• Sweden's news in English

Why well-paid people need homes too - and Sweden needs to get real

The Local · 7 Mar 2014, 08:53

Published: 07 Mar 2014 08:53 GMT+01:00

Facebook Twitter Google+ reddit
I'm always amazed at the Swedish media's ability to make a scandal out of, what I think is, thin air. On Monday, bold headlines splashed across the Dagens Nyheter and Aftonbladet newspapers, blowing the whistle on a foreign aid boss for (brace yourselves)...paying his mortgage.
Both stories were based on a longer report from OmVärlden, an international development trade magazine owned by Sweden's aid agency Sida. The magazine described in great detail how "documents revealed" that Norwegian diplomat Vidar Helgesen purchased a four-bedroom flat in an upscale Stockholm neighbourhood when he took over as Secretary-General of Idea, a Stockholm-based international aid organization partially financed with Swedish taxpayer money.
Readers learned further that Helgesen earned 120,000 kronor ($18,800) a month tax free ("more than the prime minister of Sweden") and used a roughly 15,000 kronor a month housing allowance to pay for the "interest and amortization" of his "private" mortgage.
The tone and framing of the piece portrayed Idea as a reckless waster of public funds and Helgesen, who left Idea in October 2013 to assume the post of Norway's European Affairs Minister, as cut from the same stock as greedy school-owning venture capitalists who line their pockets with proceeds derived from public money, fitting the profile of a favourite bogeyman of the Swedish press in recent months.
Only in Sweden does paying what, by international standards, amounts to a competitive compensation package for the heads of international organizations - making rational decisions regarding housing and investments - constitute some sort of moral affront.
OmVärlden reported that Helgesen "made a profit of around 3.7 million kronor. A profit partially financed with foreign development aid".
Never mind that the profit figure was based not on the actual difference between Helgesen's buy and sell price, but on an average 40-percent price rise for apartments in Stockholm. Despite the dodgy math, it's safe to say the apartment likely rose in value between 2006 and 2013. But it's hard to see how Helgesen should be faulted for the rise in his home's value and then selling the property when he left Stockholm.
I can empathize with Swedes who are upset to see their hard-earned tax money help some well-heeled foreigner take up residence at one of central Stockholm's more desirable addresses. And spending money from Sweden's foreign aid budget on pricey Stockholm accommodations doesn't really feel like to optimal use of funds.
But what Idea pays foreigners it recruits to work in Stockholm isn't really the issue. What deserves a closer look is what led to the situation in the first place: A basically non-existent residential rental market that forces foreigners to buy rather than rent, as well as a potentially dangerous view, quite common in Sweden, that paying the principal on one's mortgage is optional.
Due to a number of factors, home prices in Sweden's major cities continue to defy gravity. Even at the nadir of the financial crisis, most Swedes had to worry about was prices rising slower than usual. They still went up, just not as quickly as people hoped.
Thus, most homeowners in Sweden decide to forgo paying down their mortgages, and banks are more than willing to offer interest-only payment plans. While Swedes may continue to rely on price rises to help them build de facto equity in their homes, homeowners in many other countries start paying down their mortgages from day one. Not doing so isn't really an option.
So why then, when Helgesen makes a prudent financial decision to use his housing allowance to pay down the principle of his mortgage, is that suddenly considered scandalous? 
By OmVärlden's reasoning, any nurse, school teacher, or government employee paid from state coffers who then sells a home for profit should be shunned for "profiting" using taxpayer money.
While I can't say for certain, I'm willing to bet that Helgesen would have happily rented a flat. Most people in his position know they aren't going to be in any given city for more than five years, and thus are reluctant to go through the hassle and expense associated with buying a home in a place they are destined to leave.
But, as anyone who's moved to the Swedish capital can attest, it's virtually impossible to find a rental apartment with a stable lease – no matter how much money you have. Anyone looking to avoid having to move house after a year or so really has no other option than to buy – which is exactly what Helgesen did.
Story continues below…
That he bought a large apartment in a nice part of Stockholm is beside the point. Lashing out at Helgesen and Idea for making the best of a bad situation amounts to attacking the symptom rather than the cause.
In some ways, the story also boils down to a (largely) non-Swedish organization being unfairly judged for failing to adhere to Swedish standards. Since when were the salaries paid to Swedish ministers the measuring stick for determining what an international civil servant ought to be paid? Would there be similar outrage if Helgesen (or a Swedish diplomat) had received a comparable compensation package for a job in Paris or Washington, DC? Does anyone ask questions about what top Swedish diplomat Jan Eliasson earns tax free as deputy head of the United Nations?
The reality is that there is a global market for talented managers, be they from the public or private sector, and if Swedish organizations aren't ready to pay what the market demands, the best and the brightest will go elsewhere, depriving Sweden of their talents, not to mention the benefits they can bring to the local economy by spending their comparatively large salaries locally.
Stockholm claims to have grand ambitions as a city that entices talented people from around the world to live and work there. But the way Helgesen has been portrayed in the Swedish press serves as the sort of cautionary tale that will likely make other foreigners recruited to top jobs in Stockholm think twice about moving here.
David Landes
Publisher and editor of The Local Sweden

The Local (news@thelocal.se)

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
'Don't turn the Pope into a global teddy bear'
Sweden's Queen Silvia and Princess Leonore visiting Pope Francis in the Vatican last year. Photo: Henrik Montgomery/TT

It's time to hold the Pope to account and make sure he turns his words about reform into action, argues a minister of the Swedish Church ahead of Pope Francis' visit to Sweden.

