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How do rent controls work in Sweden and why did this issue bring down the government?

Why have proposed changes to Sweden's sacrosanct rent laws brought opposing parties together in their desire to bring down the government?

How do rent controls work in Sweden and why did this issue bring down the government?
Newly built apartments in Stockholm. Only those constructed after summer 2022 would be affected by the current proposals. Photo: Fredrik Sandberg/TT

How does the rental system work in Sweden today?

Currently, Sweden has a system of rent controls. This means that rental prices are kept low, both when the tenant rents directly from the apartment’s owner (called a “first-hand contract” in Sweden) or when the “first-hand” tenant sublets to someone else. 

Although tenants who sublet can charge a bit extra to cover bills and furniture in these “second-hand contracts”, which are usually also strictly limited in time. 

The thinking behind this system is partly to ensure that people have access to affordable housing, so in general Sweden does not make it profitable to buy property to rent out, unlike many countries. Rent controls are a key pillar of Sweden’s social model, introduced by the Social Democrats after the Second World War and in theory they guarantee that even those on modest incomes can live in their preferred area.

A growing population, especially in Sweden’s larger cities, and a slow rate of construction of new homes, has led to a major apartment shortage.

Because the market does not determine who has access to rental properties, instead it comes down to time spent waiting for first-hand rental contracts to become available.

This can often be a decade or more in densely populated areas, which means many people, and particularly newer arrivals to the cities, end up looking for second-hand contracts if they cannot afford to buy.

Even though in theory second-hand rentals should not be more expensive, there are two main reasons that tenants on these contracts often end up paying significantly more than those renting directly.

One is that the huge demand makes it easier for unscrupulous landlords to overcharge, and the apartment shortage means some people will accept to pay more rather than go through the process of finding a new home. One other reason is that people who own their apartments can sublet them at a higher price; although they are still required to charge a “reasonable rent” they may calculate this based on the current market value of the property. In city locations, that’s often high. 

Add to this the fact that there are tight restrictions on subletting, intended to stop people buying up properties to rent for profit, and the result is a very insecure situation for those people on the second-hand market.

So there are certainly problems with the current system, but there’s no consensus on how to fix them. 

What did the government propose?

The proposal that the Centre and Liberal parties fought to have included in their agreement with the government is to introduce so-called market rents, where landlords would be free to choose the price they set based on the market; in other words, based on demand and individual negotiations with tenants. 

The Social Democrats reluctantly agreed to look into introducing this for newly constructed apartments only, which today account for a tiny percentage of total housing stock. It’s worth noting that owners of new builds are already allowed to charge higher rents than many older buildings for the first 15 years (this is to cover the costs of the investment in the building), but these cannot currently be negotiated on an individual basis. 

One of the planned changes, as set out in the results of an inquiry presented by the government, is that location would play a bigger part in setting the price, so that housing in popular areas would go up in price. Rent would also rise each year in line with inflation. But it would be voluntary to introduce market rents, so it probably wouldn’t be the case that every new build would be subject to them — after all, this would rely on tenants being willing to pay them. The government also outlined plans to introduce further proposals that would water down some aspects.

At the moment, tenants can appeal if they think they are being charged an unreasonably high rent, and there have been many high-profile cases of tenants winning a refund. This would still be possible under the new system, but only within the first year after the rent was agreed, and the tenant would need to prove their rent was significantly higher than other similar apartments.

Who’s for, who’s against?

Market rents are a policy that appeals to the conservative parties in Sweden. The Moderates, Centre Party, Liberal Party, and Christian Democrats are all in favour, though the far-right Sweden Democrats do not support market rents.

The Social Democrats do not want market rents, but agreed to introduce them on a limited scale in order to get the support from the Centre and Liberal parties as part of the January 2019 deal they struck to form a government.

The government’s press conference announcing the changes highlighted their concern that the new system may incentivise landlords to terminate contracts with tenants if they can find someone who will pay more, and said that “complementary proposals” would be put forward in future to address this.

