(cont. from § 9) Response to interpellation 2023/24:113 on housing construction

Eva Lindh (S)

Mr. Speaker! Sweden is in a construction crisis. Housing construction is falling sharply across the entire country. During the first half of the year, it decreased by 57 percent compared to the previous year. At the same time, nine out of ten Swedes already live in a municipality with a housing shortage. We are now seeing the largest decline in housing construction since the 90s crisis. It is serious.

What proposals does the government have to address the construction crisis? There are three proposals that in some way concern matters related to construction.

The first is the temporary increase of the ceiling for the rotavdrag (deduction for renovation). It is known that the effect of the rotavdrag has diminished. We Social Democrats do not want to raise the ceiling for the rotavdrag, simply because it is misguided economic policy. It is completely unreasonable to make that prioritization, that it should become cheaper for a high-income earner to luxury-renovate their residence in or outside Sweden, while others around in Sweden struggle to be able to pay the bills. The proposal also does not mean that any new homes are added.

The second thing is that the government proposes a bonus of 60 million to municipalities that establish detailed plans to increase the supply of planned land for the construction of small houses. We do not know what that will actually mean either. It is unclear.

The third proposal is what this debate is actually about: a stimulus of 20 million to the municipalities to detail-plan and enable conversions of office premises into housing. It is the only proposal that might still aim at getting more housing in Sweden.

That is why I asked the Minister for Housing how many new homes it is expected that the 20 million will lead to. The answer is that it has previously led to 2,500 new homes per year.

Does the Minister for Housing really believe that it would have the effect even now? The construction cranes are standing still in many other areas. Why would construction cranes become so active just to convert premises into housing? The question remains, then. Even though it has previously led to 2,500 new homes, I wonder what effect is expected in the coming years, when we are in a time of construction crisis.

In the best-case scenario, as said, it might lead to 2,500 new homes - if I count kindly - when it actually needs to be built around 67,000 homes per year. Next year it might come up to 19,000 or 20,000. This will therefore result in an enormous housing shortage in the coming years while many people are waiting for and seeking a home.

I wonder if the Minister for Housing and the government truly see the seriousness of the situation. Does one have nothing more to offer than what is in the budget today?

I look forward to this debate, Mr. Speaker.

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Markus Kallifatides (S)

Mr. Speaker! Thank you, Minister, for the answer to Eva Lindh's pressing interpellation! I intend to contribute to the debate with a concrete question to the Minister, which I will come to shortly.

It is a very serious situation in the construction sector and the housing supply situation in Sweden. I love words, Mr. Speaker, but I also like figures. I believe that both the interpellator Eva Lindh and the Minister Andreas Carlson well understand that in order for premises to be converted into housing, it is sometimes required that new detailed plans are established. In her interpellation, Eva Lindh requests the government's analysis of the effects. I want to give the Minister the opportunity to elaborate on the analysis that was in the answer provided before today's question period.

The answer stated that the conversion of premises into housing over the last 20 years has resulted in an average of 2,500 new homes per year. Now we are talking about an additional investment to the municipalities of 20 million kronor. My question then is: What has the municipal work over these 20 years looking back have cost the municipalities? What has it cost the municipalities to get 2,500 homes per year on average? And what can one imagine, against that background, that 20 million in additional funding could provide?

I am requesting, Mr. Speaker, quite simply whether the Minister can at least give us an estimate: How many more homes will we get through this proposal? We Social Democrats do not oppose the proposal, but we support conversion.

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Mikael Eskilandersson (SD)

Mr. Speaker! Do you have nothing more to contribute, asked Eva Lindh. Markus Kallifatides was, in a sense, on the same line. I must ask: What did the Social Democrats actually have to contribute during their eight years?

There is a survey that HSB had Sifo conduct and which was presented in March 2020. There, nine out of ten perceived that the government had done nothing about the housing shortage in the last year, i.e., 2019. In the same survey, 31 percent believed that the government would do more moving forward – we can now, in hindsight, state that it was 31 percent who were wrong. To then stand here and almost protest that it would be a low sum to the municipalities, while one oneself did not even think in those terms that perhaps some land would be needed to build on, I find offensive.

The biggest overarching problem today is the interest rate, and that is due to inflation. Had we had a stable interest rate and moderate inflation, it would have been best for getting construction moving. However, it is nothing that one can simply decide on. I therefore demand a certain degree of self-criticism regarding why we have ended up in the situation we have ended up in. There may well be a connection, Mr. Speaker, between the previously conducted policy and how things look today.

