An improved model for presumed rent

Markus Kallifatides (S)

Mr. Speaker! In Sweden, according to Statistics Sweden, there are approximately 1.5 million rental apartments. The rental apartment is an important form of housing that many prefer, but the rental apartment also means that one is sometimes at the mercy of the landlord and has less control over one's own housing. The most important tool for tenants to strengthen their position and exercise a greater degree of self-determination is organization, the rental negotiation system, and the organization of tenants. Through organization, knowledge, tools, and balancing between legitimate interests in the rental market are shaped.

The utility value system aims to simulate a market condition where the rental market is in balance. The utility value shall be assessed based on the apartment's size, degree of modernity, floor plan, location within the building, repair standard, and sound insulation. Amenities that affect the utility value can include access to an elevator, garbage chute, laundry room, special storage spaces, good property service, garage, and parking space. Factors such as the building's general location, the residential environment at large, and proximity to transportation also affect the utility value. Additionally, it can be considered whether the maintenance is particularly neglected.

Mr. Speaker! In 2006, the rules on so-called presumption rent were introduced in order to improve the conditions for building new rental apartments. This was done in light of the then significantly rising costs for the new production of housing.

The intention of the presumption rent system is to ensure that the property owner, in the case of new production, has the possibility to set a rent that covers the production costs and provides a reasonable return. The rules now mean that a property owner and a tenants' organization, in the case of new production, can agree on a rent that shall be considered reasonable for 15 years and thus not be subject to the utility value principle during the presumption period.

There is a possibility of having the rent changed to the extent that is reasonable with regard to the general rental development in the area. However, for a long time, there have not been clear guidelines on how such an adjustment may be made. In two rulings from June 2022, Svea Court of Appeal, which is the final instance in this type of case, has taken a position on the issue.

The Court of Appeal concluded that presumption rents may be increased in line with the changes in the collectively negotiated use-value rents in the area, but – as a general rule – not fully. If the general rent development in the area is at most 3 percent, the presumption rent may be increased by half of the rent development. If it is higher than that, the presumption rent may, in addition, be increased by three-quarters of the part that exceeds 3 percent. These two decisions meant a significant change in many cases of the conditions that the involved parties had based on in connection with new production and the determination of presumption rent.

Mr. Speaker! The present proposition from the Tidöregeringen means that a principle is established that presumption rents as a starting point may be changed in line with the general rent development in collective annual rent negotiations. For new production going forward, this means that initial presumption rents can be set at a somewhat lower level than if annual rent changes were to be limited in accordance with currently prevailing case law.

This change is something that should contribute to increased new production of rental apartments as more households can demand even new apartments. Added to this is a procedure for adjusting rent with regard to options that the tenant desires and a procedure for dispute resolution through arbitration similar to that which applies for utility-value rents.

The bill also means that the principle becomes applicable to negotiated agreements entered into before the entry into force. Our fundamental position is that legislation should not be retroactive. There may, however, be exceptions, and in this case, it is about avoiding even more parallel systems for rent setting. After careful consideration, we have concluded that we consider a retroactive application to be justified in this case, and we have therefore chosen not to table any follow-up motion in connection with the bill.

Mr. Speaker! We Social Democrats safeguard the Swedish model in the rental market, and we reject all reforms that bypass the negotiation model or otherwise undermine the parties' model, whether they are called market rents, free rent setting, or security rents.

It is also of great importance that all parties in the rental market maintain good order on the basis of democracy and with consensus as a goal, so that the rental apartment as a form of housing can be protected and flourish.

The speech at riksdagen.se, in Swedish (opens in a new tab)

Malcolm Momodou Jallow (V)

Mr. Speaker! For over ten years, the presumptive rents have been a tool that, at best, has given a small boost to the construction of rental apartments. But let us be honest: No serious actor claims that this system has ever carried the entire housing market on its shoulders.

When we listen to today's debate, it will sound as if it is precisely the rents and only the rents that are the root of the low housing production and the housing crisis that we see today – as if the construction crisis would magically be solved with a screwdriver in the rent-setting system. It is a myth, Mr. Speaker, a politically convenient myth. The problem is not the tenants, it is the politics.

