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'Stockholm has to fix its housing problem'

'Stockholm has to fix its housing problem'

Published: 20 Sep 2012 17:27 GMT+02:00
Updated: 20 Sep 2012 17:27 GMT+02:00

I read a recent piece in the Dagens Nyheter newspaper (also run on The Local) arguing that the government bureaucracy plays a large role in discouraging foreign talent from moving to Sweden.

In this article, the Swedish Institute (SI) argues that students, researchers and other skilled workers are an important part of Sweden’s economy, innovation and future; however, they are being held up by the bureaucracy of visas, taxes and rules.

While bureaucracy is no doubt a significant hurdle, I can think of another problem here in Stockholm that causes frustration and panic once these foreigners cut through the red tape: housing.

The student housing crisis in Stockholm has made the news quite a lot lately, but the incredibly tight rental market reaches farther than just students. All of these visiting researchers and workers Sweden wants to attract also have to find rentals as they settle in.

So what does it take to rent a place in this city? I can tell you it takes more than time and patience. These past two months, we got our own taste of the housing shortage.


Two years ago we arrived in Sweden assuming we’d just rent a place for a few years before made our Big Decision. Actually, we didn’t have that much of a choice— without a few Swedish tax years under our belt, the banks we checked with were reluctant to loan us anything near what we’d need to buy something in Stockholm.

We just didn’t think renting in Stockholm would be dramatically harder than in other cities around the world.

We had been warned by other expats that the rental market would be tough, and it was. We signed up for a couple of the housing queues when we first arrived and still haven’t heard back.

But since we were open to living anywhere in the Stockholm area, we eventually found a house in a great little neighborhood and settled in.


Just how lucky we were became much clearer when, this summer, just after signing onto another year in the house (and right in the middle of our vacation), we got an email: the family we are renting from wanted their house back.

Their overseas plans had fallen through, and they were coming back to Sweden. Now. How soon could we be out?

When we looked for housing two years ago, we were open to just about any neighborhood within a reasonable commuting distance to work. But now our family has settled in to this community. We have a school, daycare, friends and neighbours that we want to stay reasonably close to.

And to make the house hunt even more exciting, our move-out date is rapidly approaching. I love the fact that summer in Sweden is truly vacation time —generally speaking, things shut down, and many people get time off work. But this made finding a new place to live next to impossible.

After two months of replying to listings on Swedish buy-sell site Blocket and other rental sites, we have gotten only a handful of responses. One was from the owner of an absurdly expensive townhouse unable to get his asking price but unwilling to go down. Another response looked like this:

“I’ll only be in town for one day, so I want to make sure you’re serious about the place. If you want me to hold it for you, immediately deposit 7,500 kronor ($1,150) into my account.”

Hmm...We’re not that desperate. Yet.

I’ve heard friends blame the tight rental market on many things, including rent control, environmental concerns, geography and politics. But one thing they all agree on is this: the problem has been around for as long as they can remember. And it’s not likely to change any time soon.

Now, with the clock ticking on our current house and no prospects in sight, we’re suddenly faced with our Big Decision earlier than we were ready for: do we buy something here in Stockholm, or do we move back to California? Do we dare enter the notoriously difficult buyers’ market? I’m not even sure it’s possible to buy before our move-out date.

Every immigrant family we know has struggled with this same issue. If Stockholm wants to encourage the influx of visiting professors, students, researchers, and colleagues, these need a place to live.

Sorting out Stockholm’s housing problem is just as important as addressing the bureaucracy that the Swedish Institute criticizes.

Rebecca Ahlfeldt is an American ex-pat writer, translator and editor currently based in Stockholm.

