While an increase in building is a step in the right direction, policy makers need to be very careful in order to avoid a crash in prices that could have drastic consequences for the country’s economy. The building of houses and flats has failed to keep up with the pace of population growth. A precursor to the politically powerful Swedish Union of Tenants — or Hyresgästföreningen — organized one of Europe’s first rent strikes in 1916, after residents of Nynäshamn, a town south of Stockholm, complained of cockroaches, lice and bare earth floors. Whether the ramped-up construction will be enough to combat shortages and a growing population, though, is another matter. Latest news, analysis and comment from POLITICO’s editors and guest writers on French politics. Facts about Stockholm Loop in ten points: 1. Latest news, analysis and comment from POLITICO’s editors and guest writers on German politics. In addition, a change in tax rules meant it was cheaper and therefore more attractive to buy a house. Of the city's roughly 4.5 million square feet of empty commercial space in the mid-2000s, about 2.5 million has been turned into housing and hotels, according to … Introduction Based on current research ‘cohousing’ is defined as housing with common spaces and shared facilities (Vestbro, 2010). From Los Angeles to Stockholm, from Berlin to Barcelona: rental prices are skyrocketing in most of the World’s biggest cities. Explore the live extension of our journalism, The wonk's survival guide to the EU Green Deal, February 4-5 — POLITICO's 2021 EU Studies & Career Fair, French proposal to buy a new EP building in Strasbourg causes outrage, UK’s spending review to conclude November 25. Only four municipalities reported a surplus of housing, and of those which said they had sufficient housing to respond to the need, the largest was home to 60,000 people. Sweden’s housing problems were not created overnight. It was another step in Sweden’s ambition to serve its citizens from cradle to grave, with the aim for everybody in the country to be able to live in a nice home for a reasonable price, regardless of their income. Sweden’s unusual system for pricing housing is based on a key statistic called “utility value” — a calculation that bases a home’s value not on what the highest bidder would pay to rent it, but on characteristics like its size, design and location. Inevitably, at the same as the rental market seeing the consequences of housing shortages, there have also been increasing house prices. The most severe aspect of the global housing crisis by far is the housing situation faced by some 850 million people —more than the populations of … “What is important is that we remain open-minded and do our best to ensure that we have a fair and efficient system for housing,” König Jerlmyr added. It represents hope for the future of Stockholm’s housing market, which has been going through a crisis for the last few decades. Stockholm was nine years, with that number increasing to 14 years in the inner city (Börjeson and Runfeldt, 2017; 56). Last year, the National Board of Planning and Housing said housing equivalent to a new Stockholm must be built every five years. The shortage is leading to record home prices and a homebuilding boom as cheap credit lures consumers, unable to find affordable rental properties, into the housing market. Swedish public housing companies. Another theory is that it is not in the best financial interests of big construction firms to build more apartments and houses, as more supply would lower prices and thus their profitability. Of that number, 30,450 were apartments, which represents a 24 per cent increase compared to the same period last year. Stockholm looks particularly stretched… He previously worked across radio, TV and online for the BBC, which he first joined as a journalism trainee. “This is a big step forward for Berlin tenants, who will now have some breathing space,” said Berlin Mayor Michael Müller in mid-October. There is an acute shortage of housing in Sweden as more than 700,000 new … There is an acute shortage of housing in Sweden as more than 700,000 new homes need to be built during the coming 10 years. The utility system has successfully kept rents low for coveted “first-hand” rental contracts, in which the tenant deals directly with the property’s owner. “It is not what a vulnerable person with nowhere to live can be forced to accept.”. The debate in Stockholm is being watched closely outside Sweden, as city governments throughout Europe search for ways to curb spiraling housing costs. At a recent meeting of the central Stockholm branches, a rent negotiator for the union, Käthe Eklund, rallied members by telling them property owners and lobbyists were trying to replace “‘utility value” with “market value.”. This week, Stockholm’s intensive … Those problems will not be fixed quickly, with even the current construction boom unlikely to alleviate the problem. Having said that, something a bit more sinister could loom around the corner. There is a correlation between the rise in house prices in a municipality and how the population has increased. The construction of more than 37,000 new dwellings began in the first half of this year – a 22 per cent increase on the same period last year. The problem is, that the queue for first-hand contracts now has more than half a million people on it – seven times the number 15 years ago – and the average wait time is now more than nine years. Your comment will be reviewed by the moderator for compliance with the Rules. The raw, crazy numbers: It takes over eight years to find a place in Stockholm. Last January, in a sign that Swedes may be readying for a change, the Social Democrat-led government and two centrist parties agreed to a limited program of property market liberalization, a move some worried was a first step toward dismantling the utility value system. Building has also not kept up with the pace of urbanisation and there are stories in the media on a near daily basis about the shortage of accommodation, particularly in Stockholm, which is one of Europe’s fastest growing cities. “It is not what a vulnerable person with nowhere to live can be forced to accept” — Käthe Eklund, rent negotiator for the tenants’ union, The tenants’ union is also mobilizing. “There are dangers that Sweden’s economic health could be too reliant on one sector of the economy.”