Tuesday, July 5

Why did the rental price bring down the Swedish Government?


Correspondent in Berlin

Updated:

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The price of rents in Sweden has been regulated since after the Second World War, which has extremely discouraged investment in construction. Neither new houses are built nor existing ones are improved, so that to access a flat there are waiting lists of an average of 20 years of which approximately half a million Swedes form part. Flats are cheap but there aren’t flats for everyone. The state offers modest “hyresrätt” public housing for rent in perpetuity, the price of which has risen only 19% in the last decade, albeit above the CPI, which has risen 12%. But this model is only satisfactory for those who have already accessed one of these homes, who constitute a privileged caste compared to those who cannot access any because the system only works if the State offers as many homes as there are family nuclei. The Social Democratic Party, which has ruled Sweden for practically the entire last century, proposed the “Million Homes” (Miljonrogrammet) program 50 years ago, which involved the construction of 100,000 euros per year, but he could never fulfill it.

In the 1990s, Sweden suffered a serious housing bubble that paralyzed construction for a decade, which has coincided with a moment of demographic takeoff. Currently, 255 of the 290 Swedish municipalities suffer from a housing shortage and access to the ‘hyresrätt’ is impossible, leaving only the option to buy or become part of a ‘bostadsrätt’, block building cooperatives that allow access life to a home that can be transferred or assigned, but not sold. They became very popular during the previous crisis, in which the Swedish state had to get rid of blocks due to the financial crisis, but they require a large personal investment that not everyone can afford and that can never be recovered by the ban on the sale. . Thus, in Stockholm there are 580,000 inhabitants signed up to waiting lists and the rate of home deliveries reaches fifty years in the future.

Until before the pandemic, housing was a serious social problem in Sweden, but the economic depression left by the pandemic makes it a development problem. The OCE has warned the country that rent regulation has an impact on the efficient functioning of the real estate market and that it is blocking investment and maintenance at a time when sectors cannot be isolated without participating in the recovery drive. . In his report ‘Brick by brick. Building better housing policies ”, recalls that housing is“ a basic human need ”and that it is a crucial issue for human well-being. And he cites some processes that are putting it into question, such as “the failure of the housing sector to provide enough homes where demand is strong, such as urban areas rich in employment.”

In response to this situation, the Löfven government of Social Democrats and Liberals was preparing a new law that freed the price of newly built homes, to unblock the situation and allow higher rents to access a higher price to homes in better condition, given that current homes, without maintenance for decades, leave much to be desired. But he ran into opposition from the Left Party who has insisted that cheap rents are an inalienable pillar of the Swedish welfare system and has withdrawn its support for the minority government, leading to a government crisis still in the process of being resolved. To overthrow Löfven, with the excuse of safeguarding cheap rents, they have voted a vote of no confidence together with the conservatives and the extreme right, who for their part propose solutions to the housing problem that are far more radical than Löfven’s.

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