The Apartment Market and the Rent Regulation

Abstract

This study aims to investigate whether the rental regulation in Gothenburg fulfill its purpose, by comparing difference in terms of rent levels for three different types of contract. The first one is owner occupied cooperative apartment that require a membership in the cooperative. An owner occupied cooperative apartment can be sold at the housing market and the owner buys a share of the cooperative, and the right to use the apartment. The second contract type is rental apartment, which is a regulated market. The third is secondary rental apartment contracts which is regulated but also exists on the black market. The results from this study shows a significant difference in monthly cost for apartments depending on area and contract type in Gothenburg. The results indicate that the rent for apartments on the primary market is significantly lower than the other contracts, indicating that the regulated primary rent is below the equilibrium rent. This cause problem in form of a growing black market, discrimination and a trend to convert rental apartments into owner occupied cooperative apartments.