Housing for all – in a Swedish context
Housing for all is on the agenda worldwide. While in many countries the main problem is still to deliver a roof, water and electricity to everybody, one of the main problems in Western Europe is to provide enough housing in the growing regions. The City of Gothenburg, located in one of Sweden’s growing regions, is currently challenging the established systems with the aim of providing housing for all, not only for those who can pay.
Since the mid 90-ies the Swedish housing sector has been one of the most market-oriented in Europe. By then the national government stopped subsidising the housing sector and left the field open for the market to provide housing. For the following twenty years housing has not been on the political agenda. Over the past ten years we have seen an increasing demand in the growing regions, mainly in the capital Stockholm, but also in Gothenburg and Malmö, the second and third largest cities in Sweden. The price of condominiums and houses follows demand, with the effect that young people and low income groups have difficulty in finding a permanent place to live. This is not only a social problem but also hampers economic growth.
Social housing is a concept that could provide housing for those who cannot afford what the market provides. However, Sweden is one of three countries in Europe that has not applied for an exception from the EU legislation on ”services of general economic interest” (SGEI). Therefore subsidies in social housing are not possible today. The concept of social housing has also been rejected for decades by the political majorities. In 2011 we got new legislation that states that the public housing sector has to work according to the models of the private sector. The conclusion in a study (“Ett socialt blandat boende i Göteborg”) that was done a couple of years ago was that Sweden no longer has a system that guarantees housing for all.
In Gothenburg, the ambition is to develop new inner city environments in the old industrial and port areas along the river Göta älv. The RiverCity Gothenburg Vision, adopted by the City Council in 2012, states that we must create a city for everyone: “We should work to ensure that all citizens have the opportunity to live in the RiverCity Gothenburg area. Socially mixed housing creates a varied city life and a more interesting range of services. … A socially mixed population should be promoted by varying the range of housing through different forms of tenancy and size. … To pursue development, a test-bed for socially sustainable housing should be created within the area.”
Now, when the implementation of the vision in Frihamnen, one of seven huge development areas within the RiverCity, has started with a land allocation agreement, one of the main challenges for the selected developers is to provide rental housing with low monthly costs. The eight developers who were chosen out of the 65 applicants have all agreed to challenge the long established Swedish system of setting the level of the rent. It is today a utility-value based system: the rent in new housing should be based on the negotiated rent for similar housing in the surrounding areas. Now the developers have agreed to produce 25 % of the units at a rental cost of 1 000 SEK per sq.m. a year, another 25 % at 1 400 SEK, 25 % at the utility-valued level and the last 25 % with no restrictions at all (1 000 SEK equals 105 €).
Most property owners and developers claim that they need to charge 1 800-1 900 SEK per sq.m. a year for new developments. The Swedish Property Federation dislikes the idea of introducing a new system for setting the rents and argues that the proposed idea is illegal, while the Swedish Union of Tenants gives their support and claims that something has to be done in order to give broader groups access to new housing areas. The initiative has being followed by national media. The minister responsible for housing and urban development, Mehmet Kaplan, says that he is following the work in Gothenburg with the greatest of interest.
The question asked today is: will the City of Gothenburg manage to introduce a new system for the rental sector in Sweden, a system that provides new rental housing for all? Is the private sector willing to find new models when the government no longer are interested in subsidies? By 2018 we will know.