The Social Democrats had eight years to make changes. The previous government could have invested in making more land available and improving the regulations so that unnecessary time is not wasted. But what did they actually do from the Social Democrats' side? The only policy they pursued was to pump money into construction companies so that they would build rental apartments - nothing to facilitate for ordinary villas or owner-occupied housing.

At the same time, the ministerial post was bounced around among the ministers in the previous government. There were more housing ministers than proposals that positively influenced construction during the eight years. The proposals that did nevertheless reach this chamber were not only bad but also often so poorly anchored that they fell, for example, the coastal protection. Climate declarations are also not something that provides more housing.

Despite knowing that most people want to own their home, even a majority of those who rent, all initiatives on rental apartments stopped at: Yes, we need rental apartments. Yes, it is better to rent a home than to have no home at all. But somewhere, the construction should also correspond to what is actually in demand.

Mr. Speaker! I also become almost terrified when I hear that it is about luxury renovations. Now Leif Nysmed comes up as the next speaker, and he might be able to certify that it is not a luxury renovation when one replaces a normal kitchen in a normal home. One quickly reaches quite large sums, and that is known by everyone who has in some way worked with or personally renovated their house. It is not luxury renovations because we see increased rotavdrag.

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Leif Nysmed (S)

Mr. Speaker! I note that there is a fair amount of falsehood in the speaker's chair, especially from the Sweden Democrats' side, in this debate - also regarding things that do not so much concern the interpellation itself.

We have previously had an interpellation debate with the Minister for Housing where we established a number of points that were implemented during the previous mandate period. Mikael Eskilandersson is welcome to look at or read through it so that he has correct information the next time he takes the floor.

Regarding the number of new homes during the previous mandate period, it was not only rental apartments that were built. During the period 2015-2022, more than 450,000 new homes were established, almost half a million! That is significantly more than what was established during the Alliance years, which was approximately half of this. It is a stark difference.

Another reason why the situation looks the way it does today is that this SD government stopped approximately 30,000 rental apartments at the turn of the year when they abruptly removed the investment support, even though they had promised in the election that it would be completed based on the applications that came in.

It is quite bold to stand here in the speaker's chair and complain about what the previous government did or did not do when one has nothing of one's own to show for it. It is remarkable.

I would like to stick to the topic of the interpellation debate for a little while longer, as I find it interesting. In several debates and seminars I have listened to, it has emerged that there is a need for changes to convert premises into housing. There is nothing wrong with that, quite the opposite. We also welcome that. But again, there must be a demand for these homes. There must be an opportunity to demand them. This is what it is about: If there is no demand, no premises will be converted into new homes. It is about the prices. It is about how we can produce housing that normal income earners can actually demand. Otherwise, it will not happen. In that regard, I think the government's answer is conspicuously absent. Minister Andreas Carlson is welcome to come back with how he intends to increase demand again.

Fighting inflation is the priority, as said, but I experienced the 90s. We will return to that in the debate a bit later. Back then, people talked about how if only interest rates could be brought down below 10 percent, housing construction would start up again. But, Mr. Speaker, it takes more than just lowered inflation and lowered interest rates for the wheels to start turning again; I can say that with certainty from experience.

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Statsrådet Andreas Carlson (KD)

Mr. Speaker! There are many different issues at stake in this interpellation debate. It naturally requires more than just inflation and interest rates going down for construction to get started. But one cannot escape that it is the primary cause and one of the biggest factors behind the decline in construction that we are seeing now. It is also a major explanation for why demand is faltering, as Leif Nysmed was pointing out just a moment ago.

Mr. Speaker! I will return to the interpellant's questions at the end of her contribution so that I do not forget them. The question was whether we see the seriousness. Yes, we see the seriousness. Another question I believe was: Do you not have more to contribute? Yes, we have more to contribute. What the interpellation is about is a measure, and as I said in the answer, it is part of the measure to enable more conversions.

We have a series of different steps that have been taken during the first year of the government, which we have presented. There are investigations that have been commissioned. It concerns structural reforms which obviously would have needed to be in place earlier for us to have been better equipped in the economically difficult time we now find ourselves in.

