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Youth Displacement in Rent-Controlled Housing: The Consequences of Housing Queues
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Youth Displacement in Rent-Controlled Housing: The Consequences of Housing Queues

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  • Donner, Herman

    (Department of Real Estate and Construction Management, Royal Institute of Technology)

Abstract

The way which apartment with below market rents are assigned is a key determinant of the impact of rent control policies, and assignment of apartments through queuing is likely to disadvantage young households, which this study explores. Over 71,000 rental contracts mediated through a public housing queue in Stockholm between 2003 and 2023 are analyzed. As the market value of apartments have outpaced regulated rents, rent controls have become more severe over time. As a consequence, average waiting times increased substantially during the period, reaching 19.6 years in the city center in 2023. Two main consequences of this development emerge: First, the share of leases to young tenants (18-30 years) declined, while leases to older tenants (60+) rose. In the city center, leases assigned to young tenant leases dropped from 12.7% in 2003 to 4.4% in 2023, while the share of older tenants increased from 4.9% to 22.2%. Second, having accrued more time in the queue, older tenants are able to rent more subsidized apartments. For a 2-room, 60m² apartment in the city center, a 30-year-old is estimated to pay 29.2% higher rent than a 60-year-old in 2023. The analysis suggests that queue-based allocation of rent-controlled apartments increasingly favors older households over younger ones, with these trends intensifying as rent controls become more severe.

Suggested Citation

  • Donner, Herman, 2024. "Youth Displacement in Rent-Controlled Housing: The Consequences of Housing Queues," Working Paper Series 24/6, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance, revised 19 Sep 2024.
    • Handle: RePEc:hhs:kthrec:2024_006
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    References listed on IDEAS

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    1. Edward L. Glaeser & Erzo F. P. Luttmer, 2003. "The Misallocation of Housing Under Rent Control," American Economic Review, American Economic Association, vol. 93(4), pages 1027-1046, September.
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    4. Roland Andersson & Bo Söderberg, 2012. "Elimination of Rent Control in the Swedish Rental Housing Market: Why and How?," Journal of Housing Research, Taylor & Francis Journals, vol. 21(2), pages 159-181, January.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    rent control; housing supply; housing demand; housing misallocation;
    All these keywords.

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R28 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Government Policy
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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