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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 method of allocating below-market-rent apartments significantly influences the outcomes of rent control policies. While queuing systems may appear fairer than allocation by landlord preferences, they disadvantage younger households. An analysis of over 71,000 rental contracts mediated by Stockholm’s housing queue from 2003 to 2023 reveals two key trends. First, there has been a decline in young tenants as the average queue time increases. In the city center, the share of leases to tenants aged 18–30 dropped from 12.7% in 2003 to 4.4% in 2023, while leases to tenants aged 60+ increased from 4.9% to 22.2%. Second, younger tenants pay higher rents than older tenants. Because apartments with lower rents require longer queue times, older households benefit. A 30-year-old renting a two-room apartment in the city center is estimated to pay 29.2% more than a 60-year-old for a comparable unit in 2023. These findings show that queueing systems disproportionately benefit older households 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 12 Dec 2024.
    • Handle: RePEc:hhs:kthrec:2024_006
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    References listed on IDEAS

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    1. 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.
    2. 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.
    3. Gyourko, Joseph & Linneman, Peter, 1989. "Equity and efficiency aspects of rent control: An empirical study of New York City," Journal of Urban Economics, Elsevier, vol. 26(1), pages 54-74, July.
    4. Munch, Jakob Roland & Svarer, Michael, 2002. "Rent control and tenancy duration," Journal of Urban Economics, Elsevier, vol. 52(3), pages 542-560, November.
    5. Saiz, Albert, 2023. "The Global Housing Affordability Crisis: Policy Options and Strategies," IZA Policy Papers 203, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    rent control; housing queues; housing policy; displacement;
    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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