The Local (news@thelocal.se)

Your comments about this article

19:52 September 20, 2012 by kenny8076
i have been on a waiting list in Karlstad on KBAB for over 1 year and i am stilll about 8,000-10,000 points away from the numbers people have that are getting the apartments..... its an absolute joke.... when i moved here from America i told my girlfriend i had never seen anything like it. i never even knew this was a problem in developed countrys..... "waiting list" for apartments........ yet in the past year they have been building massive condo buildings for sale for rich people, they are almost done with a building down the street from me, i looked on their website and the 6 apartments on the top 3 floors are going for 5,000,000+ SEK...... yet there are thousands of young adults on waiting lists for apartments like third world country's....... im baffled by it to be honest........ me and my girlfriend live in a 30 square meter apartment like caged in animals while we continue the waiting list game.... or until we move back state side where it literally takes 1 day to get an apartment pending a credit check
00:09 September 21, 2012 by fighter_mind
I stayed in USA for 4 yrs and had not faced this housing issue. Rental communities were & are in plenty. I mean I am praising america but it's high time that sweden should think and try to work towards a solution. And the kind of black marketing happens, one can actually know once you step into it.
07:38 September 21, 2012 by RobinHood
The lesson seems to be - Don't move to an expensive city unless you can afford to live there. There are cheaper, more realistic alternatives elsewhere, places you can afford to live, go live there instead.
09:19 September 21, 2012 by grymagnusson
A step in the right direction - http://www.rod.se/uthyrare-ska-f%C3%A5-t%C3%A4ckning-f%C3%B6r-avkastningsr%C3%A4nta

Basically means that those renting out bostadsrätter will no longer be obliged to subsidise their tenants' rent.

One step to formalising a very informal and insecure market.
09:39 September 21, 2012 by Twiceshy
RobinHood take off your blinders, that's not at all the lesson here. The lesson is that Stockholm (and other) housing markets in Sweden are serially screwed up and not showing any signs of improving.
10:30 September 21, 2012 by polymorf
This isn't just a problem for immigrants, I know Swedes that have been doing the second hand shuffle for 5 years. This needs to be addressed by the government, there are too many permits for Bostadsrätt being given out, *permanently* making apartments unavailable for renters, and apparently no effort in making apartments available for average Swedes and immigrants. The cost of buying an apartment in the City is equivalent to New York, San Francisco or Paris, but the average salary is %25-%50.

You could go live in Märsta or Södertälje, but that 3 hours a day of commuting eats a majority of the quality of life that Sweden promises.
11:01 September 21, 2012 by liaquath_amms
Everybody wants to live in Stockholm, thats the biggest problem. No matter if they have work or study there. Even the new arrivals while thinking of settle down in Sweden, like to start from Stockholm. I know many people, especially, asylums or refugees, just want to live there life in Stockholm; although they have no connection with this city at all. Only because of the NAME? I dont know why. It can be okey for other developing countries, where centralized bureaucratic system appeared, and everything is circulating around the capital. But in Sweden, I never had to go there for a piece of work. If you have study or work or relative or something to do there, go Stockholm. Otherwise let them live in peace.
11:25 September 21, 2012 by Borilla
Not only does everybody want to live in Stockholm but everybody wants to live in one central area of Stockholm. The rental problems for everyone (both Swedes and immigrants) are huge. "The Peoples' Home" is no more but the legislation that helped create it is still in place. The Moderates keep trying to change the rules to benefit their friends and that certainly won't help. Relaxing regulation so that the rich property owners can grab more property won't help. In a seller's market, giving the seller more leverage won't decrease prices or make more units available.A thoughtful considered approach must be taken but that won't happen with the FOF (Friends of Frederick) having the door opened to them and closed to everyone else.
13:28 September 21, 2012 by JulieLou40
"We just assumed". Didn't you do ANY research before you came here, you stupid woman?

I really wish TL would just knock your ignorant "articles" on the head.
14:52 September 21, 2012 by Twiceshy
@Borilla: You are acting like the problems are confined to a small area of Stockholm, when in fact it's the whole Stockholm having problems, as well as other cities like Uppsala.

@liaquath_amms: You're acting like Stockholm is the only city in the world where people are flocking to.

