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Housing boost plan revealed by coalition

UPDATED: Sweden's Prime Minister Stefan Löfven has unveiled his strategy for tackling the nation's housing crisis, pledging that 150,000 new homes will be built each year from 2016, in a move designed to help both Swedish and international workers.

Housing boost plan revealed by coalition
Sweden's Prime Minister (centre) along with the country's Green Party leaders: Photo: TT
Promising to invest 3.2 billion kronor a year in the project, Sweden's Social Democrat leader said that the plan would also improve employment opportunities. 
 
"We have a have a great housing shortage in Sweden. Housing is a key part of the government's labour strategy," he told a press conference.
 
"A housing shortage is one of the biggest obstacles to growth, such that people cannot move wherever they want," he added.
 
Flanked by the country's Social Democrat Finance Minister Magdalena Andersson and the leaders of Sweden's Green Party, his junior coalition partner, he said that he planned to focus on building student accommodation and small apartments.
 
Around a third of Swedes live in rental accommodation and the country's housing shortage was a key campaign issue at the last general election.
 
Close to 300,000 young adults between 20 and 27 years of age neither own their own property nor have a long term rental contract.
 
While in many other European countries public housing is reserved for those on lower incomes, anyone in Sweden can apply for it and it is usually maintained to a high standard. Both public and privately owned apartments are available to those who register with the city's housing service.
 
The current accommodation shortage is particularly acute in the capital Stockholm, where in some parts of the city there is a 20-year wait for apartment-seekers. This has resulted in a strong subletting culture, with prices spiralling in recent years despite rules designed to cap rental increases.
 
A small studio flat in central Stockholm should cost around 4,000 kronor ($471) a month, but tenants with second hand contacts can typically be expected to pay around 10,000 kronor ($1179).
 
Meanwhile, property prices are shooting up in Sweden's major cities, leading to complaints that young buyers are also being frozen out of the market.
 
"The demand for small apartments in particular is great. The housing shortage creates long queues for rented apartments and expensive apartments for buying. This makes it harder for young people and students above all to get their feet on the housing ladder, particularly as many in that group don't have a permanent job," wrote Sweden's Minister for Housing, Urban Development and Information Technology in a debate article published by The Local on Tuesday.
 
His comments were echoed by Stefan Löfven at Wednesday's press conference.
 
"The housing shortage creates social problems. Many young people remain at home for a longer time than they and their parents had thought. People are finding it harder to live their lives. This is a freedom issue," the Prime Minister said.
 
The Social Democrat leader also acknowleged that the crisis was "reducing opportunities for growth", by making it difficult for companies to recruit from other parts of the country or from abroad.
 
Ministers said that new apartments of around 30 square metres would cost no more than 3,600 kronor a month and that the housing programme would be financed by cutting tax breaks for domestic building work, including home improvements.
 
 "We're moving resources from renovations to new-builds," Finance Minister Magdalena Andersson told the conference.
 
"Subsidies will be available immediately to private and public sector property owners, to finance the building of rental apartments. The apartments will be subject to strict energy efficiency standards," she added.
 
While all of Sweden's mainstream political groups have previously suggested that building new homes should be a priority, politicians from the country's centre-right Alliance parties were quick to question the centre-left coalition's approach following the press conference.
 
Centre party leader Annie Lööf released a statement saying she feared the changes could lead to a growing black labour market, as homeowners sought to avoid paying higher taxes.
 
Swedish newspaper Svenska Dagbladet estimated that reconstruction work currently costing homeowners around 10,000 kronor would be 2,000 kronor more expensive following the tax break shift.
 
Sweden's Prime Minister previously suggested he would not scrap the so-called ROT tax break for Swedes seeking to renovate their properties.
 
"It is a betrayal and a huge breach of faith. Stefan Löfven clearly said before the election that the ROT deduction would be unchanged," Niklas Wykman, a tax policy spokesperson for the Moderate party told the TT news agency, adding that the change was unfair on property owners who had budgeted to make changes under the current terms and conditions.
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RENTING

Five tricks Swedes use to avoid the long wait for rental apartments

The official waiting time for apartments in Stockholm, Gothenburg, and Malmö varies between three and eleven years. But Swedes have their own tricks for jumping the queue.

Five tricks Swedes use to avoid the long wait for rental apartments

There’s no requirement for landlords or renters to use the queuing systems run by the municipalities in the big cities, but most of the big ones do, the intention being to reduce corruption and increase fairness in the rental market. 

The Stockholm Housing Agency, or bostadsförmedlingen, has a queue between seven and eleven years long. Boplats Gothenburg has an average wait of 6.4 years, and Boplats Syd in Malmö has an average waiting time of nearly three years.

According to Kristina Wahlgren, a journalist at Hem & Hyra, Sweden’s leading rental property magazine, the system puts foreigners and recent arrivals to Sweden at a significant disadvantage. 

