The government with partners focuses on the wrong things when it comes to the big problems in today's rental market. A few days ago, for example, the penalty for the sale of leases was tightened. In addition, anyone who buys now should also be able to be put in jail.
The basic reason that rents are not allowed to reflect the actual value of the apartments, which creates space for a black market, is done nothing.
This basic problem also creates a host of other undesirable effects, such as housing shortages, long queues, over-renovations and remodeling. When politicians finally decide to liberalize, they choose the part of the market, the new production, where the problems are the least.
For a long time, housing production was secured, due to regulated rents, with substantial government subsidies. Since this has proved impossible to maintain without risking government finances, the focus has instead been on simplification of rules, for example linked to the rent setting in new production.
For the past 15 years, attempts have been made from a political point of view to resolve the inhibitory effects of rent regulation in new production through less strict interventions in rents. From 2006, through so-called presumption rents, rents are allowed for a limited period to be higher so that they can cover the costs.
The latest proposal, to introduce free rental in new production, is another step in the same direction.
Changing the conditions for renting in housing that does not exist is of course politically grateful. There are no tenants (read voters) who can be upset.
However, if the goal is to create a better functioning rental market, it is relatively ineffective, at least in the short and medium term. Only in a few decades can we expect that reforms such as free rental in new production will have any real effect.
The problems created by low rents are not in the new production.
The reason is that rents are already close to their market level. Problems, on the other hand, are big in the older population. In addition, the older stock is almost the entire rental market.
All attempts to create a functioning housing rental market must therefore begin there. For example, free rental in all new contracts would be a reform that would quickly get our dysfunctional rental market on its feet.
The queues would disappear, the black trade would cease and we would see an end to over-renovations while giving the rental market a chance to recover after decades of restructuring.
The focus needs to be shifted from new production rents and instead focused on the entire market. Politicians should, instead of devoting themselves to destroying the way the rental market functions by intervening in the rent setting, focus their activities on things that can actually benefit.
Redistributing from those who have to those who have not is one such example. In all markets, there will be households with too little capacity to demand.
If we want everyone to have a decent standard of living, we should focus the resources of the community on ensuring that those who are unable to demand an acceptable home for their own machine get the help they need.
Regulating rents for households with relatively high incomes, or subsidizing high new production rents to be slightly lower, is clearly a bad policy.