Housing reform would ‘force 50,000 to move’

The proposal put forward by a state inquiry into Sweden’s housing market would most affect people with low incomes, claims the head of the national tenant association.

In an article in the Dagens Nyheter (DN) newspaper, Swedish Union of Tenants (Hyresgästföreningen) chair Barbro Engman writes that every fourth tenant household in attractive parts of Stockholm, Malmö, and Gothenburg consists of low income earners.

“In reference to middle incomes, it’s been said that the inner city population consists of nothing but middle and high earners. But that doesn’t fit if you look at rental tenants in the inner cities,” she writes.

“The inquiry claims that income levels in those areas where rents are going to be raised as a consequence of the proposal are so high that only a small number of households will be affected. This is wrong.”

If the inquiry’s proposal is carried most of these households – more than 50,000 according to Engman – would be forced to move.

She points to an analysis carried out by the tenants’ union using figures from Statistics Sweden as evidence for her claim.

“With the inquiry’s proposal, attractive parts of cities will be closed off to those with low incomes. Can we afford this in a country which is already fighting with ever more pronounced segregation and with the social tensions that come with it?” writes Hedman.

But an expert on Sweden’s housing market explained that the issue of how best to move forward with reforms isn’t so simple.

“It’s like choosing between the plague and cholera,” said Stellan Lundström, a professor in building and real estate economics at the Royal Institute of Technology (KTH),to the TT news agency in reference to the inquiry’s findings.

Entitled “The EU, the public good, and rents”, the report, which was released in April 2008, looks at possible changes to the Swedish housing market affecting both rental apartments as well as apartments for purchase managed by larger housing corporations.

The proposal has led to an ongoing debate about how to best organize Sweden’s unique utility value-based system for allocating rental housing, which relies on rents set by collective bargaining.

“On the one hand, it’s totally clear that if you implement a more market-oriented setting of rents, the rate of tenant changeover will increase. In inner-city Stockholm, among other places, there isn’t any changeover because of low rents. It’s impossible to move into the city from the outside,” said Lundström.

“On the other hand, if you do nothing, the entire rental stock will soon be turned into apartments for purchase (bostadsrätter). If you want to retain the current system with the common way of setting rents, there soon won’t be any rental apartments left in the inner city.”