Riksdag allows flat owners to set rent
Published: 19 Dec 12 15:30 CET | Print version
Online: http://www.thelocal.se/45174/20121219/
The Swedish parliament has voted through a change in housing policy that will allow cooperative flat owners to cover not only the cost of their coop fee but also their mortgage costs when they rent out their homes
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The proposal, which was voted through parliament on Wednesday with a slim margin, could ease the housing crunch by offering a financial incentive to rent out unused flats, the government argues.
Critics fear it will undermine Sweden’s cooperative model of housing.
The different changes to Sweden's housing laws proved so controversial in the last few months that the government had to build an unusual alliance on the floor of parliament.
Its MPs had to rely on the support of the minority Sweden Democrats, usually a pariah party rather than a political partner, to get a majority.
The Sweden Democrats abandoned the government, however, on one specific proposal that wanted to take away the cooperatives' right to veto a tenant who wanted to rent out his or her flat.
Usually, such permission is given only when a tenant is working or studying in a different city or country for a specified time, or if a tenant wants to give living with a partner a trial-run.
MPs were evenly split 169 to 169 when they voted on the proposal, in effect stalling it.
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The cooperative model of housing is just a different way of selling and buying apartments. It's sort of in between buying and renting.
In some countries a company builds an apartment building and then sells each apartment for a profit to individual people who want to live there. People may take a mortgage to pay for the whole apartment.
In Sweden a company builds an apartment building and an association is created which owns all the apartments and debt from the construction. People who want to live there buy shares in this association which gives them the right to live in one of the apartments (they can take a mortgage to do this purchase). Every month they pay a fee ("avgift") which the association uses to service its debt. What this means is that as the debt decreases throughout the years, this fee also decreases which makes the apartment more valuable.
It's not a bad system - you can own a house without taking on a heavy mortgage yourself, as long as you're OK with paying a higher monthly cost to this association.