The real reason why the construction cranes are standing still in Sweden is high production costs, sky-high interest rates and, above all, the government's ideologically motivated slaughter of the investment support for rental apartments with reasonable rents. It is therefore not the tenants who have stopped the construction, but it is the government. It pulled the rug out and is now blaming the people who are left standing barefoot.

The Left Party's position is therefore crystal clear: If new production is truly to increase, more than technicalities are needed. Political courage, economic investments, and a housing policy that puts people's needs before market demands were needed – a Sweden that builds for everyone, not just for those who can afford it.

Mr. Speaker! We welcome every reform that can contribute to more housing. And yes, before interest rates exploded and the government removed the investment support, the presumptive rents also contributed to some construction. That must be admitted. Therefore, we can stand behind parts of the proposals that strengthen the system.

But let us not forget the pattern. This government's housing policy consists of two basic rules: to worsen conditions for tenants and to increase property owners' profits, always at the tenants' expense. It is an ideological foundation that governs every proposition the government places on the Riksdag's table.

But here the seriousness begins, Mr. Speaker. The Swedish legal system is built on a fundamental principle: Agreements shall be binding – period. The state shall not change the rules of the game in retrospect. Yet, this is exactly what the government proposes: that the legislative change shall apply retroactively to already entered agreements. This is nothing other than a failure of legal certainty and a direct attack against people's private finances.

The government justifies the retroactivity by stating that it would be difficult to manage two parallel sets of regulations. But if it is too difficult for the government to keep track of two sets of regulations, Mr. Speaker, how is it then going to manage to govern an entire country?

The negotiating parties can handle this. The Tenants' Association can. The property owners can. The lawyers can. The only ones who cannot handle it are the government and its political will. Retroactivity does not increase production; it only increases the suffering. No facts, no referral responses, and no calculations show that retroactivity would increase construction. There is not a single piece of evidence.

The only thing that happens is this: Tenants who already live expensively risk being forced from their homes. People who have done everything right, signed contracts and planned their finances are punished by the state itself. That is how you create homelessness, not housing.

Mr. Speaker! The Consumer Agency says no to this, the Tenants' Association says no, and several heavy referral bodies say no. But the government says: We are pushing ahead anyway. That is not leadership. That is not responsibility. It is contempt for tenants.

The housing social crisis is being exacerbated by the government's own hand. We are already in one of the worst housing crises in decades. This proposal risks pushing thousands of households over the edge. Small apartments with already unreasonably high rents can now become even more expensive retroactively. People may be forced to move without there being any cheaper alternatives.

How much should ordinary people pay for the government's political experiments? How many children will have to break away from their schools and their friends? How many will be forced to sleep on sofas in living rooms or in temporary rental solutions? This, Mr. Speaker, is not worthy of a welfare state. Therefore, the Left Party says loudly and clearly: Stop the retroactivity! Protect the tenants!

Therefore, I move for the approval of reservation 1. We demand that the older rules shall apply to the agreements signed before the legislative change. It is not just about legal principles. It is about people's homes. It is about their security. It is about their human rights. Housing is a fundamental right, Mr. Speaker. If Sweden is to have a truly just housing policy, it requires state investments, climate-smart renovations, a strong public sector, long-term perspective and, above all, a moral compass in this government.

Mr. Speaker! This bill has the potential to improve quite a lot. That is why we support part of the proposal. But the retroactivity risks destroying everything. We can do better. Sweden deserves better, and the tenants demand that we do better.

The speech at riksdagen.se, in Swedish (opens in a new tab)

Roger Hedlund (SD)

Mr. Speaker! I would like to begin by moving for the approval of the proposal in the report.

Today we are debating an improved model for presumed rent. The presumed rents were introduced in 2006 and are a good model for enabling new production in the housing stock, which is important as it enables property owners to dare to test the market.

The presumption rents enable this by providing property owners with predictability for a period of 15 years, as they can secure the income in such a way that they dare to build new production. This is a good model that has existed for a long time and which we from the Sweden Democrats' side support with conviction.

This also creates security for property owners against the possibility that, in another situation, these new production rents could be tested against the older stock. It would not create security for those property owners who choose to invest in new production. This simultaneously secures the tenants who live in a rental stock that is older. It secures them by not testing the rents and by incorporating the new production rents into the existing stock. This is, therefore, a security measure for all parties in the housing market.

