The dilemma is illustrated by the case of 14-year-old Amir, who arrived alone in Sweden in the fall of 2014 as a young refugee.
Amir, not his real name, was suppose to live in the municipality of Kumla though authorities there paid to have him put up some 200 kilometers to the east in Uppsala municipality instead, since there was no room in Kumla at the time.
Now, Kumla municipality is seeking his return and fighting Amir in court over the decision.
Amir told Swedish Radio he feels at home in Uppsala and doesn't want to start anew in Kumla.
"I go to school, I have made friends and play football," he said. "But one day my social worker came and told me that I had to move to Kumla, but I do not want to move to Kumla."
Amir has appealed the decision with the help of a guardian and won. But Kumla municipality is still fighting the decision.
A law came into effect in last year that can force municipalities to accept unaccompanied refugee minors since several municipalities had complained that they were accepting the majority of refugee children while other councils in Sweden took in little or none.
However, municipalities can still pay other areas to place a child outside their care. Last year, more than 35,000 unaccompanied minors applied for asylum in Sweden.
Kumla's head of social welfare Annelie Koivuniemi said the municipality wants Amir to live where his asylum case is registered with the Swedish Migration Agency.
"Our ambition is that when the Migration Agency places a child or young person under Kumla municipality's care, both for their asylum case and for maybe years to come, that we handle that if we can," she said.