During the previous government's eight years, more housing was built than today; I agree with Leif Nysmed on that. But not during a single year were as many or more dwellings completed as there was need for according to the forecasts that existed. It is therefore time for self-criticism. I am not pointing fingers anywhere here, but we take responsibility in a difficult time for Sweden by having a slightly tightening budget so as not to counteract the fight against inflation. We are producing the structural reforms required to achieve a better functioning housing market and to dampen effects here and now.

The rotation drag is first and foremost about saving some jobs in a sector that is very vulnerable right now and where we risk facing unemployment. It is a sector that labor is now leaving to enter other sectors and which then will not be available when the economy finally turns. These are experiences we have gained from the financial crisis.

Speaking of the financial crisis, it occurred during the years that the Alliance government led the country, so it is a simple point that Leif Nysmed is trying to make here in the chamber when he says that construction faltered during the Alliance years and that it was "gold and green forests" during the Social Democrats' government. But back then, money was almost free, and it was a period of high economic growth for a very long time. It is not so strange that construction increased then, but it did not, however, increase as much as it needed to to meet the needs that existed. This is partly due to the fact that the structural reforms needed in the market were not in place.

Such a structural reform and such work are about making land available in attractive locations. The stimulus that currently exists in the budget for small house construction is intended to address a part of that.

Regarding the stimulus that the interpellation concerns for converting premises into housing, there has not been such support previously. I am very pleased that the Social Democrats are showing their support for this proposal and that we will see what consequences it will have.

We will return to the design of the proposal, and we will also see how many premises can be converted into housing. It depends on several different factors and not just on this stimulus for municipalities to change in detailed development plans to enable construction. But it is an important part, and we will hopefully see that more premises will be converted into housing with this very important step, which I am pleased that the Social Democrats also support.

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Eva Lindh (S)

Mr. Speaker! Let me begin with what constitutes sufficient housing construction. We still have a housing shortage. For a long time, too little has been built.

But if you look at the curves, you can see that there is a big difference compared to the time we had an S-led government. The Minister says that it is because money was almost free and that it is a matter of bad luck. But then that bad luck must be chasing Moderates, Christian Democrats, and Liberals because we built so little earlier and we actually built very much more during the time we led the government. In any case - we need to build more housing. That is also why we feel a great concern that we are now in the middle of a construction crisis. Far too little is being built.

Mikael Eskilandersson of the Sweden Democrats said that the Social Democrats are doing nothing. We had a series of proposals in our budget, which unfortunately will not become a reality. We cannot afford to let housing construction collapse, and therefore we had a good number of initiatives concerning production support aimed at smaller towns, both regarding construction for students and in areas with large industrial establishments. We also had state construction credits and several other proposals in our budget. I just wanted to say this.

So, what is the situation? I have spoken with several people at home. Here in Östergötland, the labor shortage is now increasing. Bankruptcies are also increasing significantly. Most recently this week, a company went bankrupt. This is primarily about how many homes we will get moving forward.

But we will also get what the Minister is referring to: a skills shortage ahead, when it hopefully turns around. And speaking of that, which is worrying, in Östergötland it is only one in four of those who completed the construction program who now have jobs - one in four. The others risk not coming back, just as we have seen during the 90s. Then we are left with a housing shortage.

My question is about what the government is doing. What will the initiatives that are being made entail? They are insufficient. Just regarding the 20 million, it is exactly as my colleague Kallifatides was pointing out: We are not against converting premises into housing. We also think that it can be good.

But the problem is that it will not make any major difference, even if it could become a couple thousand. It is good, but what else is the government doing to speed up construction in Sweden? Will it really lead to those 2,500 homes? We haven't really received an answer on that yet. In that case, it would be something that goes against the trend that all construction is stalling, and it would only be about converting premises into housing.

But what more can the government do? We are in a construction crisis that affects the number of housing units. It is young people who cannot move out from home and families who cannot find another residence. We are facing a skills shortage, and this also affects growth across the entire country. When construction decreases, it threatens growth in Sweden.

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Markus Kallifatides (S)

Mr. Speaker! I first turn to Mikael Eskilandersson from the Sweden Democrats. I shall try to avoid heckling, but I shall at least respond a little bit.