In 2022, disorder was created within this system when Svea Court of Appeal made a different interpretation of the rental system with presumption rents than what was intended by the legislators. It concerned a rental gap between new production rents and the presumption rental system. Svea Court of Appeal argued that one should reduce that gap compared to the ordinary rental market with the use-value system and that the gap would be reduced over time.

This creates unpredictability for those who have built in new production if they can ensure their income over a period of 15 years. The interpretation that the Svea Court of Appeal made created a turmoil that we are now presenting new proposals against, and we expect to receive broad support for the government's proposal with the support of the Sweden Democrats – i.e., the Tidö proposal – which is on the table today.

The new legislation with presumption rents means that, in general, rents can be increased based on the basic negotiated presumption rent. This means that it is still possible to ensure higher rents for new production within the presumption rent system so that the presumption rent system can continue to function and enable property owners to feel secure for a period of 15 years before the system is tested in the use-value system.

At the same time, the new proposals on the table today mean that move-in rents can be set lower even in the presumption rent system. This makes it possible to have other rents in the presumption rent system than just the basic negotiated presumption rent. It is therefore a good change for all parties involved.

The new legislation provides good conditions for the housing market. After 15 years, the presumption rent transitions to the regular rent setting system, where one can approach other rent levels. This proposal enters into force on 1 January 2026.

With these temporarily higher rents, we create conditions for new production, which 15 years later transitions to the ordinary rent-setting system. It ensures a prerequisite for new production, but it also ensures that the new rents in the presumption system after 15 years transition to the normal rent level system. It creates security for everyone living in rental housing by ensuring they also are included in the utility value system, i.e., the normal rent-setting system, where it is also ensured that the rents are at a certain level. It is important, as housing is a fundamental prerequisite in society, that one can thus predict the rent development.

Without the current rental system, apart from the presumptive rents, the residents in Sweden would have been significantly affected by the rent changes that could have occurred if we had had a market rental system.

To this can be added the migration levels to Sweden in recent years with a peak in 2016 that created an enormous housing shortage for a long period. The migration policy would have been devastating for the tenants' private finances if we had a market rent system in Sweden today.

It is also the case with a hypothetical red-green government. We know that the red-greens have previously advocated for high migration. We also know that in a previous such constellation, they have negotiated and accepted market rents. Market rents in combination with high migration is a very bad equation. It would affect Swedish tenants' private finances palpably negatively.

With this system, we enable new production while simultaneously monitoring the opportunities for our tenants to have reasonable levels on the rental market.

The speech at riksdagen.se, in Swedish (opens in a new tab)

David Josefsson (M)

Mr. Speaker! In Sweden, the rental housing sector is treated with neglect. The system is being hollowed out, and the gaps are widening right before our eyes. Today, the Swedish housing market and the rental housing market in particular are characterized by high thresholds, low mobility, and poor incentives for landlords to develop or even manage their properties. The result is a housing shortage and years-long housing queues, but unfortunately also houses that cannot be maintained.

At Boplats Väst, which mediates rental housing in my hometown of Gothenburg and the surrounding area, the average waiting time last year was just over six and a half years. In the statistics, there are apartments where the applicant has been in the queue for up to 20 years. It is hardest for young people and those who lack resources to enter the housing market – people who are referred to insecure and expensive second-hand accommodations. One can calmly assert, Mr. Speaker, that the need for reform on the Swedish rental market is enormous.

Being able to rent one's home is an important prerequisite for a functioning housing market. This applies regardless of whether one rents one's home because one only plans to live there for a shorter period, because one does not have the financial means to buy one's home, or simply because one thinks it is more convenient to rent and pay the landlord to take responsibility for everything from maintenance to renovations.

Mr. Speaker! Between 2021 and 2023, the new construction of rental apartments in Sweden was halved from just over 33,000 apartments to just under 16,000 apartments. There are several reasons why the number of newly built apartments decreased: the economy slowed down, inflation picked up, and interest rates were raised.

One contributing cause was also two Court of Appeal judgments from 2022, which in practice undermined the basis for what is called the presumption rent system. Presumption rent was introduced in 2006, and unlike the utility value system, it can be simplified to say that the rents are set based on construction costs and reasonable return.

