Owner-occupied flats coming to Sweden

Sweden has taken another step toward owner-occupied apartments, with the government proposing the type of housing be introduced on May 1st, 2009.

• One-third of Swedes want to live in gated communities: study (24 Oct 08)
• Can they stop me renting out my flat? (26 Sep 08)
• Swedish apartment values still slumping (16 Sep 08)

Currently, nearly all apartments in Sweden are purchased through cooperative housing associations (bostadsrättsföreningen).

Rather than purchasing an apartment outright, buyers instead purchase a share of the association, an asset which then gives them the right to live in a particular dwelling.

The association maintains actual ownership of the apartment, as well as the building’s common spaces, grounds, and physical structure.

The system allows housing associations to set certain restrictions on the rights of the tenant-owners who have purchased the right to live in a particular apartment to modify or sublet their dwelling.

But in a proposal sent to the Council on Legislation (Lagrådet) on Tuesday, the government has proposed changes to current laws which would allow people to purchase apartments outright rather than through a cooperative housing association.

The new law would give buyers of owner-occupied apartments (ägarlägenheter) rights similar to those currently available to people who purchase a house, including the option to sublet and ownership of the title to the dwelling.

“It gives those who have an owner-occupied apartment a few more options for making decisions about their own dwelling,” said justice minister Beatrice Ask to Sveriges Radio.

The government believes that by broadening the range of available housing options and by increasing owners’ influence over their homes, the new rules on apartment ownership will contribute to increased housing production and make more apartments available for rent via subletting.

“I can imagine that in the long term it may mean that more resources will be devoted to housing which will also give us more apartments overall. I think that’s a good thing,” said Ask.

Initially, the new law will only apply to new production, although the government indicated it may also explore the possibility of converting units in already existing buildings into owner-occupied apartments.

The proposal will now be reviewed by the Council on Legislation, after which it will be presented to the Riksdag.