Sweden's housing shortage from a builder's perspective
A government agency claims that Sweden needs to build 700,000 new homes in the next decade to keep pace with demand. That would require builders to double the rate at which they make new homes. Is that possible?
Last year, the rate of which new homes were built in Sweden increased by 26 percent compared to the year before. But it still only meant that some 45,000 homes started being built, which falls far short of the National Board of Housing and Planning's target.
And it is not just in the big cities that there is a problem. Earlier this week, Swedish Television reported that there is a lack of housing in 250 out of 290 municipalities.
Exactly who or what is to blame for the shortage this time has been part of a blame game over the years. What is new now is that everybody agrees that for years, too little was being built in relation to the growing population, and this has become even more urgent with the increased immigration that we've seen recently.
And it seems there is now a new sense that there is no time to lose. At the beginning of the month, the government sat down with the opposition parties in the Alliance and with the Left Party for a first round of talks, aimed at reaching a political agreement before the summer on what needs to be done.
Henrik Landelius is the head of building at the one of Sweden's biggest construction companies, NCC. He says it is going to be tough to reach the target.
"Let me put it this way: It's twice the speed of what we are doing today," he says.
So what needs to be done, to get more houses up, faster? Henrik Landelius says it is not so much money as a simplified planning process. Clearer, more uniform planning rules, with fewer local exceptions is high on the wish list.
"When we get to build bigger projects, it is easier to keep the costs down. Doing a plot, two plots and perhaps have to un-establish a production site in between costs a lot of money," he says.
The construction industry is also hoping for more flexibility in the building regulations, which Landelius says are more strict here than in Germany for example.
Landelius also talks about the need to increase mobility between the existing properties. Today people who sell their house and flat have to pay taxes on their profits of the sale. You can postpone some of that if you buy a new place, but not all of it and you have to pay interest on that. The lobbyists call it a "tax on moving" and the fear is that this is stopping people from downsizing, like an elderly couple who really want to move somewhere smaller, but feel they can't afford to, so they'd rather stay, while meanwhile families with children cannot find that bigger flat or house.
This week, Radio Sweden's podcast is on the housing shortage and how it affects people. You can listen to it here.