In the cases noted from 2022, however, the Svea Court of Appeal ruled that the rents in the presumption rent system should not be increased correspondingly to the rent increase in the area – in accordance with the intention of the legislation. Instead, the rents should be increased by the corresponding half during rent development up to 3 percent and thereafter by three-quarters. This drastically worsened the calculation for newly produced rental apartments. In many cases, construction was made impossible entirely, as the uncertainty regarding whether the project was viable at all became too great.

Mr. Speaker! When the Court of Appeal judgments arrived, the government noted that the presumption rent was in danger and therefore acted resolutely to save the reform. The heading of the bill we are now discussing is An improved model for presumption rent. The heading could just as easily have been A restored model for presumption rent. Now the main rule is back, as it was intended from the beginning, that presumption rents are increased correspondingly to the use-value rents.

The system is also improved in such a way that the tenant's power is strengthened with expanded opportunities to influence the rent. Within the framework of presumption rent, the landlord and tenant are now permitted to agree on additions or deductions to the rent based on the tenant's wishes. Does one want a dishwasher and a private washing machine, or can one manage without and want to save money? Now the tenant has the power to decide.

Security also increases for both tenant and landlord. In a dispute over rent setting, an arbitrator shall be appointed who shall provide a written recommendation within six weeks. It is a fast and clear process that provides security for both parties.

Together with the government's offensive housing policy, where we simplify regulations, shorten lead times and increase the buildable land, conditions are now being created so that more rental apartments can be built when the economy slowly turns upwards.

Mr. Speaker! The rental housing has not been protected in Sweden. We see the consequences in long housing queues, housing shortages, and that, above all, young people are left out. Those who have not entered the housing market are referred to insecure and expensive sublets, despite having jobs and income.

An important part of the social contract is that people are given a reasonable chance to obtain their own housing. A home is not just a roof over one's head. It provides security and cohesion. It is relationships that are created and dreams that come true.

The current utility value system is deeply unfair and causes many people to feel that the social contract is not being fulfilled. We Moderates want to change that. Today's decision is a small step on the way toward a better functioning housing market.

With that, I move for approval of the committee's proposal for a decision.

The speech at riksdagen.se, in Swedish (opens in a new tab)

Malcolm Momodou Jallow (V)

Mr. Speaker! I cannot help it, but I am surprised every time I hear a Moderate or one of the members of the Tidö Government say that they have an offensive housing policy – when thousands of construction companies are going bankrupt and we have never had as much homelessness in this country as we have today. We have never had as many children evicted from their homes as we have today. Still, David Josefsson says that the government has an offensive housing policy. I do not know whether it is laughable or whether one should cry. However, that was not what I was going to ask about.

I want to say first that I think there are many parts in this that are very good. What I want to ask concerns the fact that the Swedish legal system is based on a fundamental principle that agreements shall be binding. When one enters into an agreement, it is that agreement that shall apply – period. The state should not change the rules of the game in hindsight, as is being attempted now. Yet, it is exactly what the government proposes: that the legislative change shall apply retroactively for already entered agreements.

It is nothing less than a failure when it comes to legal certainty and a direct attack on people's private finances. When one enters into agreements, one plans one's finances based on this. Now, suddenly, new rules arrive. This will have dreadful consequences for very many people, and the retroactivity will not increase production. It only increases the suffering for very many people.

There are no facts, no referral responses, and no calculations showing that the retroactivity would increase construction. The only thing that will happen is that many people will have to leave their homes. They will not have the opportunity to stay, even though they had an agreement before these new rules.

I want to ask how David Josefsson intends to handle precisely the retroactivity and its consequences for tenants who have already entered into agreements.

The speech at riksdagen.se, in Swedish (opens in a new tab)

David Josefsson (M)

Mr. Speaker! I thank Malcolm Momodou Jallow for the question. I note that it is not only I, David Josefsson, who think this. We can note that there is a broad political consensus in this chamber that we actually shall save the presumption rent system.

One can discuss what it actually is that is changing or what is retroactive. The presumption rent system has existed in Sweden since 2006. It has functioned according to the principle that rents should increase corresponding to the use-value principle. Then a new legal interpretation from Svea Court of Appeal came in 2022 which overturned all of this and caused that which there was a broad political consensus on to no longer apply.

