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1 – 10 of 68This paper aims to test two hypotheses related to the supposedly negative impact of rent control on residential mobility: the mobility of renters is, first, negatively related to…
Abstract
Purpose
This paper aims to test two hypotheses related to the supposedly negative impact of rent control on residential mobility: the mobility of renters is, first, negatively related to how attractive their residential areas are and, second, relatively high for renters living in properties built after 2005.
Design/methodology/approach
This paper estimates logit and multinomial logit regressions and models household moves. The multinomial logit regressions separate between short- and long-distance moves and between moves to rentals and to owned dwellings. This paper uses the “relative income” of the tenants’ residential areas to proxy area attractiveness. This paper estimates regressions for entire Sweden and the three largest “commuting” regions and municipalities, respectively.
Findings
The full sample provides support of both hypotheses in all regressions. Hypothesis one gets stronger support for moves to other rentals than moves to owned dwellings but about equally strong support for short- and long-distance moves. Hypothesis one obtains strongest support in Gothenburg municipality while hypothesis two obtains strongest support in the Malmö region. Also, hypothesis two obtains stronger support for short-distance moves than long-distance moves and slightly stronger support for moves to owned dwellings than those to rented dwellings.
Research limitations/implications
This paper does not estimate “how much” rent control affects mobility, and results cannot be used to design specific rent setting policies. Results may be sensitive to how different types of moves are defined.
Practical implications
Efforts to reform rent setting policies in Sweden are encouraged.
Originality/value
To the best of the author’s knowledge, this paper’s two hypotheses are not tested before in Sweden and can be tested without control groups.
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Bo Bengtsson, Peter G. Håkansson and Peter Karpestam
Transaction costs, responsive housing supply, rent controls, tenant protection, and access to credit affect residential mobility – these different parts of housing policy are…
Abstract
Transaction costs, responsive housing supply, rent controls, tenant protection, and access to credit affect residential mobility – these different parts of housing policy are included in what has been defined as housing regimes, which embrace regulations, laws, norms, and ideology as well as economic factors. In this chapter, we investigate how these regimes change by using institutional theories of path dependence. We use Sweden as an example and study three Swedish housing market reforms during the past decades that may have affected residential mobility, each related to one of the main institutional pillars of housing provision: tenure legislation, taxation, and finance. More precisely, we study the development of the rental regulation since the late 1960s, the tax reform in 1991, and the new reforms on mortgages since 2010. What caused these reforms? What were the main mechanisms behind them, and why did they occur at the time they did? We argue, besides affecting residential mobility, these reforms have the common feature of including interesting elements of path dependence and forming critical junctures that have led the development on to a new path. Institutions of tenure legislation, housing finance, and taxation are often claimed to have effects on residential mobility. Although they are seldom designed with the explicit aim of supporting (or counteracting) residential mobility, they may sometimes do so as more or less unintended consequences.
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Patrick McAllister and Heather Tarbert
This paper analyses the effect of potential lease expiry on the rental negotiation process and levels of rental agreed. Several observers have noted that tenants may use the…
Abstract
This paper analyses the effect of potential lease expiry on the rental negotiation process and levels of rental agreed. Several observers have noted that tenants may use the threat of lease termination at rental negotiations in order to obtain a rental and/or other concession. It is argued that it will often be rational for the landlord to make a rental concession in these circumstances and a model that identifies a theory‐forecasted concession level for landlords is developed. However, the bargaining process will often cause deviation from an equilibrium solution. The concession level of the landlord will be a function of four variables: expected landlord’s cost of void, probability of tenant relocation, landlord’s risk preference and the effects of the bargaining process. Utility theory is used to illustrate why the risk averse or risk neutral landlord in a potential lease termination situation will always maximise his/her utility by conceding an amount on the open market rental value provided that the landlord perceives the probability of lease termination to be greater than zero. However, although it is possible to identify a positive solution to the calculation of maximum concession, behavioural approaches to bargaining theory suggest that differences in individual negotiator’s attributes, social contexts and cognitive biases will also affect the outcome of a negotiated rent setting process.
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The Swedish central government has implemented a radical market‐oriented reform of its real estate management. Authorities are free to rent premises from private firms, and…
Abstract
The Swedish central government has implemented a radical market‐oriented reform of its real estate management. Authorities are free to rent premises from private firms, and stateowned properties have been allocated to a number of entities that lease their properties to authorities on conditions similar to those on the open market. The background and experience from these reforms are described in this paper. Local authorities and county councils have also reformed their real estate management systems in the same direction, but not as radically. There were many unexpected problems with implementing these systems, related for example to difficulties in writing good contracts for special purpose buildings, conflicts about rent setting and differences in bargaining power between the property‐owning units and the tenants/authorities. The general view is, however, that the reform created necessary economic incentives for the authorities in the public sector to economise on premises, but that it is very important to think through the details and to adjust the system to changing circumstances. An example is that the introduction of school vouchers created problems for some systems of setting internal asset rents.
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Mats Wilhelmsson, Roland Andersson and Kerstin Klingborg
The purpose of this paper is to analyze the effects of Swedish rent controls on observed vacancy rates for rental housing.