Apparently people are unable to be critical-minded. Stop making excuses and ask yourself why this is only a problem in Sweden.
16:05 September 21, 2012 by azimuth
The article's title is misleading, it should be "Swden has to fix its housing problem". It's not the problem of Stockholm only. Every city in Sweden has the same problem, even in smaller cities the situation is tougher. Once I moved to Borås where I thought should be no problem with finding accommodation. The only thing saved me was the rule the kommun has that those who move in to the city have priority in getting accommodation...
21:23 September 21, 2012 by rubble
@RobinHood .... You really have made some misguided (at best) comments in the past, but you truly take the cake with this one. It is ALL of Sweden, not just Stockholm. Even in Luleå, Växjö. Lund, Umeå and other smaller cities a renter can be on a list for 5 to 7 years and still have to wait and wait and wait once they decide to move out.

And in terms of small-town discount, dream on, once you get outside of the very heart of Stockholm and Göteborg, the rents are pretty much the same nationwide, ie. rapidly rising. It is still much cheaper here than London, Paris, NYC, Hong Kong, etc, but combine the incredible shortage with the fact that a small town in Sweden is NOT Paris or NYC, well, the situation is actually not that good at all, especially for new arrivals that are not of the 'refugee' camp.
21:26 September 21, 2012 by Lemanic
Sweden needs to read Jane Jacobs to fix it's housing problems. There's no other way. The utopian modernist structure is incredibly shakey by this point. "Lindhagenplanen 2.0" by YIMBY STHLM is the only way.
21:31 September 21, 2012 by kenny8076
thank you Rubble.... in fact i was just in town today and posted on the window of a real estate office was a property in Kristinehamn for 16,000,000SEK...... lol KRISTINEHAMN!!!!!! lol my high,school was bigger than that town!!! it doesnt matter where you are in Sweden there will ALWAYS be waiting lists and they will ALWAYS be overpriced! they claim they are the best country in the world but its because they are clueless of how much easier it is else where...
00:12 September 22, 2012 by Swedishmyth
Government intervention in markets lead to shortages and rationing. Always has, always will, whether in the Soviet Union or in Sweden.
08:09 September 22, 2012 by HorstRadisch
Ye gods, this country makes people moan. I went to Mallorca this year with a bunch of Swedes who were Olympic Gold Medal class when it comes to moaning about everything. I joined a group from the UK instead - always positive, had a great time, and hope to join them again next year.

Now the moaners have arrived on this website, and they're not all Swedes it seems. If you move to another country (in this case Sweden), you should fit in with how things are there, not moan about them and say how great it is "back home". If it's so bloody great back home, bugger off back there!

Nobody seems to have considered that one of Sweden's biggest problems is that everyone is moving to the cities, leaving just about everywhere in the countryside with desperate problems. If you make housing in Stockholm cheap and abundant, how will that help? The answer is that it won't. It'll make life easier and/or cheaper for you and a few thousand more, and screw it up for hundreds of thousands dotted around the country, mostly out in the sticks. I can't for the life of me see how that is good for the country as a whole.

And, before you ask, I live in Örebro, a growing city with its own housing problems, admittedly nowhere near Stockholm's of course. But the fact that everyone within 50km wants to move here isn't helping a LOT of smaller municipalities and communities. Cheaper housing will help me (I rent), but I don't want it.

Try looking at the big picture for once! Then, in the name of God, STOP MOANING!
08:35 September 22, 2012 by frenchviking
the problem is that rental is too regulated, so home owners who wish to rent are not able to do so:

- home owner associations will not allow most people to rent out their apartments

- rents are controlled by the government so if you do get the right to rent out your flat then you are not able to even recover a fraction of your costs (avgift + ranta + amortisation +necessary maintenance +bils + ...)

So basically this removes the whole buy to let market which exists everywhere else in the world.

As a result the rental market has no long term supply of rental properties...

