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Housing Shortage Puts Pressure on City

Published måndag 21 juni 2010 kl 15.05

Finding a place to stay is one of the biggest problems newcomers to Sweden face - as there is a severe shortage of rental accommodation in most major cities, and particularly in the capital.

To tackle the problem, Stockholm city council is planning denser housing developments, not only in the city centre but in the leafy near suburbs.

But those plans are opposed by some local resident groups who are gearing up for a fight.

Eric Paglia  is one of the leaders of a residents’ group in Midsommarkransen, in southern Stockholm, concerned about quality of life being sacrificed in favour of big building projects.

"What we're against is building at all costs. Often city planners do not necessarily value the things we value," he said.

"Like conservation and green values - there's not a lot of green space left around here and every one of those that gets filled in is a space we won't get back.

Brownfield sites

Kristina Alvendal, the city councillor responsible for planning and building in the capital says there is no choice but to build the city outwards as there simply is not enough space in the centre and more high rise developments in the city’s outskirts are not an option.

However she says that sustainability will be at the forefront of the new developments.

"What has been lacking until now is a strategy so that we can develop Stockholm and keep the unique things like the green areas and the water," she said.

"The new strategy is to idenfity unused areas and brownfield sites, near the city that have been left unused."

Joining the city to the suburbs

Sweden’s cities still bear the legacy of a major building drive in the 1960s and 70s, - the so-called “million programme”, which led to a million – many high rise – apartments being built in far flung city suburbs.

Supporters of the current plans to connect those areas with Stockholm city centre - by building in between them - say that that it would be more environmentally friendly that the current situation where a large proportion of Stockholmers commute long distances.

"Four in five people in Stockholm live in the suburbs, which makes the pressure on the inner city extremely high. We've seen now for the last 25 years how every single empty lot has been built up and now there are not empty spaces left," explained architect Ola Andersson.

"But just outside the inner city there is vast amounts of unbuilt land. So what needs to be done is to extend the inner city and offer opportunities for living in new parts of town."

Mismatch in the market

Last year the Stockholm region grew by more than 30,000 but in the last few years less than 4,000 apartments were built on average each year.

Yet stepping up the building and making a Stockholm bigger, more densely populated city may do little to solve the housing shortage.

It’s not only a problem that too few apartments and houses being built.

In the Swedish housing system, the monthly charges for privately rented apartments are set in line with social housing which makes it unprofitable for developers to build them, says Prof Lena Magnusson Turner at Uppsala University’s housing and urban research institute.

So instead they build apartments for sale not for rent, and at prices many cannot afford.

"A lot of constructers say they cannot build at a price that people can afford to pay," she says. "Most of the buildings built over the last decade are for sale but the demand is for rented dwellings at an affordable price. So there's a mismatch between suppy and demand in Sweden."

Turner says the Swedish model treats real estate as a social good rather than an investment.

She says the approach has succeeded in providing a decent standard of accommodation for most of the population.

But the fact that it prevents private individuals from buying apartments to rent out for profit has created a black market and aggravated the current housing shortage.

She says the solution may lie in a current government proposal to make it easier to sub-let properties.

"It might actually be the case that we have no shortage of dwellings."

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