I think that we should actually change the system back to how we as legislators think it should function – and as mentioned, there is a broad political consensus on this. It is also important that there is a predictability and a comparability in the system.

I agree with Malcolm Momodou Jallow that this will not retroactively lead to new housing being built, but it will lead to new housing being built so that we restore the system – because construction decreased. It will, however, guarantee that properties can actually be maintained, and I think that is important. That is why the rent should be adjusted for the corresponding cost increase, or the corresponding use-value system. It is so that people have the right to live in a property in an apartment that can be maintained and where one can pay for water, sewage, electricity, and all the costs that come with a home.

I am not prepared to say that the rent should not be able to be raised correspondingly so that we get worse housing in Sweden. That Vänsterpartiet can stand behind such an idea is quite telling – it is Vänsterpartiet that stands behind it. There is a broad majority for actually changing the system.

The speech at riksdagen.se, in Swedish (opens in a new tab)

Malcolm Momodou Jallow (V)

Mr. Speaker! I thank David Josefsson, but I note that Josefsson has not answered my question regarding retroactivity.

I state very clearly that this proposal for legislation has very good parts, which we support. But the part I want an answer on concerns precisely the retroactivity.

Agreements must be honored. Why should people who already have their rents agreed, determined and decided, and who have planned their finances based on those agreements, now suddenly have to change? For me, this is deeply problematic.

As I have previously said and as also appears from the reservation we have, we consider that the older provisions shall apply to all lease agreements and negotiated agreements on presumptive rent entered into before the entry into force of the legislative changes being discussed today. We cannot change the agreements in the middle. We cannot change the rules of the game in the middle of the game. But that is what this implies.

Together with several referral bodies, Vänsterpartiet argues that the government's proposal on retroactive application risks having extra negative consequences for those tenants who have entered into lease agreements in the context of the Svea Court of Appeal's rulings. It is a fact. Most referral bodies have actually raised this.

David Josefsson mentions that there is an agreement on this within the majority. But the referral bodies and the tenants are not in agreement on this, because it will affect them. In these days, when people borrow money to be able to pay their rents and bills, we should not change the rules in the middle of the game in such a way that they will have to pay even more.

Answer the question!

The speech at riksdagen.se, in Swedish (opens in a new tab)

David Josefsson (M)

Mr. Speaker! I believe I was clear and answered the question. I, the government, and a broad majority in this chamber think, as I have said, that it is important that the presumption rent system continues to function. That is why we are restoring it. Therefore, I think it is incorrect to speak of a retroactive legislative change. What we are actually doing is restoring the legislation to how it has looked since 2006. Had Malcolm Momodou Jallow listened to what I said in my previous answer, he would have heard that I explained this clearly. I also think it is important that a tenant should know that the rent pays for the cost increases that lie behind it.

Now the member does not have the opportunity to answer me, because he does not have the right to further replies. But here is something that I can be a bit upset about. Malcolm Momodou Jallow began the exchange of replies by saying that we have a situation in this country where the rental market does not function, where people are evicted, where we have a structural homelessness and where people do not get into the housing market. Here we agree. One could think that the representative of the Vänsterpartiet would then stand together with me and say: Yes, but now we are going to reform this. The system does not work. We must change how the rents are set.

But that is not what one does. One is not prepared to change the system. One obviously cannot look the people who are being evicted in the eyes and say: I want to change the system. Instead, one says: No, I do not want to change it. I stand behind the system that makes you homeless, that children are evicted and that housing is not built. That is what I do not want to change.

What is most fascinating in the Swedish housing debate right now is that there is no greater political consensus regarding changing the fundamental problems in the Swedish rental market that cause the rental market to not function and people to end up in homelessness. We here should take the political responsibility to change this.

The speech at riksdagen.se, in Swedish (opens in a new tab)

Amanda Palmstierna (MP)

Mr. Speaker! Members and listeners! Today we are debating presumption rents. It is a rather complicated word, but what it means are rents that are set for newly produced housing for a limited period: 15 years. The purpose of these rents is to provide incentives to build more rental housing. We really need more rental housing. There is a shortage of such housing in Sweden today.

