Arkelsten decided to move out of her parents' house and into an apartment with her boyfriend in April 2000, the Aftonbladet newspaper reports.
But rather than face the years-long wait normally required to obtain a first-hand rental contract, Arkelsten and her boyfriend found a new home almost immediately on popular Södermalm, south of central Stockholm.
The landlord of the building was Peder Dahlborg, who two years later was the subject of a report by the Sveriges Television (SVT) investigative news programme Uppdrag Granskning looking at black market rentals in Stockholm
According to the programme, Dahlborg built a real estate business around buying buildings of rental apartments and evicting as many tenants as possible. He would then renovate the buildings, raise the rents, and sell contracts to the flats on the black market.
Arkelsten claimed she obtained her contract properly, although she admitted that it was unusual for someone to get an apartment in such a sought-after part of Stockholm so quickly.
“I didn't make any black market payments,” she told the newspaper.
“I got it through a friend of the family and heard that there was a landlord who was looking for easy-going tenants.”
Arkelsten was unable to elaborate on what sort of relationship her family friend may have had with Dahlborg.
In 2005, Arkelsten and her boyfriend bought a tenant-owner apartment (bostadsrätt) in Årsta south of Stockholm. As part of the transaction, the seller took over the rental contract for Arkelsten's flat on Södermalm.
The housing scandal is the latest in a string of revelations which have kept Arkelsten on the defensive since reports surfaced on Wednesday that she accepted a sponsored trip to the south of France at the invitation of Dutch oil company Shell.
She also came under fire for holding a position on the board of environmental consultancy Sweco, a post which she has since resigned.
According to SVT, roughly one third of Riksdag members also sit on the boards of publicly traded companies.
Speaking to SVT on Thursday night, Arkelsten she has no plans to resign her post.