From public housing to affordable housing – the Gothenburg case
The Gothenburg waterfront will spread throughout the city center and potentially create stronger connections within the city and also reinforce the regional core.
The housing market in Gothenburg is in desperate need of more housing for the growing population. The city is segregated in all aspects of the word, and local politicians have adopted a strategy within the River City Vision to create a social mix in the city center. The inhabitants of Gothenburg are a diverse group of people with different economic status and preferences when it comes to housing. So when the city claims to build a new city “for all” – what does that entail?
The Swedish housing model is divided into renting or owning your home. Sweden has a municipal system for public housing and the city is responsible for the local housing supply. To achieve a housing supply though, the city turns both to public partners and the private sector. The line between private and public is blurred due to legislation aiming for open competition at the market. This means that the public rental homes are not to be confused with social housing. Public housing is not targeting any social group and it acts much like a private company on the market. Housing rents in Sweden today are determined by market parties without public intervention. This is done through collective negotiations according to a system of utility-value rents. Rent is suppose to correspond to the quality, standard and service of the apartment.
But Gothenburg has decided to do something innovative and challenge the market forces and current rules and regulations regarding rental homes. The area called Frihamnen, an old free port, in the very heart of the city needs to house a social mix of people in order to create a sustainable livable city center. The ambition to create conditions for a social mix of people leads us to the focal point: affordable housing. The process of creating a system for affordable housing in a context that lacks non-commercial housing is a challenge that needs innovative collaboration. What separates Frihamnen from the current system is that residential apartments with basically the same standard and location will differ in rent levels in order to open up the area for low-income households.
In Frihamnen we started with counting backwards; how much can a low-income household pay in rent each month? After that we set rent levels according to solvency and invited builders and developers to try and meet those levels in new production apartments. This means bending both rules and budgets but with a clear ambition to offer affordable housing for the diversity of Gothenburg’s inhabitants.
What we know about Frihamnen so far
- 50% of the apartments will be rentals and 50% sold off to home owners.
The rentals will be divided into four different rent levels:
25% will cost ~100 € (1000 SEK) per m2 per year
25% will cost ~140 € (1400 SEK) per m2 per year
25% will cost ~180 € (1850 SEK) per m2 per year
25% will not have a set rent level but can be used to balance income for the lessor.
- The developers in Frihamnen have agreed on finding financial ways to build new production rentals with the four different rent levels.
- The city has a system for distribute public housing called BoPlats which sets the criteria for applying for rental housing. BoPlats has a queue system where the person with the highest number of collected days gets priority. The applicant also needs to prove financial stability and registered income. This excludes certain groups of applicants.
A round table discussion with international expertise and best practice from around the world.
If the rent levels are met by the private developers and public housing – what system and criteria would we need to make sure that the apartments with the lower rent levels actually benefit low- income households in a positive way?
- What are the possible risks of introducing a new rent system for affordable housing in central Gothenburg?
- How can we create a long term and stable rent system that benefits both the resident and the lessor?
- Apart from rent levels, what other housing factors facilitates a social mix?