To provide a background to the proposal that is on the table today, I intend to take the liberty of doing a quick sweep over the history of rent setting. Historically, we have fluctuated between completely free rent setting, where market forces have ruled, to sharp rent regulation. Finally, we have landed on the model that we have today: a negotiation model, the Swedish model.

We are going back a long way. When Sweden was industrialized, people flocked to the cities to find work. They were offered housing in slum areas. There was great distress and great misery, and there were also very high rents. The housing crisis was investigated. The well-known author af Geijerstam described the stench that hung over the areas. So great was the distress.

At the beginning of the 1900s, the Riksdag passed a decision on the first rent law, but people still believed in free rent setting and placed all power in the hands of the landlords. The misery continued, as did the housing shortage. Then the state tried to take control. Authorities were to approve the rent. An attempt was also made to pass a proposal in the Riksdag for stronger state control, but it actually fell by only one vote – it was dramatic politics even at that time. It thus became free rent setting once again.

Overcrowding spread, and the birth rate decreased. The Myrdals wrote the well-known book Crisis in the Population Question, and it led to something they called children's homes. It was the era's form of social housing. But in the rest of the market, it was still chaos. It was tough, and many evictions occurred.

Then we come to the Second World War. At that time, the state suddenly intervenes and tries to solve the acute crisis with strict rent regulation. Laws are also introduced stating that the municipalities are responsible for ensuring that people have a roof over their heads and that tenants have the right to stay if they behave themselves. The tenants begin to organize and negotiate collectively.

But the strict state rent regulation was not intended to be permanent, but was introduced to solve the acute crisis. It was therefore phased out after the war. Now people were asking a lot – how should we actually handle housing policy? One had not quite found a model that worked.

In the 60s and 70s, the system we have today arrived, with the utility value system and the negotiation act. It has three cornerstones. The first is freedom of contract – the landlord and the tenant can freely agree on what the rent shall be. The second is that the tenant has the right at any time to turn to the rent tribunal to examine whether the rent is reasonable. The third is that what is reasonable is determined through a comparison with other apartments in the locality that have the same utility value, that is, the same area, number of rooms, location, and so on. The rent is reasonable if it roughly corresponds with the rents of those apartments. It should not be significantly higher. This is a model to balance market forces and incentives to build new against the tenants' security.

At the beginning of the 2000s, this came about with presumptive rent to increase the incentives for building new. The property owners and the Tenants' Association (Hyresgästföreningen) agreed on the system, and that negotiation model still remains.

What is on the table today is a development of this proposal. The reason is that a changed legal situation complicated it quite a bit. It concerns the judgments that we have heard about.

Something that we in Miljöpartiet find very strange, however, is this issue of retroactivity. When an agreement has been entered into, it should apply, we believe. One simply must know which rent is to apply. Entered agreements should remain fixed. It is also something that Hyresgästföreningen and Konsumentverket consider important. They do not think it is reasonable to use retroactivity and tear up entered agreements. There is also no support for the idea that it would increase new production; instead, it only becomes worse for the tenants.

We think it is important to keep the rent down in many different ways. In addition to the presumption rent, we are investing in state construction loans. We also have state investment grants that the government has removed but which we want to keep and develop. The purpose of them is to keep down construction costs to ensure that there are reasonable rents and that the rent for new production does not become too high. One can also set requirements that there should be reduced climate emissions and climate-smart housing.

We must, therefore, see the whole package. It is important that the state steps in and takes a clear responsibility and does not leave the municipalities in the lurch. The rent must be able to be kept down even through construction loans and investment support.

Regarding the presumption rent, we support the proposal in broad terms. Hyresgästföreningen and Fastighetsägarna also think it is a good proposal. There is a balance in all of this, and the Swedish model is protected. We think that is very good. But regarding the retroactivity specifically, we are very concerned. With that, I move for the approval of Miljöpartiet's reservation number 1.

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Patrik Karlson (L)

Mr. Speaker! I take the opportunity to begin by expressing my support for the committee's proposed decision.

The rules for presumption rents, which we are standing here and debating today, were introduced in 2006 to facilitate new construction. Property owners and tenant organizations could agree on a rent level that was assumed to be reasonable for 15 years without being compared to utility value rents. The idea was to provide predictability. The rent needed to cover costs and provide a reasonable return would remain fixed, so that construction projects would actually be completed. At the same time, annual adjustments were permitted to the extent that it was reasonable, taking into account the general rent development in the area, so that the rent could be adjusted if the cost situation changed.

