tenant enter an agreement that gives the tenant a hyresrabatt during the suggested period of three years, on the difference 8.000 dollars each month. The regulated rent is raised, thus not for the tenant. The landlord puts each month in the 8,000 crowns on a bank account that only the tenant may use. If he wants to leave the apartment before the three years has expired, he has the right, at any time, withdraw the full amount accumulated in his account for hyresrabatten. At the same time allowed the landlord the right to immediately take out the marknadshyran of 20,000 crowns for the new tenant moves in.
After three years, the tenant by the landlord’s contributions amassed a small fortune of 288.000 sek on his account. First, then raised his rent to marknadshyran of 20,000 crowns. The amount in the account can he use to pay marknadshyran during the three following years. The tenant is held thereby harmless for a total of six years. In so doing, he a full six years to adapt to marknadshyran.
Januariavtalet on the dismantling of rent regulation only for newly constructed apartments is a threat to a free rental market and all the benefits that it would give the Swedish society.
The average rent increase in the event of deregulation should be between 1.000–3.000 sek per month. In attractive areas such as Stockholm becomes the higher. Since a large part of the regulated hyresrätterna owned by the municipal so-called public real estate companies will very of the rent increase at the transition to market rents end up in the public hands. These companies may then choose to reduce rents in less attractive areas where rent control pushed up the rental level.
the Directives should require a closer examination of how housing benefits can be strengthened so that vulnerable households receive adequate assistance when market rents are introduced. It is fördelningspolitiskt better with a generous housing allowance than with the subsidies to today’s new construction januariavtalet promise.
Our proposal can be modified in various ways. Anpassningstiden can be made shorter or longer. The shorter the period, the faster it ends the housing crisis. The longer it gets, the more time is allowed to the tenants to adapt to marknadshyran.
the Investigation should take the development of standardized lease that determines the tenure, the length, and the new forms of tenancy which are based on contracts between independent parties – as in many other countries.
Januariavtalet on the dismantling of rent regulation only for newly constructed apartments is a threat to a free rental market and all the benefits that it would give the Swedish society.
It is certainly easy to go wrong when you are under great pressure to cobble together an agreement in many areas. But januariavtalet is not set in stone as evidenced by its heading ”Draft sakpolitisk agreement”. We interpret this as that the draft can be written on and then get a more constructive content. We want to perceive januariavtalet as a historical opening for progress – not as it now looks to be: a step back.
Januarisamarbetet should get a new start by the directives for the inquiry be designed so that the entire regulated the stock of rental properties quickly, easily and fairly get market rents. We are proposing a settlement of six years, i.e. two terms of office so that voters can quickly see the benefits of the free rents.
A major advantage of an agreement on the full liberalisation is that it can be anchored over blockgränsen. Then it becomes stable and binding for future governments. The liberal parties can gain credibility for a long time to come. The same applies to the other parties if they contribute to a constructive transition to market rents.
