Almost Perfekt: How Sweden Works and What We Can Learn from It by David Crouch

Author:David Crouch [Crouch, David]
Language: eng
Format: epub
Tags: Non-Fiction, Politics, Economics, History, Sweden
ISBN: 9781788701556
Publisher: Blink Publishing
Published: 2019-12-15T00:00:00+00:00

Chapter 19

Homes

The housing market does not work. Our employees cannot find anywhere to live.

Fix it, or we will quit Sweden.

This was the blunt message to the government from the founders of Spotify, Daniel Ek and Martin Lorentzon, in the spring of 2016. They were trying to recruit young talent to Sweden from all over the world, but the acute shortage of rental accommodation meant moving to Stockholm was unattractive. ‘Compare it with cities like New York, London and Singapore where the opportunity to rent housing is very simple,’ Ek and Lorentzon wrote. ‘We are therefore forced to note that if no changes occur, we need to consider expanding more into other countries instead of Sweden.’

A few months later, Sweden’s Housing Board issued a bombshell estimate of how many new homes the country would need if demand was to be met: 700,000 new homes by 2025. This would mean a rate of construction not seen since the 1970s – ‘totally different’ to the pace of house-building over the past two decades. Adding to the urgency was unexpectedly high immigration.

The housing crisis in Sweden had been growing for years, but the surge of new arrivals moved it up the agenda. For young Swedes, the idea of securely renting or owning their own home had become a disappearing fantasy. According to the Tenants Union, in 2017 almost a quarter of young people in their twenties were still living with their parents, while a similar number were subletting or renting a room. More than half Stockholm’s population – nearly 600,000 people – were registered in the queue for a coveted rental apartment, because the tightly regulated rental market meant that rents were relatively low. Getting to the front of the line in central Stockholm took 20 years, while in suburbs like Husby the waiting time in 2016 was more than a decade. Some who lived in overcrowded accommodation were able to jump the queue, but there was no system of prioritising key workers or people in desperate need of a roof over their heads. Rents in new-build apartments were significantly higher because construction companies had been exempted from rent controls; low rents often meant properties required renovation and repair.

The result was a thriving rental property black market, with large bribes changing hands to obtain a home. Many tenants exploited the situation by subletting space – when someone advertised a tiny closet in their apartment, there were many applicants. ‘It is almost impossible for immigrants and new arrivals to penetrate this market – it is all about who you know and how much money you have,’ said Billy McCormac, head of the Fastighetsägarna property association. Refugees alone would need nearly 40,000 new homes per year in 2015 and 2016, the Housing Board said. Meanwhile, the high demand for homes coincided with cheap loans to produce a house-price bubble – property prices had risen sixfold in 20 years, with homeowners taking on colossal levels of debt. The ratio of household debt to disposable income soared to become one of the highest in the world.

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