Frankly, no one expected this to become particularly controversial. The problem was that the law became unclear regarding how these annual adjustments were to be made.

In June 2022, the Svea Court of Appeal finally clarified the matter, and the result was disappointing. The Court of Appeal interpreted the rules such that presumption rents could be increased by at most half of the general rent increase up to 3 percent. If the rent increase was higher than 3 percent, only 75 percent of the exceeding part could be added to the rent. Only half of the rent increase in the community could therefore be implemented for new production rents under normal circumstances.

If the annual negotiations in a municipality resulted in, for example, a 4 percent general rent increase, a presumption rent, according to the model that the Court of Appeal developed, could only be raised by approximately 2 ½ percent. If the rent increase was 3 percent or lower, one only received half. Only in exceptional cases could an additional increase be justified. The main rule was now clear.

These judgments were not good for the industry. In plain terms, the Court of Appeal's ruling meant that the rental development for new rental apartments was limited to approximately half of the level that applied for other apartments.

I will paint a picture of a scenario for how the previous order could go completely wrong in practice. Imagine that a developer in 2021 planned for a rental building with presumption rent. The calculation worked out if the rent initially was set at 10,000 kronor for an apartment, under the assumption that the rent could then be adjusted upwards in line with other rents over the next 15 years.

After the Svea Court of Appeal's ruling in 2022, it was suddenly understood that the rent could not be fully included – perhaps one could only make about half of the normal increase. What happened then? Well, one was forced to either increase the move-in rent even more from the start – perhaps to around 12,000 kronor – to compensate for the missing future adjustments or put the project on ice. Neither of these alternatives was good for either the tenants or society as a whole. This very phenomenon has been witnessed by several actors when they have seen the effects of the Court of Appeal's judgment.

Mr. Speaker! An important point in this context is the broad consensus that exists regarding our need to carry out this reform. It is not common for Hyresgästföreningen, Fastighetsägarna, and Sveriges Allmännytta – the parties on both sides of the rental market – to stand united behind a change, but in this case, they do. The same applies within politics. It gives the proposal considerable weight.

The proposed reform therefore, in short, aims to expand the possibilities to adjust presumed rents on an ongoing basis.

The proposition also entails improvements that increase the attractiveness of rental housing. We are now introducing an opportunity for tenants in new constructions to make individual options or exclusions. One can thus adapt one's housing in exchange for an adjustment of the rent. This has not been possible previously, but now these options are equated with others.

Furthermore, landlords get better opportunities to carry out urgent modernizations of the property even during the presumption period. This ensures that newly produced houses can continue to maintain high quality and standard over time, which benefits the tenants.

Not least, a faster dispute resolution is introduced for cases where the parties cannot agree on an initial presumptive rent or annual adjustment. Today, protracted negotiations can delay construction starts, but in the future, an impartial arbitrator shall be able to provide a recommendation within ten weeks. It is an efficiency gain that benefits all parties and ensures that projects do not get stuck in limbo.

The speech at riksdagen.se, in Swedish (opens in a new tab)

Malcolm Momodou Jallow (V)

Mr. Speaker! I previously asked a question to David Josefsson from Moderaterna, but I received no answer. I hope that I receive an answer from Patrik Karlson. He is usually able to give reasonable answers to questions, and I hope that will be the case here today as well.

As I mentioned, this proposal is good in many respects. I think it is good that the regulatory framework, or the system, is made clearer and more flexible. However, I do not understand why it must be retroactive. In Sweden, we have as a basic principle of the rule of law that entered into agreements shall apply. The state should not change the rules of the game in retrospect, i.e., after agreements have been entered into.

The question is: Do you believe in the basic principle that entered agreements are binding? Does Patrik Karlson believe in this principle? Does he think that this is what applies in Sweden and that it is right and proper? Why, in that case, does he want legislation that will retroactively affect many tenants? These tenants have proceeded based on the rental agreement they have had, but because of the law that the government wants to pass in this chamber, they will no longer be able to know which rent applies. Is that right and proper? Shall we now ignore the rule of law's basic principle that entered agreements are binding?

