From Thomas Sowell’s book Basic Economics:
Rent control had very much the same effects in Sweden. As of 1940, there were approximately 6,330,000 people living in Sweden and there were about 1,960,000 dwelling units to house them-about 31 housing units for every 100 people. Over the years, the number of housing units rose relative to the population-to 36 units per 100 people in 1965 and 43 units per 100 people by 1973-and yet the average waiting time for getting a place to live also rose. There was a 9-month wait in 1950, a 23-month wait in 1955 and a 40 month wait by 1958, for example. In short, the longer waits for housing was not due to any less housing in proportion to the population. There was a lessening scarcity but a growing shortage.
As incomes in Sweden rose much faster than rents were allowed to rise under rent control laws, more and more people could afford to occupy their own independent housing units, making it harder for others to find places to live, even with a massive, government-sponsored program to build more dwelling units. Before rent control, less than one-fourth of all unmarried adults in Sweden had their own separate housing units in 1940, but that proportion rose until just over half did by 1975. Not only was the actual physical amount of housing no less than before, Sweden was in fact building more housing per person than any other country in the world during this period.
Nevertheless, the housing shortage persisted and got worse. As of 1948, there were about 2,400 people on waiting lists for housing in Sweden but, a dozen years later, the waiting list had grown to ten times as many people, despite a frantic building of more housing. When eventually rent control laws were repealed in Sweden, a housing surplus suddenly developed, as rents rose and people curtailed their use of housing as a result. Again, this shows that “shortages” and “surpluses” are matters of price, not matters of physical scarcity, either absolutely or relative to the population.