Response to interpellation 2022/23:38 on housing construction
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
The debate concerns housing construction and how the shortage should be managed. KD considers the construction need to be large and that economic factors affect the industry 1 2. KD wants to implement structural reforms to simplify building regulations, increase the availability of buildable land, and stimulate municipalities to increase their planning readiness 1 3. KD argues that expensive subsidies do not solve problems and that the government is abolishing the investment support because it lacks precision 1 3. KD prioritizes small houses 4. KD wants to move from detailed requirements to functional requirements 2 and emphasizes a broader approach with a high pace of reform 2. S argues that the government lacks initiative and that the abolition of the investment support is irresponsible 5. S proposes that the government reintroduce support for new construction 6.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Statsrådet Andreas Carlson (KD)
Madam Speaker! Markus Kallifatides has asked me how the government and I intend both to avoid a collapse in the housing construction, which is completely central to the economy, and to meet the need for more than 60,000 new homes per year until 2030.
We agree that the construction need remains great. Sweden is in a challenging economic situation. High inflation and rising interest rates are putting pressure on households and companies, and the Swedish economy is assessed to be in a recession in 2023. The economic situation also affects the construction industry to the highest degree. In addition to cost increases and inflation, which exacerbate the problems, there are structural factors that must be addressed for us to have a well-functioning housing market. These are problems that subsidies do not solve.
For a long time now, particularly land prices, but also construction prices, have increased significantly faster than the consumer price index, KPI, in general. The cost development within the construction sector and the construction materials industry is characterized by a lack of competition, including low productivity.
To meet the estimated need for new housing, more must be built across the country, but the existing stock also needs to be utilized better. Furthermore, measures are needed so that the entire planning and construction process can become more efficient.
Reforms shall be developed to increase the availability of developable land, and the rules for construction shall be significantly simplified. Municipalities shall be urged and stimulated to increase their planning readiness, especially regarding small houses. Reforms shall be implemented that provide incentives for increased construction, not least to make housing available for groups that today have difficulty entering the housing market. Reforms shall be developed that enable more people to own their housing. Increased home ownership means that more people feel a responsibility for their housing and their living environment.
Markus Kallifatides (S)
Madam Speaker! I thank the Minister for the answer. Unfortunately, I am not so satisfied with the answer and therefore not all too hopeful about the immediate future.
When the construction boom now recedes sharply, a proactive government is actually required to secure everyone's right to a good home, reduce negative effects on the Swedish economy, and prevent large-scale layoffs in the construction sector. Instead, we are met with relatively empty words and vague promises of measures at some point in the future.
In October, Boverket submitted a revised forecast for the construction of housing in the country. The conditions in the housing market have deteriorated rapidly during the year with sharply rising interest rates and energy prices. Households' purchasing power has been significantly weakened. Housing construction is therefore expected to decrease markedly.
This year, start notices are submitted to begin building 60,000 homes, according to Boverket's forecast. That is 14 percent fewer than in 2021. In 2023, according to the same forecast, the construction of approximately 45,000 homes will begin, a decrease of 25 percent.
Instead of taking into account the risks of the entire Western world now moving away from the zero-interest-rate society, the right-conservative government chooses to abruptly abolish the state investment support for the construction of rental apartments with lower rent levels. It will have consequences.
Madam Speaker! The last time the right-wing conservative parties were in government, the number of housing units increased consistently less than the housing needs. The housing shortage increased year by year. That trend reversed during the Social Democrats' time in government, and for the first time in over a decade, the housing shortage began to be eroded.
126 of 290 municipalities in this country state that a housing shortage will persist even in three years. To abolish the investment support prematurely in this situation, without any other measures on the table, is directly irresponsible.
Municipalities, regions and the state must immediately take responsibility for the housing supply and construction. Many S-led municipalities are doing their part, but the state's involvement is needed, among other things through increased pressure on reluctant municipalities. But in the newly appointed right-wing government's budget bill, there are in principle no measures in the area of housing policy. And despite pointed questions from journalists, industry organizations and us in the political opposition, Andreas Carlson even here today repeats phrases about reforms that are to come at some point in the future.
Very few homes will be built through statements about the government's ambitions, Madam Speaker. The problems are zero state support for construction, municipal refusal to plan for construction, great economic uncertainty, and a demand that is not sufficient to meet the cost structure of new production. The solution is public support for new construction.
I therefore repeat the question that more and more people are asking: Will this government let the construction collapse?