. In this article, Mundus will examine how policy made decades ago impact today’s housing market, why more houses have not been built and whether the current construction boom carries any risks. “The rental model will be reformed by, among other things, free rent-setting in the case of new-build,” Prime Minister Stefan Löfven said at the opening of parliament in January. Now over 40 billion Swedish kronors are lost in business all because of Stockholm housing crisis according to Stockholm Chamber of Commerse. The problem is, that the queue for first-hand contracts now has more than half a million people on it – seven times the number 15 years ago – and the average wait time is now more than nine years. Sweden’s housing market has been a political battleground for over a century. Sweden is known for its generous welfare state; however, homelessness in Sweden is a rising concern. The investment bank predicts housing prices will fall 10%, and is worried that even worse could be in store if interest rates rise faster than expected. Over 300 companies, found in virtually all municipalities. Royal Institute of Technology, Stockholm and former chairman of the Swedish association Kol-lektivhus NU. The development shows that even countries with universal health-care systems are struggling to keep up with the Covid crisis. Footnotes and graphs are only available in the subscriber version of this article. Berlin recently enacted a five-year rent freeze in the city | Sean Gallup/Getty Images. She said her job is often to explain how the two “values” differ fundamentally and reiterate her organization’s support for the “utility” and resistance to “market.”, “I tell them ‘utility value’ represents the general tenant’s valuation,” she said. In the face of spiralling house prices, there has for years been a lot of talk about Stockholm’s current ’housing crisis’. Add more. Stefan Löfven’s government had pledged to build 700,000 new homes in a decade and the past couple of years have finally seen the increase in building that was so desperately needed. This combined with population increases, has resulted in earlier surpluses of accommodation in metropolitan areas disappearing. The price to rent from private owners has also been pushed up due to a change in the law in which tenants could be charged based on mortgage costs in their neighbourhood, as opposed to rent prices. The Raincoat – part of Raoul Wallenberg history, Housing crisis impact clearly on display across Swedish society. Owned by the municipality. Managed as limited companies. Epicenter Living – a solution for tech firms’ housing problems? Latest news, analysis and comment on migration in Europe and beyond. The debate in Stockholm is being watched closely outside Sweden, as city governments throughout Europe search for ways to curb spiraling housing costs | Agefotostock via Belga, Campaigning, lobbying and political influence in the EU. Latest news, analysis and comment from POLITICO’s editors and guest writers in Europe. Not surprisingly, many areas gained a bad reputation and some, including the likes of Rinkeby and Rosengård, have become so stigmatised that many of the same comments that one would have heard thirty years ago still persist today. Consequently, vacant flats began to be common in many of the new areas created as part of the Million Programme. Right-leaning lawmakers and a raft of economists say Sweden’s current system of restricted rent increases and expansive tenant protections has sparked an acute housing shortage and is unfair to many tenants unable to get a rent-controlled contract. The rent is capped, with the average cost of renting an apartment in Stockholm around SEK 6,500. Rather than hand over their monthly rent checks, the tenants placed them on deposit with town officials, who agreed to hold the money until landlords improved the dwellings. Learn more about editorial content presented by outside advertisers. In total, they succeeded in building 1,005,578 homes during that period – a figure that represented a substantial increase in Sweden’s housing stock. It has been difficult, however, to prove this claim. New construction was identified as a sector where rents based on market value could be applied. Stockholm has been dealing with a shortage dating back as early as the 1960s due to a massive migration to the suburbs, reported the New York Times . First-hand contracts are strictly controlled, however, requiring renters to wait their turn in a public registry. Latest news, analysis and comment on security in Europe and beyond. He has also written and reported for the Associated Press and ESPN and worked for the British government from its embassy in Stockholm. Demand is such that it is almost impossible to get a direct contract. At the end of 2017, nearly 600,000 people were registered in the housing queue for Stockholm county (Bostadsförmedlingen, 2018). Campaigning, lobbying and political influence in the U.K. Last year, the Riksbank put out a paper saying it did not think house prices in Sweden were overvalued, but the high valuation of Swedish homes would only be sustainable if real interest rates remained low for the foreseeable future.34 In its analysis of the Swedish economy earlier this year, the OECD said a debt-financed housing boom had created vulnerabilities in the economy35. Thank you! Left-leaning Swedish lawmakers and tenants groups say dialing down rent controls would push lower earners out of Stockholm and threaten the country’s prized ideal of social equality. In an analysis from 2015, the Riksbank outlined several. This article is produced with full editorial independence by. Should the couple need a a bit more space — a baby arrives, or your deadbeat brother “just needs a place to crash while he figures a few things out” — rents for first-hand properties rise modestly, to 6,525 Swedish kronor per month (€610) for a two-bedroom apartment. Latest news, analysis and comment on elections in Europe and beyond. Substantial ”lock in” effects. The average monthly rent for a one-room apartment in Stockholm, of the sort a young couple might live in, is an affordable 4,910 Swedish kronor (about €460), according to the national statistics agency. Supporters of Sweden’s current system have reacted strongly to the attempt to chip away at rent controls. “That is not fair, I’d argue,” she said. Young people and those who had recently arrived in Sweden were among the most severely affected by the shortage, according to Boverket, but it did note there had been "a sharp increase" in the amount of student … Demand is gradually improving With more opting to shop online and work from home, Sweden is looking at commercial lots emptied by coronavirus to solve the chronic housing shortage STOCKHOLM, Dec 23 (Reuters) - … In order to deal with the population growth, the Stockholm Chamber of Commerce, in its new report; is proposing the construction of 22 new subway stations – with the potential of providing 200,000 new housing areas. Swedish Left Party leader Jonas Sjöstedt said he would seek to remove the government if it moved to introduce market-based rents. While queuing for the right to rent “first hand,” many Swedes live in “second-hand” properties — sublets. If you do not have a login you can register here. “As always, policies need to be updated as societies change.”. 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