I know this system is aimed at protecting tenants, but in fact it has the opposite effect.

deregulate the rental market, make it possible to buy to let, and there will be apartments available for rent in the city... plenty of them!
19:59 September 22, 2012 by Acta
Best country to live (without an apartment) - Sweden.
21:42 September 22, 2012 by oluies
One way of fixing this would be to unregulate the rental rates. Today 3 room newly built 3 room 70m2 costs about 13-14000 sek (within the inner city walls) Unregulating would double this to 20-25. This would make it easier to find something and probably also raise the rates in the suburbs, which would increase the building of rentals in the suburbs.

I dont know how this would help students :)
16:54 September 23, 2012 by Roll Tide
I currently live in Uppsala with my wife, who is from Uppsala, and I can tell you that the problem is widespread and not confined to Stockholm. When I moved here a couple of years ago, I naively thought that we would be able to rent some kind of apartment/house/townhouse within days of moving over...

We were checking Uppsala Hem, Rikshem, and all the other rental agencies every day for nearly a year before we caved in and signed a short lease on a dump in a questionable neighborhood for 6600 sek per month! We were very lucky that my wife's parents have a guest house on their property and we were able to live there for 9-10 months while we searched for our own housing.

I had never seen or heard of anything like this in other "highly developed" countries. There isn't a city in the US that I couldn't move to on Monday and have living arrangements on Tuesday. I think one of the problems is that Swedes just accept it kind of like they just accept the Systembolaget. When I complain about it to my wife, she just gives me one of those responses like, "Well, we just haven't been signed up with the housing agencies long enough to be high on the list."

I do wish that the author had delved in to possible solutions to this housing disaster instead of just pointing out the obvious that there is a big problem. Some interesting solutions in the reply thread. I'd like to see some more. I think frenchviking is on the right track with his ideas.
18:06 September 23, 2012 by cogito
It took us one day to find an apartment to rent in New York.

It took two days in Paris.

It took seven (7) years to find an apartment to rent in Stockholm.
23:19 September 23, 2012 by wendist
Why would deregulating the rental market create more available appartments in central Stockholm?

Stockholm apparently is quite an attractive place to live since so many people try to move there so my guess is that they who allready live there (and occupy all those nice apartments you would like to get your hands on) also thinks it´s nice to live in Stockholm and therefor have no interest what so ever to move out.

But of course if prices and rents go up thanks to the deregulation then they might be forced to move.

So supply won´t change and demand won´t change, the only thing that will change is who will live there. Ordinary people out, big wallet people in!

And how exactly is this an improvement? You will have the same amount of people complaining but now it will be somebody else and not you! Much better!

The only way to solve the problem is to increase supply (or to find a way to make life in Stockholm so unpleasant that demand goes down) and since "central Stockholm" just stretches so far in any direction before it stops being "central" the only solution is to build upwards. But apparently that is not an option. Why?
08:37 September 24, 2012 by Just_Kidding
Swedish song for new-comers: Vänta lite, Vänta mer!
09:15 September 24, 2012 by smilingjack
I have lived in Rome. walking distance to the Colosseum. took 2 days 2 find. 120sqm magnificent 3 bedroom 2 bathroom apartment. fresco 4m ceilings. state of the art. tesselated tiled floors throughout. less than the 70sqm apartment I have in stockholm. ditto my investment apartment I have purchased in venice. hhmmm venice for half the price of stockholm and a much better apartment. venice or stockholm - venice or stockholm - yep went with venice. but in any case I will be back in my 400sqm ultra modern house on 4000sqm - see stirling SA on google images - 15 minutes from the adelaide cbd for the same price as a dog kennel in little sudan aka hotorget. with the beautiful mount lofty golf course 5 minutes away and I dont need a licence to play. sweden - nice people but a strange country with strange ideas.

@wendist - you think stockholm is big. sydney is a tad over double the size of stockholm. the state of nsw is twice the size of sweden with the same population.
00:38 September 25, 2012 by engagebrain
The killer is the secondary rental market and the refusal of anyone with a primary contract to ever give it up. This makes rental expensive and insecure for secondary tenants. It is also mostly illegal.

