Rent-controlled tenants in Stockholm take up 38 percent more space than they would in a normal market.
April 24, 2026
Original Paper
The Impact of Rent Control on Housing Consumption
SSRN · 6629277
The Takeaway
Policies designed to make housing affordable can lead to a perverse incentive where lucky tenants overconsume the very resource that is in short supply. Because their rent is artificially low, residents in Stockholm have no financial reason to move to a smaller apartment as their needs change. This leads to individuals living in large family-sized units while others are stuck on decade-long waiting lists. The 38 percent gap in space consumption represents a massive inefficiency that displaces thousands of potential residents. Rent control might protect existing tenants, but it does so by encouraging them to hoard space at the expense of everyone else.
From the abstract
Although increased demand and misallocation of housing are established consequences of rent controls, there is limited research on how household demand responds to below-market-rate rents at the time of lease signing. This study analyzes detailed household-level data from Stockholm, Sweden, where rent regulation is widespread and tenants vary substantially in income, household composition, and the implicit rent subsidy embedded in regulated rents.On average, regulated rents are estimated to be 3