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housing crunch

"Only the state can ensure a housing boom"

Published onsdag 22 augusti 2012 kl 18.27
A file photo of a section of the original Million Programme housing in Masmo outside Stockholm. Photo: Fredrik Persson/Scanpix

A Stockholm professor has waded into the housing crunch debate by suggesting that a new "Million Programme", similar to the state-financed construction spree after the Second World War, can solve the capital's and other large cities' problems.

The state would again have to step in, this time as guarantor for housing loans, argues Hans Lind, professor of housing market economics at the Royal Institute of Technology (KTH).

Construction prices would be kept low by building further away from the city centre, suggest Lind who also says that potential buyers should be exempt from the market's current demands for a deposit to secure a loan.

"That buyers have the income to repay their mortgage is more important than the deposit," says Lind.

"There are risks involved in a project of this size so I don't see any other market actor other than the state that could shoulder the responsibility," Lind tells Swedish Radio.

His proposal was immediately rejected by Stockholm politician Joakim Larsson, whose policy portfolio at city hall includes the outer suburbs.

"Hans Lind often has wise suggestions but this one doesn't sway me," Larsson tells Swedish Radio.

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