Municipal housing money can end up feeding criminal gangs
Maintenance support paid out by municipalities to help newly arrived immigrants with housing costs is sometimes winding up in the wrong hands, according to a new study by Boverket, the National Board of Housing, Building and Planning.
Sweden's housing shortage coupled with a black market for rental homes, means that some of the money is going to criminals.
Micael Nilsson, an investigator with the agency, tells Swedish Radio News that municipalities often have little choice when providing means for housing, and that it costs more to pay to house people in a hostel or hotel than it does to pay an allowance.
Nilsson says municipalities turn a blind eye on the problem and grant maintenance support (förörjningsstöd), and in the worst case, criminal gangs or groups are behind apartment rentals. In those cases, taxpayer money is being used to benefit criminal powers, Nilsson adds.
The agency has interviewed people from the Swedish Public Employment Service, the Migration Agency, several municipalities and newly arrived immigrants, themselves, who have talked about the black market for housing.
This black market for housing is described as an organized activity in which people make a living by selling rental contracts, and illegal subletting contracts are used to charge extra rent.
Marianne Olsson, district director of Angered in Gothenburg, where many asylum-seekers and newly arrived immigrants live, tells Swedish Radio News that she understands this to be a regular occurrence, and that people can end up paying more than double the actual rent of their apartments.
According to the Swedish board of health and welfare's guidelines, social services are not supposed to check subletting contracts. It can happen that municipalities pay out maintenance support for housing and other costs, despite the social welfare secretary realizing that it will go to black market contracts.
"Yes, that's how it can be," says Olsson. "We're acting on the basis of the Social Services Act. There are people who have the right to receive help from us, when it comes to paying the rent. So we judge whether this rent is reasonable, in relation to the size of the family, etc."
Åke Pettersson, head of section within the social service center in Råslätt in the municipality of Jönköping, also talks about the problem:
"We see it often. We have no better alternative than to put people up in a hostel or hotel, and that is not cheaper," he says.
Marianne Olsson believes that in many cases, organized crime is behind the black market contracts.
"It's quite simply what we hear and see in the district that makes us suspect it, without being able to verify it. It's a problem in itself that a black market has been created that actually feeds criminal networks. But the underlying problem is the housing shortage," she says.