Mr. Speaker! A recurring claim that Eskilandersson repeats is that most people want to own their home. My grandfather lived for 102 years in this region, in Huddinge, and worked in Stockholm city. He knew from his childhood that all Stockholmers actually want to live in a small red cottage with white gables on Kungliga Djurgården within walking distance to Stureplan. So that is what happens when you ask what people mostly want, regardless of what it will cost and whether one has to pay for it oneself or not. It is on roughly that basis that he presents the claims about what people want.

Back to the interpellation and Andreas Carlson's answer. I note, Mr. Speaker, that I did not quite get the figure I was hoping for. There is still a chance for Andreas Carlson to nevertheless give a ballpark figure of how many more housing units it is reasonable to imagine will arise under the best of circumstances in 2024 through the proposal that Eva Lindh's interpellation concerns, namely 20 million in support for the municipalities' work to facilitate changes in detailed plans to enable the conversion of commercial premises to housing. It is a fairly concrete question. I hope for an answer, and I emphasize that the idea behind the proposal is good. We join the principle of supporting the municipal work in this regard.

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Mikael Eskilandersson (SD)

Mr. Speaker! Yes, what can one say? We can begin with Leif Nysmed's obvious misunderstanding of what I actually said. He claimed that I spoke falsely when I read out what a Sifoundersökning said about the year 2019 when his own party was in government. The survey said that the previous government did nothing to alleviate the housing shortage, and that is actually true.

The housing shortage remains the same as long as one only builds as many homes as the demand increases by. In that case, one still has exactly the same housing shortage, and the housing shortage increases if one builds fewer. One therefore did nothing about the housing shortage. It was essentially constant because one was constantly building a little bit too little. One needs to build a little too much to catch up.

To then claim that the new government blames bad luck - I would not want to claim such a thing given whose housing policy has led us to where we are today. It is not the sitting government's housing policy that has brought us here. On the contrary, the sitting government has done well in trying to rectify errors and problems that have arisen due to the housing policy that was not pursued by the previous government.

I believe that Kallifatides's grandfather would have enjoyed a red cottage, like Sverigehuset, perfectly well, and one does not need to be within walking distance. Commuting distance is sufficient, and it is actually possible to build very many Sverigehus with commuting distance to Stockholm. But I am not sure that everyone wants to live in Stockholm.

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Leif Nysmed (S)

Mr. Speaker! I want to ask Mikael Eskilandersson to listen to what I am saying. I did not comment on any investigation. I commented on the claim that the previous government had done nothing. That is a significant difference. The member should do a little bit of reading.

Mikael Eskilandersson claimed that the housing need did not decrease during the last parliamentary term. Was Mikael Eskilandersson not at the same seminar as I, namely the open hearing where we received material from Boverket showing that the debt was paid off from 2017 to 2022? It is just facts. Go to Boverket's website and look!

The debt was actually built up during the Alliance period. Sure, one can have bad luck and be hit by a recession - but I think one should stop voting for conservative parties, because they had bad luck in 1976-1982, 1991-1994 and 2006-2012 and seem to have bad luck now too. If a government cannot handle bad times and has bad luck all the time, perhaps one should not vote for them. In that case, it is better to vote for those who manage to handle, for example, pandemics and keep housing construction and the like up at that time. One can still try to stick to the facts. Please do!

Rot was also mentioned a couple of times. Rot can be an important part in maintaining competence in an industry, but just raising the ceiling next summer does not help the construction companies today. Small business owners are laying off their staff because no orders are coming in. One cannot wait until the summer for this. Staff will disappear already now. Furthermore, the measure is limited to half a year, if I have understood the budget correctly. No one believes that this crisis is over in December 2024, so the measure is too short-term and also misguided. It should be directed more towards the green transition of small houses, as that would also do more good for the individual.

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Statsrådet Andreas Carlson (KD)

Mr. Speaker! One might wonder if we have ended up in a game of chance here, but this is actually a debate in the Swedish Riksdag. To turn a question of recession into a question of luck or bad luck, I think is quite far from the subject of this debate.

One can choose to see it in a different way. It could be that in difficult times, the voters want a bourgeois government that takes responsibility and takes the measures that should have been in place in good times. These are structural measures that would have been needed in the boom when money was almost free, and which could have been done in good times to prepare us for worse times. They are conspicuous by their absence when it comes to the housing market, and it makes it no less right to focus on those measures now. We would have been better equipped if the previous government had taken the opportunity to implement measures to shorten lead times, simplify and improve building regulations, and make buildable land available.