Löfven: 'Sweden will double its number of troops in Iraq'
Stefan Löfven and Haider al-Abadi during the visit on Monday. Photo: Henrik Montgomery/TT

Swedish Prime Minister Stefan Löfven has promised to double his country's number of troops in Iraq following a meeting with Iraqi counterpart Haider al-Abadi on Monday.

Will Swedes soon be looking for fairtrade porn?
Should Swedes think fairtrade with porn? Photo: Karin Malmhav/SvD/TT

A fairtrade attitude to pornography would be beneficial, Sweden's health minister told The Local.

Presented by Stockholm University
Nordic fashion in focus at Stockholm University
Simon Paulin/imagebank.sweden.se

Nordic fashion took centre stage in the Swedish capital last week as Stockholm University hosted the “first-ever” academic conference looking at luxury and sustainability in the fashion industry.

Referee, coach and parents in Swedish youth football fight
File photo of a referee holding a red card not related to the story. Photo: Stefan Jerrevång/TT

A football dad broke his leg in the brawl in front of 11-year-old kids after a Hammarby youth football game.

Illicit abattoir kept more than 100 bulls' penises
A couple of young bulls not related to the story. Photo: Jonas Ekströmer/TT

Dried cattle genitalia, goats' heads and hundreds of litres of lard were just a few of the many strange finds discovered when police raided a property in Sweden.

This is officially Sweden's most beautiful beard
The most beautiful beard in Sweden. Photo: Memo Göcek

According to a jury of barbers and 'well known bearded profiles', that is.

Presented by Invest Stockholm
One expat's strategy for making friends in Stockholm

You might think it’s hard to make friends in a new city. But if at first you don’t succeed – try something else!

Injured Swedish photographer protected by 'guardian angel'
Swedish photographer Paul Hansen on another occasion. Photo: Fredrik Sandberg/TT

Photographer Paul Hansen thanked his lucky stars for surviving sniper fire while covering the battle for the Isis-held city of Mosul in Iraq.

How Sweden is trying to smooth relations with Saudis
Swedish Prime Minister Stefan Löfven meeting Saudi Arabia's Trade Minister Majid bin Abdullah Al Qasabi. Photo: Henrik Montgomery/TT

Sweden's Prime Minister Stefan Löfven has visited Saudi Arabia a year and a half after relations turned frosty in a major diplomatic row.

Sponsored Article
Last chance to vote absentee in the US elections
People-watching: October 21st-23rd
Sponsored Article
This is Malmö: Football capital of Sweden
Fury at plans that 'threaten the IB's survival' in Sweden
Analysis & Opinion
Are we just going to let half the country die?
Blog updates

6 October

10 useful hjälpverb (The Swedish Teacher) »

"Hej! I think the so-called “hjalpverb” (auxiliary verbs in English) are a good way to get…" READ »


8 July

Editor’s blog, July 8th (The Local Sweden) »

"Hej readers, It has, as always, been a bizarre, serious and hilarious week in Sweden. You…" READ »

Sponsored Article
Where is the Swedish music industry heading?
Angry elk chases Swede up a lamp post
Sponsored Article
Why you should 'grab a chair' on Stockholm's tech scene
The Local Voices
'Alienation in Sweden feels better: I find myself a stranger among scores of aliens'
People-watching: October 20th
The Local Voices
A layover at Qatar airport brought this Swedish-Kenyan couple together - now they're heading for marriage
Sponsored Article
Stockholm: creating solutions to global challenges
Swede punches clown that scared his grandmother
Sponsored Article
Swedish for programmers: 'It changed my life'
Fans throw flares and enter pitch in Swedish football riot
Could Swedish blood test solve 'Making a Murderer'?
Sponsored Article
Top 7 tips to help you learn Swedish
Property of the week: Linnéstaden, Gothenburg
Sponsored Article
‘Extremism can't be defeated on the battlefield alone’
Swedish school to build gender neutral changing room
People-watching: October 14th-16th
Sponsored Article
Stockholm: creating solutions to global challenges
Man in Sweden assaulted by clowns with broken bottle
Sponsored Article
Why you should 'grab a chair' on Stockholm's tech scene
Nobel Prize 2016: Literature
Sponsored Article
Where is the Swedish music industry heading?
Watch the man who discovered Bob Dylan react to his Nobel Prize win
Sponsored Article
One expat's strategy for making friends in Stockholm
Record numbers emigrating from Sweden
Sponsored Article
Nordic fashion in focus at Stockholm University
People-watching: October 12th
The Local Voices
'Swedish startups should embrace newcomers' talents - there's nothing to fear'
How far right are the Sweden Democrats?
Property of the week: Triangeln, Malmö
Sweden unveils Europe's first elk hut
People-watching: October 7th-9th
The Local Voices
Syria's White Helmets: The Nobel Peace Prize would have meant a lot, but pulling a child from rubble is the greatest reward
Missing rune stone turns up in Sweden
Nobel Prize 2016: Chemistry
jobs available