The Social Democrats’ junior coalition partner, the Green Party, has no strong stance on the rental laws.

For the Left Party, this is a core issue. They are opposed to the introduction of market rents and see the proposals outlined under the January Agreement as the thin end of the wedge. Ever since the government signed this deal with the conservative opposition, the Left have vowed to oppose any move to bring in market rents, and this week they made good on that promise.

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2022 SWEDISH ELECTION

What’s the Swedish Christian Democrats’ abortion contract all about?

Ebba Busch, leader of Sweden's Christian Democrats on Monday presented an "abortion contract", which she wants all of Sweden's party leaders to sign. What's going on?

What's the Swedish Christian Democrats' abortion contract all about?

What’s happened? 

Ebba Busch, leader of Sweden’s Christian Democrat party, called a press conference on Monday in which she presented a document that she called “an abortion contract”, which was essentially a pledge to safeguard the right of women in Sweden to have an abortion.  

“There is room for signatures from all eight party leaders,” she said. “I have already signed on behalf of the Christian Democrats.” 

What does the so-called “abortion contract” say? 

The document itself is fairly uncontroversial.

It states simply that Sweden’s law on abortion dates back to 1974, and that it grants women the right to an abortion up until the 18th week of pregnancy, with women seeking abortions later in their pregnancy required to get permission from the National Board of Health and Welfare. 

“Those of us who have signed this document support Sweden’s abortion legislation and promise to defend it if it comes under attack from forces both within our country and from outside,” the document reads.  

Why have the Christian Democrats produced it? 

The decision of the US Supreme Court to overturn Roe vs Wade, and so allow US states to ban abortion has aroused strong feelings in Sweden, as elsewhere, and Busch is seeking to send a strong signal to distance her own Christian party from the US religious right. 

Abortion has been a recurring issue within the Christian Democrats with several politicians and party members critical of abortion. 

Lars Adaktusson, a Christian Democrat MP, was found by the Dagens Nyheter newspaper to have voted against abortion 22 times when he was a member of the European parliament. 

The party has also in the past campaigned for the right of midwives and other medical professionals who are ethically opposed to abortion not to have to take part in the procedure. 

So why aren’t all the other party leaders signing the document? 

Sweden’s governing Social Democrats, and their Green Party allies, dismissed the contract as a political gimmick designed to help the Christian Democrats distance themselves from elements of their own party critical of abortion. 

“It would perhaps be good if Ebba Busch did some homework within her own party to check that there’s 100 percent support for Sweden’s abortion legislation,” Magdalena Andersson, Sweden’s prime minister, said. “That feels like a more important measure than writing contracts between party leaders and trying to solve it that way.”  

In a debate on Swedish television, Green Party leader Märta Stenevi argued that it would be much more significant if Busch’s own MPs and MEPs all signed the document. 

It wasn’t other party leaders who needed to show commitment to abortion legislation, but “her own MPs, MEPs, and not least her proposed government partners in the Sweden Democrats and even some within the Moderate Party”. 

She said it made her “very very worried” to see that the Christian Democrats needed such a contract. “That’s why I see all this more as a clear sign that we need to move forward with protecting the right to abortion in the constitution,” she said. 

How have the other right-wing parties reacted? 

The other right-wing parties have largely backed Busch, although it’s unclear if any other party leaders are willing to actually sign the document. 

Tobias Billström, the Moderates’ group parliamentary leader, retweeted a tweet from Johan Paccamonti, a Stockholm regional politician with the Moderate Party, which criticised the Social Democrats for not signing it, however. 

“It seems to be more important to blow up a pretend conflict than to sign the Christian Democrats’ contract or look at the issue of [including abortion rights in] the constitution, like the Moderates, Liberals and Centre Party want to,” Paccamonti wrote. 

The Liberal Party on Sunday proposed protecting abortion rights in the Swedish constitution, a proposal which has since been backed by the Moderate party and the Centre Party

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