Abstract
Purpose
The purpose of this paper is to analyze the effects of Swedish rent controls on observed vacancy rates for rental housing.
Design/methodology/approach
Housing vacancy rates are unevenly distributed among Swedish municipalities. In large expansive municipalities, such as Malmö, Göteborg and Stockholm, vacancy rates are very low, while in declining or smaller municipalities such as those in the northern and interior parts of Sweden, vacancy rates are considerably higher. This implies welfare losses not only in growing municipalities with queues for rental apartments but also in municipalities that are shrinking since the controlled rents there are higher than market rents and cause higher vacancy rates than with market rents. The authors estimate the influences of various determining factors, such as population growth, population size, rent levels, construction, demolition and market orientation of rents, on the observed vacancy rates.
Findings
The authors find that that these factors affect the vacancy rates differently depending on whether a municipality is large or small, growing or shrinking. Population growth, in percent per year, plays an important role in explaining the observed vacancy rates in declining regions.
Research limitations/implications
A research task that remains to be done is to calculate the welfare losses due to rent higher than the market rent for municipalities in contraction.
Practical implications
To reduce the welfare losses of rent control, both in expanding and contracting municipalities, economists' straightforward recommendation to deregulate the rent control should, in principle, be carried out.
Originality/value
In many countries, rent control regulations are limited to cities, such as New York City. The paper shows that the Swedish rent control system however, applies nationwide, except for annual rent increases, which are set locally through negotiation.
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Urbanization usually involves gentrification. Gentrification implies revitalization whereby housing becomes more up-market. This aim of this study is to ascertain whether…
Abstract
Urbanization usually involves gentrification. Gentrification implies revitalization whereby housing becomes more up-market. This aim of this study is to ascertain whether conversion of tenure from rent to cooperative ownership might initiate a gentrification process. The focus is on the socio-economic composition of individuals living in the converted residential properties. The degree of gentrification is determined by the extent to which the original tenants are replaced by individuals with more resources.
The analysis is limited to the distinct of Östermalm in Stockholm city. The quantitative analysis is based on a longitudinal database, Geosweden, covering the total Swedish population in 1990-2000.
Östermalm is an inner city district with 60,000 inhabitants and a higher share of converted dwellings than any other district in Stockholm. About 2,300 dwellings were converted between 1991 and 1996. Limited indications of social change can be identified during the conversion.
The conversion was completed in 1995. All indicators of gentrification point to social change through residential mobility in 1995-2000. Individuals who moved into the converted properties had more disposable income than those who moved out or stayed in 1995-2000. They also had higher levels of education. The results also point to families with children as a new group of gentrifiers.
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Kath Hulse, Colin Jones and Hal Pawson
The purpose of this paper is to re‐appraise the role of the private renting in the housing system drawing on a review of public policies toward the sector in six countries. It…
Abstract
Purpose
The purpose of this paper is to re‐appraise the role of the private renting in the housing system drawing on a review of public policies toward the sector in six countries. It re‐examines the adequacy of explanations about tenurial “competition” and the dynamics of tenurial change using a cross disciplinary perspective.
Design/methodology/approach
The paper critiques key explanations on the nature and type of competition between housing tenures, notably dual and unitary models, and the role of private renting in explanations of tenure dynamics. The paper also explores some of these ideas empirically by examining the changing role of the private renting relative to other tenures in a number of European countries and in Australia.
Findings
The paper expresses doubts about the potential for unitary markets to develop/continue as integrated markets because of the fundamental problems about ensuring continuing investment in the private rented sector and constraints on the maturation process, particularly where ownership of rental housing is diverse and small‐scale. The analysis suggests that housing tenures are quite fluid and with a general trend towards deregulation of private rents there is a blurring of the distinction between different types of rental systems.
Practical implications
The analysis suggests that it is critical to understand changes in private renting taking into account broader economic conditions, trade‐offs about housing consumption and investment, and public policy settings.
Originality/value
The analysis draws out theoretically, and explores empirically, the process of change in tenure relations by for the first time focusing on the role of private renting in these dynamics.
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Urban Fransson and Matias Eklöf
Concerning migration on a national level, two phenomena emerge: people migrating from one region to another and people moving from the countryside to the cities. The geographical…
Abstract
Concerning migration on a national level, two phenomena emerge: people migrating from one region to another and people moving from the countryside to the cities. The geographical shift of the population between regions in a country is a slow process. In Sweden, only a few percent of the population migrate yearly. Nevertheless, migration has caused and still causes considerable redistribution of the population toward the metropolitan regions in Sweden. This section will emphasize general trends in population concentration through urbanization and migration in Sweden and compare these trends with changes in other countries.
At the Conservative Party Conference of 1986, the Minister of State for Housing, Mr John Patten, outlined his intentions for a new Rent Bill to be included in his party's general…
Abstract
At the Conservative Party Conference of 1986, the Minister of State for Housing, Mr John Patten, outlined his intentions for a new Rent Bill to be included in his party's general election manifesto. This directs the spotlight onto rented housing and Mr Patten's slogan ‘the right to rent’ will no doubt lead to a lively discussion. This paper aims to contribute to the debate by reviewing two major housing reports as they relate to rents and making further suggestions.