Municipal Housing Companies in Sweden – Social by Default

Abstract

An important issue in Sweden is the extent to which the public (or municipal) housing sector is a tenure form open to everyone and is on a level playing field with other tenure forms. The issue became more important when the European Union stated that public companies must have a pronounced social role, given their favourable institutional position. This paper reveals that vulnerable families are overrepresented in public housing, compared to other tenure forms, especially in the metropolitan cities and in the larger cities. This pattern is less pronounced in other cities and in rural areas. An index is constructed which measures the share of vulnerable families within a municipal housing company, when the share of vulnerable families within the municipality is controlled for. This index of social responsibility is used as a dependent variable in a regression analysis, using all Swedish municipalities as a database. The analysis reveals that the value of the index increases with a diminishing relative size of the municipal housing company. This effect is particularly strong for families on social benefits and immigrant families from poor countries. We also find evidence that the composition of the housing stock as well as the political regime in a municipality is correlated to the “index of social responsibility”. From an EU point of view, it is obvious that vulnerable families to a large extent are accommodated in the municipal housing sector. The relative size of this sector will in most cases determine the degree of dilution. In this respect, there is no separate social policy in public housing companies in Sweden. Instead, they seem to be social by default.