Why a rent freeze would backfire

Labour should resist populist interventions that will worsen affordability

Rent controls, now reportedly considered by Rachel Reeves, are back as a debate in Labour circles. Today on Arguably, David Lawrence explains why they’re not just ineffective but unprogressive. This piece is paid but you can read it now by becoming a full subscriber or signing up for a seven-day free trial.

Image created with Gemini

In Stockholm, when you turn 18, your parents honour the occasion by putting your name on the waiting list for a flat. The Bostadsförmedlingen, Stockholm’s housing agency, acts as the central gatekeeper for the city’s rent-controlled apartments. If your parents are quick, you might enjoy the privilege of picking up the keys to your new flat on your 30th birthday – twelve years later. If they are slow, you could still be waiting in your 40s.

The waiting lists are so long that some housing cooperatives allow parents to pay to register children from birth. Indeed, there are 15,000 children between the ages of 0-10 on the waiting list for a single housing cooperative in Stockholm. If you’re a migrant who’s just arrived in Sweden, good luck – you’re at the back of a long queue, competing with native Swedes who have waited from birth. Things are so bad that even the mild-mannered BBC has described the policy as a failure.

Stockholm’s extraordinary housing queues are the complex product of a simple policy – a policy that fixes rents at a set value, rather than allowing them to adjust to reflect demand for housing.