It can't be difficult to find out who lives where and then ditch the primary contact holders who abuse the system - this would free up swathes of legal rental property and possibly put the rents into the hands of associations who might then build more flats.
17:01 September 25, 2012 by pkpekka
@All: I work at Karolinska Institutet and my professor is cursing the housing problem because it is making it difficult for him to recruit post-docs. Or they arrive late. Or leave earlier. I luckily have student accommodation, but for how long? The ques for that can be 20 months and your post-doc is over by the time you get it!

The queing system is set up to favour native Swedes who have been able to wait for the apartment 5-10 years. So this is especially unfair against highly-skilled foreigners.

@engagebrain The "secondary/tertiary" rental system is at the heart of the problem. Before I came to Sweden I have not even heard of the term. In Finland for instance everybody (95%) primary rents. Helsinki has its share of problems in housing (price) but as far as I know availability is not a problem. It seems to be incredibly stressful to have to juggle the 2nd/3rd rental contracts and the unofficial-type relationships that follow. I own an apartment in Turku/Åbo and rent it out. It works fine.

@JulieLou40, @Borilla, @liaquath_amms, @RobinHood: Like in any country there are many kinds of jobs that can only be done in Stockholm and other big cities. For instance research and so on. There should be no rental ques in Stockholm. Let the markets decide the price. And then build more. I don't understand the mentality at all, and I am from Finland. Maybe you like the que because it lets you keep a more expensive apartment in Stockholm than you could otherwise be able to have.
18:00 September 25, 2012 by skogsbo
not sure why it's a government problem, it's a people problem. The west in general has a housing issue, because folk don't live as big families anymore. Everyone wants a house of their own, but there isn't the space to have this, or the government money to subsidise construction. Not to mention the infrastructure to then transport everyone from their own home, to the same central work spaces. Commuting times can only increase, as cities spread out.

Masses of people could work virtually from home, anywhere in Sweden. Research for one area, certainly doesn't need to be even in the country it's relevant too. Employers need to changed in this respect and that is where the state needs to step in.
18:22 September 25, 2012 by cogito
No, #27, the west "in general" does not have a housing issue...

'm going to repeat our experience--just for you:

It took us one day to find an apartment to rent in New York.

It took two days in Paris.

It took seven (7) years to find an apartment to rent in Stockholm.

The only other place I know of that had a housing shortage like that of Stockholm was Moscow--back in the good old pre-1989 Soviet days.
19:08 September 25, 2012 by Programmeny
I'm a student who moved to Uppsala. I have heard about the housing problem and started trying to secure accomodation since April the year when I came, with me flying in only in September.

By September, I still didn't have anything, but I figured it would be a bit easier once I get here. Man was I wrong.

I spent another five months from hotel to hotel, friends, and even slept in a church for a few days, and some emergency housing, which were TENTS in Polacksbacken.

I sept New Year's eve literally on the streets.

Only in February, at the end of my powers, I managed to get a place to stay. I was literally set on leaving the very next day. After five months living like a homless person, I had enough of it.

I'm soon finishing my master and on top of the fact that it's nearly impossible to get a job after graduation here, it's even harder to get a place to stay.