Statsrådet Andreas Carlson (KD)
Madam Speaker! I would like to thank Markus Kallifatides for his commitment to the issue. It is welcome. But it would have been necessary also during the previous government's years in power.
I have been housing minister for eight weeks on Tuesday. The previous government had eight years. We would have been in a significantly better position if structurally correct reforms had been implemented to ensure that we were prepared for the very tough situation we are now entering, and if the previous government had taken its responsibility, and if Markus Kallifatides had shown the same commitment during the previous eight years as he seems to have felt during the last eight weeks.
I will in no way disparage the commitment. But one cannot escape the fact that it is not possible to turn around a very tough situation on the housing market, regardless of which proposals are presented, within eight weeks. On the other hand, we have already pointed out which areas reforms should be developed in. There, a great deal has been lacking over the last eight years.
Markus Kallifatides points out that we are abolishing the investment support. It is in no way news that the government would abolish the investment support. The Riksdag decided that already in 2021. Now we are implementing it, which all voters could foresee. We do not believe that expensive subsidies with low precision are the way forward to address the problems on the Swedish housing market. The Social Democrats do not seem to believe that either, I would like to note. The Social Democrats propose not a single extra öre in appropriations for investment support in their shadow budget for the coming years.
I believe, therefore, that there is a good basis here for a possible common housing policy moving forward. Perhaps we can put the investment support, that is, the expensive construction subsidies, into the past and look forward at which real structural reforms could seriously address the structural problems in the housing market.
I would also like to have it recorded in the minutes that I have conducted quite a few interviews and answered many different questions during my first eight weeks as Housing Minister, Madam Speaker. I will continue to do so, but we will also develop reforms that simplify the building regulations and ensure that more buildable land is produced, so that more people can take the step toward their first home. The government has already signaled this, and we will return with many reforms during the coming years. I will lead that work, and I am happy to continue to have a good dialogue about it with all parties in the Swedish Riksdag.
Markus Kallifatides (S)
Madam Speaker! I thank the Minister for the answer. He does not need to doubt my continued great commitment to these issues.
I still want to dwell a bit more on the current situation. Skanska Sverige's CEO was interviewed by Svenska Dagbladet last week. "It is set up for drama in the construction industry," it is claimed in the article. It is called a slaughter - housing construction is now heading towards "a bloodbath," says Gunnar Hagman, CEO of Skanska Sverige. We read further in the article: "The construction companies expect a standstill for new housing projects next year."
Minister Andreas Carlson was interviewed in Dagens Nyheter on November 29. To the question of what the government can do for municipalities that do not want to build, he answers: "We can urge and stimulate the municipalities to increase their planning readiness. That is what we have established in the budget." So says Andreas Carlson. How does the government intend to do that, Madam Speaker?
"It is both about increasing safety in vulnerable areas but also about more people being able to realize their housing dreams and take the step into the owned market," we read further in Dagens Nyheter. "And the situation," says the minister, is that "many who want to take that step and who have grown up and live in vulnerable areas, are more or less forced to move out of the area. Here we will need to work very actively."
Madam Speaker! I look forward to massive support for low-income earners so that they can take the step to owned housing in the upcoming spring budget. In the autumn budget, however, not a single krona is allocated for this. But I believe it may be as the Minister Andreas Carlson himself says on Bostadspolitik.se on December 5: "We have a tough economic situation where the construction rate looks to be dampened. Most important for us is to dampen the effects on households and prepare so that we can get construction moving when the economy finally turns," he tells Byggindustrin.
Madam Speaker! I asked two questions to the Minister in my interpellation. The first was: How does the government intend to avoid a collapse in the housing construction which is completely central to the economy? I perceive that the answer to that question is that the government does not intend to avoid such a collapse.
My second question, Madam Speaker, was: How does the government intend to meet the need for over 60,000 new homes per year until 2030? I perceive that the answer to that question is that the market and possibly broad subsidies for expensive and owned small-house housing is the model that the government envisions, Madam Speaker.
Statsrådet Andreas Carlson (KD)
Madam Speaker! I believe that my answers to Markus Kallifatides' questions should be understood based on how I have answered.
When it comes to what measures will be taken to meet the need for more housing, measures will be needed so that all different types of tenure are available. There are great challenges on a broad front today, but as the question suggests, we will prioritize small houses.
We will do that because we see that the construction rate and the new production rate regarding detached houses is significantly lower in Sweden compared to other countries in the EU. Only 20 percent of the new production in Sweden consists of detached houses, compared to the average in the EU, which is 40 percent. There are also measurements indicating that seven out of ten would like to live in a detached house, so there is an expectation that we will respond to that desire.