“It’s extremely difficult if you are from another country. You don’t have any contacts, and it’s quite difficult to understand if you haven’t grown up in this culture,” she says of the system. “There are some quite subtle aspects, and there’s vänskapskorruption [giving special advantage to friends]. ” 

Listen to a discussion about Swedish queue systems on Sweden in Focus, The Local’s podcast. 

Click HERE to listen to Sweden in Focus on Apple Podcasts, Spotify or Google Podcasts.

Obviously, the biggest advantage faced by locals in Sweden is that they normally joined the queue the moment they turned 17, so by the time they’re looking for an apartment as a young adult, they’re already near the front. 

But even for new arrivals in Sweden, it’s possible to wait a much shorter time if you know the tricks, says Wahlgren, who has been nominated for Sweden’s Guldspaden journalism prize for an investigation into how Malmö finds housing for homeless people. 

Kristina Wahlgren, a reporter for the Hem & Hyra newspaper. Photo: Hem & Hyra

1.  Apply for more expensive new-build apartments to start off with 

If you’ve got a good enough salary, and are willing to pay high rent for your first few years in Sweden, this can make it easier to get an apartment, as there is less competition for more expensive, new-build apartments, Wahlgren says.

“If you’re willing to pay high rent, then you can get an apartment within a couple of months [in Malmö]. If you want a cheaper apartment, it can take years. So it’s quite a big difference.”

2. Rather than wait for your perfect apartment, take what’s available and then swap 

The rules recently got a little stricter, but it’s still relatively easy to swap between apartments once you have a first-hand contract. There’s even a website, Lägenhetsbyte, which acts as an interface. 

This means, if you use the method above, and decide to rent a more expensive new-build apartment with a shorter queue, you can then downgrade to a cheaper apartment with someone who is after somewhere newer and swankier.

Rental queues are also shorter in less desirable areas of Sweden’s cities. For example, the waiting list in Norra Hissingen in Gothenburg is only five years, half what it is in Majorna. It can be quicker to make do with living in a relatively dreary area, and then swap with somewhere better, than to insist from the start on an apartment in your dream location. 

“If you can’t wait for the right department, just take the one that you get, then you can keep on looking and when you do have a lease, you can change the lease with someone else,” Wahlgren says. 

To change apartment, you need to have a so-called “acceptable reason”, such as needing a bigger or smaller apartment. With any luck, your landlord should accept the swap. If they refuse you can challenge their decision at your local hyresnämnden or “rental tribunal”.  

3. Use the tricks for contacting landlords directly  

Landlords in Sweden are not required to use the municipal rental queues to find their tenants, and if a suitable tenant presents themselves just as an apartment becomes free, they may prefer to take someone they know.

This is particularly the case with the smaller, private landlords. It’s possible to find lists of private landlords online, such as here. But Wahlgren recommends putting in a bit of legwork.

“One way to find who owns an apartment block, is to just go around and check on the buildings for the names of the landlords, and look in the stairwells for the number of the landlord’s agent.” 

Once you have the number, you have to ring both regularly, at least once a month, and also strategically. 

“It’s important to call at the right time,” Wahlgren says. “Because normally apartment rentals end at the turn of the month, so that’s when you’re going to call. You don’t call on the 15th, you call on the 31st or the 1st of the month.”

4. Exploit all the friends and contacts that you have 

When someone hands in their notice on a rental agreement, they may try to shorten their notice by finding a replacement for the landlord, or they might find a replacement simply as a favour. This is why it’s important to ask your friends and work colleagues if they know of any apartments becoming free. 

“If they use the municipal queue, they have to follow the rules. This way, they can choose their own tenants,” Wahlgren says of the appeal of this to landlords. “If you’re a nice person, you might be able to just talk your way into an apartment.” 

5. Be a student 

“If you’re a student, there are special housing companies in the university cities, different foundations that rent out apartments,” Wahlgren says. But then you have to study.” 

Illegal ways of getting an apartment

All of these ways of getting a rental apartment are legal, but there are some ways of getting a rental apartment more quickly which are not.

1. Paying a fee

You may also find landlords or intermediaries on websites such as Blocket, who ask for a one-off payment to jump a rental queue, or get a rental apartment. This is illegal. “You can lose your money, you can lose the apartment, and in the worst case, you can go to prison,” warns Wahlgren.

2. Getting an illegal subtenancy 

It’s perfectly legal to rent out your rental apartment to someone else for a period, if you have a valid reason for doing so and your landlord agrees. But such is the pressure to get housing that a market has sprung up in illegal subletting. Before signing a contract for a sublet, make sure that the landlord who owns the property has agreed to it. 

3. Bribing someone running the queue 

There have been cases of people working for municipalities logging into the housing queue and altering it, either as a favour to their friends, or for money. This is fairly rare, and in the unlikely event that someone offers to do this for you, it’s best to decline. 

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