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Council in "panic-driven" apartment scheme

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12:02 CEST+02:00
Council-owned rental apartments in Stockholm could be transferred to non-profit cooperatives, to prevent future councils selling them off.

The socialist-green alliance wants to safeguard against privatization of rental properties should a centre-right administration win the next local elections.

The majority on the Stockholm City Council, made up of the Social Democrats, the Left Party and greens, wants to transform the existing rental apartment blocks in Stockholm into economic associations.

An economic association would mean that tenants in theory own the apartments for minimal “investments” together with the city.

The current Stockholm administration claims that during the four-year term of the former conservative administration the percentage of privately owned apartments rose from 40% to 60% of available housing. More than 13,000 flats were “sold” valued between 15 and 17 billion kronor.

“We promised we would save rental apartments. Now we're working on solutions to keep that promise” said Annika Billström, Stockholm's mayor.

Billström's majority alliance recently failed to implement an earlier measure, under which the three largest rental property agents would be coverted into a foundation. City lawyers struck the proposal down citing EU guidelines. Around 100,000 apartments would have been affected.

The newest cooperative proposal has received strong criticism from the conservative opposition.

“It feels like a panic-driven proposal to mask the loss of prestige from the failure to form a foundation” said Krisina Axèn Olin, the Moderate leader on the council.

According to Dagens Nyheter the Left Party is supporting the move, saying that it's imperative to protect the rental market. The Greens also see the cooperative from as a viable solution which would further empower tenants.

But a change in the rental housing structure consequently would leave tenants stripped of protection from the Hyresgästförening tenants' association. According to Barbro Engman, Chairman of Hyresgästförening, there would be repercussions within the entire rental market.

“This [proposal] unsettles the entire housing rental system. It also exposes tenants in privately owned rental properties to a whole new set of rules. They would also lose the rental caps put in place by the existing system” said Barbro Engman.

Should the proposal move forward it would be ready to implement in the beginning of 2006.

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