Municipal housing companies in Sweden: On or off the market?

Abstract

Sweden has a tradition of a housing policy with large, general subsidies and a public housing sector competing on equal terms with the private rented sector. This policy is now threatened by a depressed economic situation with increased income differences between households, occurring at the same time as government has decided to cut back on general housing subsidies. The new situation has placed municipal housing companies in a complicated situation. They must be more efficient and more businesslike to be able to handle a harsher economic situation. It is also possible that the municipal owner will react by selling part or all of the municipal housing stock. The companies themselves may react by moving rents more towards market levels and by accepting a socially more segmented stock than before. This is in conflict with the traditional social role of municipal housing in Sweden, which is to provide housing for all types of households, irrespective of income and ethnicity. This is more demanding than it used to be, as a result of increased impoverishment among typical municipal tenants. In this context the social housing sector is faced with a choice; to try to keep as much as possible of the traditional ‘mainstream’ role, or to split the stock into one mainstream part and another more social‐oriented part, specially designated for residualised households.