In summary, it's largely an issue of supply and demand. Not enough new homes are being built in the city to meet the need. Add to that comparatively easy credit, and prices keep going up and up.
Different countries are trying a range of solutions. The Netherlands, for example, has tightened credit and tax rules for mortgages. The UK is working to re-purpose currently empty buildings into residential use through a public forum.
Sweden is taking another tack. I remember Annika and Olle telling me about a change in the law this summer, allowing structures of 25 square meters to be built without planning permission. I hadn't thought much about it; after all, I have my guest house already, and the previous rules allowed structures up to 15m2.
The Economist straightened me out, however. These new structures, referred to as an Attefallshus, is the government's response to the housing shortage. They're just the right size to serve as a guest house or a mini rental property. A landowner could put one up in their garden with little trouble, providing quick housing to the rental market.
I found a company that specializes in these little houses. Enkelrum (English translation) provide a range of finished homes that can be dropped in, complete and ready for living, with a crane. They are nice looking little places.
We've already been thinking a bit about our guest house. It is 20m2, so a bit smaller than these houses, but still a good size. Essentially it is just a bedroom now. I think, with a bit of reshuffling, we could install a mini-kitchen and carve out more living space. If we find ourselves with more long-term guests, it would be a good project for the future.
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