Area income, construction year and mobility of renters in Sweden: two hypotheses about the impact of rent control

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.