Cooperation needed to cure the housing shortage

Wednesday 13 April 2016

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We have known about the background to today’s housing shortage and the declining attractiveness of cities for quite some long time. If our cities are to have good and attractive living environments, we need cooperation, coordination and more efficient systems to increase the housing stock.

The housing shortage is a threat to growth, business recruitment and the attractiveness of cities. The causes include legislation, shortage of capital and vague processes. To address this issue the Royal Swedish Academy of Engineering Sciences (IVA) is starting a project called “Good Cities of the Future” in which it will work with various housing policy players to help develop more efficient systems.

Sweden’s cities are growing. In 2015 Sweden’s population grew by more than 100,000 according to statistics from Statistics Sweden (SCB), and in 2016 there will be even more of us. The majority of the additions live in or will move to the cities.

The equation does not add up Our cities have a shortage of housing for people who are, for example, planning to study or work in the growing service sector. The housing shortage is also a problem for companies that need to recruit specialists. A new study from the Stockholm Chamber of Commerce shows that one in five businesses in Stockholm County are unsuccessful in recruiting due to the housing shortage. The housing equation does not add up and it is threatening growth and the attractiveness of Sweden’s cities.

There are several factors behind today’s situation, all of them having an effect on the housing stock.

Following the abolition of the housing subsidies there has been a shortage of venture capital and, consequently, that the main types of housing being built are cooperative housing units (bostadrätter), which are ultimately financed by private individuals.

New municipal reporting requirements in the law regulating public municipal housing companies (2010:879) force companies to operate along commercial lines. The National Board of Housing, Building and Planning has determined that the selling of homes in the public housing sector could also be a consequence of the new legislation. Some homes are being sold to finance renovation of the remaining homes which are then rented out at higher rates. Many municipalities are struggling with financial problems, making it more difficult for them to invest in new residential areas. A concrete example is that municipalities are selling municipal land to fund for their investments, and the result is the construction of primarily cooperative housing units.

Confusion and delays Since the introduction of the Planning and Building Act (PBL), the county administrative boards have been gradually increasing their involvement in the planning and building process. Municipal officials have a responsibility to drive the planning process forward, but uncertainty about the actions of the county administrative boards leads to confusion and often delays. This often results in additional conflicts of interest and delays, which in turn leads to higher costs before construction projects get started. That the municipal authorities and county administrative boards work according to different principles and incentives makes today’s system too unwieldy to function efficiently.

Another factor contributing to the housing shortage is that today’s housing policy mainly stimulates new construction. But we know that, despite the relatively large amount of new construction taking place, it is in the existing stock where most of the country’s homes are found. This is where most people will have first home. Revitalising the existing housing stock is necessary to give young people a chance of finding housing. Based on these and other challenges, the Government, with Minister for Housing Mehmet Kaplan (MP) leading the way, has invited the opposition to discuss housing policy for the future. We welcome this initiative.

Cooperation is crucial IVA is starting the project Good Cities of the Future to provide expert input to help promote the development of attractive living environments. We believe that the emphasis must be on cooperation and leadership across boundaries, involving all sectors of society. By sharing knowledge and looking at good examples, the project can create a bridge between the various housing policy players and improve system efficiency.

Björn O. Nilsson, Professor, President, Royal Swedish Academy of Engineering Sciences (IVA)

Gabriel Urwitz Chairman, Good Cities of the Future

Ulrika Francke Chairman, IVA Division III Building and Construction 

 

(Article in swedish from Göteborgs-Posten, 13 April 2016)


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