It does not mean that we are against other forms of tenure; on the contrary, a breadth and an approach to this was needed that does not pit different forms of tenure against each other. It is not my ambition, and it is not something anyone has claimed either.
Regarding how we should dampen the effect and avoid a collapse, we have, as we have touched upon, general support for households to dampen the effects and secure the safety and economy for households. We also make significant efforts regarding the social aspect of housing policy, where we build upon what was initially an announcement from the Riksdag to work with a homelessness strategy on the theme housing first, in order to avoid more people becoming homeless. We also extend the temporary housing allowance so that those in the toughest economic situation will be relieved in this very tough situation. This applies to those families but also to our entire country in the economic situation we are in now.
This leads me to one of the other questions that Kallifatides asked, namely the one about the economic cycle. Housing construction has always been affected by the economic cycle. That is nothing new, and it is nothing new this time either. It has been so in the past and will probably be so in the future as well.
Therefore, it is very important that the structural changes required to get construction started are in place – and that they are also in place when the economy is doing well. Unfortunately, they have not done that; it has been eight years under the previous government where they have not addressed the problems that exist in an attempt to increase the construction rate. Reference has been made – and it is being done again in the debate – to the investment support, which, when tested in tough times, is not matched by a single penny in the Social Democrats' own shadow budget.
The fine speech about the investment support is thus being tested in economically tough times. The applications that have come in correspond to 16 billion kronor, and not a single krona could the Social Democrats put into their own shadow budget when this was tested. That is understandable, because 16 billion kronor constitutes almost half of the reform space if one compares it with BP 2023. Not even the Social Democrats could have prioritized this in a government position, I believe. At least that is what is indicated in the shadow budget that now lies on the Riksdag's table from the Social Democrats.
The question therefore goes back to Kallifatides and his own party: What did you do during eight years? Which real structural reforms, which have ensured an increased construction rate so that a collapse can be avoided when the economy eventually turns, are you proud of?
We will return. We have a high pace, and we have pointed out a multitude of reforms. But to believe that we would get them through in eight weeks when the politics have been so neglected for eight years - well, I suppose I have to turn it around and thank you for the trust in the government.
I look forward to a continued good dialogue on these important issues.
Markus Kallifatides (S)
Madam Speaker! I also look forward to a continued dialogue on these very important issues.
Housing construction in Sweden reached a peak in 2021, that is, in the final phase of the Social Democratic government's tenure. The then Minister Johan Danielsson belongs, according to my personal memory, to those ministers in previous governments who have given directives for the most inquiries. Many of these Andreas Carlson will probably be the recipient of during the mandate period, so we will have reason to discuss Johan Danielsson's initiatives.
Madam Speaker! The Social Democratic budget motion contains a proposal for an authorization covering 8 billion SEK in investment support. It is not zero. 8 billion is more than zero, Andreas Carlson. I think it is important that we stick to the facts.
My proposal here and now, to avoid the slaughter that the CEO of Skanska Sverige speaks of and the decline that the Minister himself sees and describes in his answers to me, to journalists, to the industry and so on, is that the government should consider doing something that it is quite skilled at, namely to perhaps break a campaign promise or two and actually reintroduce a support for new construction - in order to avoid a collapse in the housing construction which is so important for the economy of the society.
Statsrådet Andreas Carlson (KD)
Madam Speaker! Thank you, Markus Kallifatides, for the conversation! Yes, the construction need remains great. That we agree on. Then we may have different views on which measures are needed. But we will return with a number of reforms. There are a number of investigations that will come to the government, and we will consider those proposals as well.
When it comes to the investment support specifically, it is true that the authorization limit is being raised, but no new funds are being allocated. It is easy to raise the authorization limit, but it is quite difficult to pay out funds if the account is empty. It is building a castle in the air, I would like to say for the record and to everyone else following the debate with great interest.
I look forward to returning with reforms that will simplify building regulations significantly. This applies to both small houses and multi-family buildings. It is about moving from very detailed specific requirements to more functional requirements.
It is also important to secure more developable land. This has been part of the debate, and it might sound like this is the solution. But I want to emphasize that there is no single solution. This is clearly shown by the investment support. One cannot bet everything on a single slice of the pie. It will not solve the structural problems that exist. A broader approach is required, and there must be a high pace of reform in all areas. The government will have that. We will return to this.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.