Accommodation a Big problem in Sweden

If you already live in Sweden, there are chances you are already acutely aware of how difficult it can be to find somewhere to live. You may also be aware of it if you didn't experience yet. In the last few years, the term "housing crisis" has become closely associated with the Nordic nation, in particular, though not limited to capital city Stockholm. But just how did the situation occur in the first place, how bad is it really, and are there any indications that it will be fixed?

Complaints about the difficulty of finding somewhere to live in cities like Stockholm or Gothenburg or some small cities like Karlskrona are nothing new, but these days Sweden's housing shortage is seen as a nationwide problem. According to the country’s National Board of Housing, Building and Planning (Boverket), 255 of Sweden’s 290 municipalities now report a housing shortage. That's the highest amount since the agency started recording figures in the area.

In the two years between 2015 and 2017 alone, the number of municipalities reporting shortages increased by 72, and for the most part the negative trend isn't predicted to change in the near future. At the current rate of production, only 44 of the 255 with a shortage will exit from a shortage situation within three years.

So how did Sweden arrive at its current situation in the first place?

The reasons are up for debate, but what the experts The Local spoke to generally agreed on is that the problem has been decades in the making – a housing crisis doesn't just happen overnight, after all. Most said the roots can be found in the early 1990s, at a time when Sweden was hit by a severe credit crunch.

"Some regard the main cause as the retrenchment of the state from the housing question, others regard the state interventions as the cause," Malmö University’s Martin Grander, whose research specializes in housing and housing inequality, told The Local.

"The truth is probably found somewhere in between. Incremental changes in policies, legislation and development since the 1990s have made it beneficial for households to own their house and for housing constructors to construct a certain type of housing: villa houses and cooperative-owned flats (known as bostadsrätter in Swedish). It has become less beneficial to construct affordable housing meanwhile, and rental apartments, if built, are directed at high-income households," he added. Until the early 1990s, state subsidies aimed at stimulating housing production meant the rate of construction was high, Boverket's analysis department explained to The Local in a meeting at their Östermalm office in Stockholm. And even when a credit crunch hit that decade and building inevitably slowed, moderate population growth meant the impact on the balance between housing stock and demand wasn’t immediate – instead, it was a slow burner.

In Sweden, municipal and state-regulated rental companies are prevented from charging tenants above a certain price level, but a shortage of those kinds of properties and fewer of them being built means private owners have the opportunity to charge excessively for so-called "second-hand" leases. In theory there are also rules regulating how much private landlords are allowed to charge, but in practice, considering the competitive housing market, few tenants dare to question high rents.

The cost of those leases in turn encourages people to opt to buy a home instead, helping to fuel the seemingly never-ending increase in the cost of buying property in places like Stockholm and Gothenburg in particular. Supply and demand.