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Patrik Karlson (L)

Mr. Speaker! I thank Malcolm Momodou Jallow for the question.

I want to say first that I am very pleased that we have a broad consensus that these improvements of the presumptive rents need to be implemented.

Principles are important in legislation, and normally new rules should not disturb already entered agreements. We are, however, facing a different situation on the housing market that requires powerful and clear measures.

This is a question that the government has considered carefully. It is clear that we have listened to the referral bodies, but we have found that the benefit for the whole in this case outweighs the aforementioned principle. The purpose of this bill is to create better conditions for building new rental apartments and securing reasonable rents. That is the whole point. To succeed with this, one must sometimes make somewhat unusual decisions, I would like to argue.

One of the heaviest reasons in this case – and this we have also heard put forward from parts of the opposition; precisely when it comes to the question of retroactivity, there is broad agreement in the chamber – is to avoid a split rental system for a longer period. If older agreements were to be exempted, we would have two parallel sets of rules for rent adjustments for about 15 years ahead – one for old and one for new. The rental pricing system is already complex enough, I would like to assert. If one had to navigate through double systems for up to 15 years ahead, it would become even more difficult to oversee.

For all negotiating parties – the landlords and the tenants' organizations – it would become extremely complicated to handle two different sets of rules for such a long period. By letting the legislative changes apply to all presumption rents, we create a uniform and clear system from day one.

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Malcolm Momodou Jallow (V)

Mr. Speaker! Thank you very much, Patrik Karlson, for at least trying to answer the question!

When it comes to the double legislations, I think it should not be so difficult for a government, which is to govern an entire country, to keep track of two rules. Just as I mentioned in my speech, the parties have no problem having it. The Tenants' Association can keep track, and the property owners can keep track. We have plenty of lawyers who can keep track of this. The only one who cannot manage it is, therefore, the government, and that is a matter of political will and nothing else.

It is not only Vänsterpartiet that feels this way, but it is several referral bodies that, together with Vänsterpartiet, believe that the proposal for retroactive application risks having extra negative consequences for the tenant who has entered into a lease agreement against the background of the Svea Court of Appeal's ruling. This will affect a great number of people.

Just as Patrik Karlson knows, we have a housing crisis today. Sweden has never had such a large crisis in modern times as it does today. There are many people who are poor; there are over 200,000 more poor people living in this country today. We see people being evicted from their homes, we see overcrowding, and we see pensioners who cannot afford to live.

In that situation, the government wants to introduce legislation that risks increasing people's expenses, that is to say, their rents. People have entered into agreements where it is very clearly stated what rent applies, but suddenly the politicians come and say: No, what you have agreed upon no longer applies, but now the rents will be raised.

In these times, when people are struggling to have food to eat, I do not think this is reasonable. Please Patrik Karlson, explain to the tenants how they are to manage this proposal from the Tidö parties! It will affect very many of those who are struggling today.

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Patrik Karlson (L)

Mr. Speaker! We can perhaps begin by stating that it probably does not matter how I answer; I will probably still not receive approval from Member Malcolm Momodou Jallow for how I attempt or can answer a question.

Let me simply state that we are listening to the referral bodies. We have carefully weighed their opinions. Our basic position is, as mentioned, also that retroactive legislation should normally be avoided, but after careful consideration, we have made the assessment that the benefit in this case outweighs the fears.

As was just mentioned, we are in the middle of a housing crisis, but it also seems that everything happening in our global environment and what is the underlying cause of this has completely escaped the member's notice.

I still see advantages that parts of the opposition overlook by carrying out this reform. By expanding the possibility to adjust presumption rents over time, a better economy is created in new production projects, which in turn will contribute to more housing that is demanded by the citizens. I would argue that it is a concrete way in which the reform will benefit both tenants, developers, and property owners.

This is about the whole and about the future. Yes, a handful of tenants will now have to adapt to the new rules, but they continue to be protected in the system by the fact that the adjustments are linked to the general rental development in the area. It is not like anyone is going to face any unreasonable rent increases; that is a scare tactic that has no basis in reality. Instead, we gain from a simpler and more dynamic system that will stimulate the production of more rental apartments.

We are convinced that this is the right way forward to achieve a more functioning housing market.

The deliberation was hereby concluded.

(Decisions were made under § 16.)

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