I'm leaving. Thanks for the free university. Have fun.
13:04 September 26, 2012 by blitz459
The problem is that for decades the government has instituted obnoxious rent controls. They were supposed to help less-advantaged people afford apartments. As is turns out, now the less advantaged people are suffering the most, while the well-off have all the connections and low rents. There are people who are living in central apartments paying rock bottom rent prices despite the fact they are economically better off than many people who are looking for apartments benefiting from rents set ages ago. If you are lucky they might turn around and rent this apartment for double or triple the price. Also, people who are looking for apartments are often taken advantage of, engaging in black market deals because they have no other choice. I have already been offered several of them. The people who need rent controls the most (students, young moving out from home, newly arrived immigrants) are the least likely to ever enjoy them. Rent controls just protect the "old boys club" of first hand contract holders. Suppressing prices creates shortages and the government has been suppressing rents below market value for many years now. As a result, Stockholm has a huge housing shortages, and of course it is not the rich who are suffering. Ultimately, rent controls have backfired. I can find an apartment easier in New York. Stockholm doesn't have anywhere near that type of population density. Another proof that this is not just some anomaly, is that this problem exists in ALL the major cities in Sweden. It is a policy issue. With such a high demand there is much money to be made by supplying housing, provided of course you can charge a profitable price to make the investment worth it. It took several decades for the Swedish government to back the housing market into this bleak corner, and there is NO quick fix. It will take many years to correct. But I see absolutely no change as the government refuses to make the necessary changes to the rent control system.
19:36 September 27, 2012 by masterstudent84
From my perspective it is true that the system of rent control, although constructed with good intentions (isn't the road to hell paved with good intentions?) did not help the less-advantaged. Affluent renters are counter-acting the state regulated system by buying apartments. In addition, as someone pointed out already, the queuing system is no longer suited for a united European market of which Sweden has chosen to be part of (and I am actually surprised that there is no case against Sweden at the European courts because to me it seems like the Swedish system is systematically hindering freedom of movement and residence for EU-citizens at least).

When I came to Sweden as a student for the first time, I of course did not have enough waiting days to even get a basic corridor room, which would have been the appropriate type of accommodation for a young single adult. Years later I could easily get a corridor room, however now I am a doctoral student and living with a partner and therefore, I would need a two-room apartment or at least a single room with a kitchen. But for those rooms I still don't have enough credit days after 3 years! In addition, everyone who has ever lived in one of the student accommodation places in Stockholm knows that there a lot of people living there that are students only on paper (by prolonging their thesis work, taking the exact amount of classes to qualify while not being enrolled in any program, etc.). I think what I am basically saying here is that an allocation based on time (waiting days) is not necessarily better than an allocation based on needs (which is not easy either).

For example, in a year I will have enough days to probably rent a 3- or 4-room student apartment, that is probably originally designed to accommodate a family, however the low rent will provide a incentive for me to rent this apartment with my partner and obviously hold the contract for as long as possible. So only because my doctoral student status is allowing me to still be considered for student housing, I will be able to rent an apartment that is probably designed for the needs of students with kids. This is the basic problem: the incentives in the Swedish rental market are set in such a way to create this inefficient and unjust rental market. Therefore, I do not understand some of the previous commentators that seem to take a critique of systematic inefficiencies within the Swedish system as some kind of personal attack on Sweden or Swedish people in general (seems to be a problem on The Local in general).

The incentive structure is wrong, in that it creates an inefficient and unjust housing market. While it hurts me to say this it seems that a liberalization of the rental market is the only way out.
19:49 September 27, 2012 by Swedishmyth
Stop saying that rent controls "failed" or "went wrong". Government force always distorts markets. Price controls always lead to shortages and rationing, whether it's bread in Soviet Russia, gasoline in 1970's America, or apartments in modern Sweden.

A freely operating supply and demand mechanism isn't done just for the heck of it. It has a function: maximizing the interests of buyers and sellers alike.

Now you have politically favored party members sitting in central apartments at well below market value, while regular Swedish citizens are forced to live like students or partake in the black market. This, in a supposedly Western country. Sweden isn't Western, despite its industrialized trappings.
12:28 September 29, 2012 by stigskog
Obviously the problem is the rent controls imposed by the government - in the form of rent tribunals.

The European University Institute (EUI) calculates that to make a 5% return on investment, a developer would need to set rents 70% higher than allowed by the Rent Tribunal.

If you can only rent a property to someone at a loss, then there is going to be very limited supply of properties to rent.

As usual government intervention has the opposite effect of intended.
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