It is positive that the Social Democrats now say they are positive towards the stimulus for conversion. It is the first time it is presented as a proposal. If Eva Lindh thinks it is insufficient, there is every possibility to present a proposal that is higher. The Social Democrats have not done that.

When it comes to the description, I want to return to the answer where the figure 2,500 dwellings was stated. That is the average for how many dwellings per year have been added through the conversion of premises into dwellings during the last 20 years. Now the hope is that the stimulus that meets part of the problem with conversions, namely the detailed plan application, will cause this to increase.

Markus Kallifatides asked me if I could give a figure between my thumb and forefinger under the best of circumstances, but we are in a time with almost the worst of circumstances with a recession and high inflation. I understand that Markus Kallifatides wants me to give a figure and that it might eventually be wrong. If I give a figure that is too low, he can say it was too defensive. I have no figure to give today, but the consequences and the effect we see is that this can mitigate the effects and also stimulate renovation. It can be a way forward in difficult economic times. There are examples that renovation can be done at a lower cost than new production, and it is also an important part of a sustainable utilization of the property stock.

When it comes to the question of what the government is doing to stimulate demand from households - it is a question that has been raised in this debate - I want to first and foremost state that inflation erodes the purchasing power of households and leads to interest rate hikes. We are reviewing credit restrictions and lowering taxes for low- and middle-income earners. We provided an electricity price subsidy when there were high electricity prices. We are lowering the tax and the level of the reduction obligation to bring down the price of fuels, and we are extending the enhanced housing allowance for the most vulnerable households. These are some examples of what we are doing to alleviate and cushion the effects for households and simultaneously stimulate household demand in a very responsible way so as not to simultaneously fuel inflation.

The government is therefore taking responsibility in a difficult time for Sweden. But one must not pretend that this is about luck and misfortune. To influence it with some kind of magic trick is not to be done. Instead, it is about handling a situation that is very serious, and the government is doing that.

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Eva Lindh (S)

Mr. Speaker! It seems that I am not getting any more answers to the question, so I just want to conclude the debate. We agree that we have a housing shortage. We have built in excess for some years, just as my colleague Leif Nysmed said. But there is a housing shortage. Is it then better to build more or to build less? It should be better to build more. Right now, we are in a construction crisis. Housing construction is falling sharply across the entire country. It is decreasing by 57 percent. That is not good. It is serious.

It is serious for all those who are now seeking housing, for all those who long to move out of their parents' homes, and for those who are now making large industrial establishments but have difficulty finding staff because one cannot find housing and move. It is serious for those who now do not get jobs after having completed the construction program – we are losing competence. It is also serious because it affects the entire Swedish economy. We know that the construction industry plays a very large role for growth. When construction declines, it also affects many other areas. It is serious.

We are in a crisis. Therefore, we believe that the government should take this more seriously and really act. Politics is about wanting, but also about acting and making decisions that can make a difference, so that more housing is built. It is needed for Sweden's sake.

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Statsrådet Andreas Carlson (KD)

Mr. Speaker! No, it was not built in poverty. Not during a single one of the previous government's eight years were as many homes completed as the need amounted to or more. The debt began to be paid off, but the completion did not correspond to the need. It is not possible to claim that the Social Democrats built in poverty. On the contrary – in a period of high economic growth, when money was almost free, they still failed to build according to the needs that existed. One can choose to see it as the Social Democratic members in this chamber this afternoon setting a very large goal and giving a great amount of confidence to the government that is now in power: Despite a period of low economic growth, inflation, and increased financing and production costs, we shall succeed with what they themselves did not succeed with during a period of high economic growth when money was almost free.

I am fully aware of how serious the situation is. The government is working very actively and taking step-by-step responsibility in a difficult time for Sweden. But of course, we would have been better equipped if more of the structural reforms needed to achieve a better functioning housing market had been in place.

I would like to thank you for the debate and the commitment. I think it is positive that there is broad support for the proposal that the interpellation is about, namely 20 million kronor so that the municipalities will receive a stimulus to change detailed plans. There will surely be additional support and measures that the Riksdag will appreciate and like. The small house stimulus is also one of those. I note that the roof deduction is not it, but it is the effect that some jobs are saved in a tough sector that we are after. The Government is taking responsibility in a difficult time for Sweden.

The interpellations debate was hereby concluded.

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