Response to interpellation 2023/24:127 on the housing supply in Sweden
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
KD considers that housing construction has decreased due to inflation and interest rates 1. KD wants to increase the availability of buildable land, simplify regulations and improve opportunities for home ownership 1. KD argues that the government's measures are both structural and cyclical 2 and wants to see relaxations in the construction requirements for student housing 3. S considers that the government's measures come too late, are incorrectly designed 4 and that the government lacks an economic program 5. S advocates for construction stimulus, state construction loans and exempting public housing from LOU 6. SD considers that the government takes the issue seriously and argues that subsidies are harmful 7.
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)
Mr. Speaker! Leif Nysmed has asked me what measures I intend to take to reach the housing need calculated by Boverket of 67,300 dwellings per year. Leif Nysmed has also asked me what measures I intend to take quickly to reverse the sharply decreased housing construction.
I want to start by saying that more housing needs to be built across the entire country, and it is important that there is a supply of different types of tenure forms and housing that suit different stages of life. The objective for the housing policy is to increase the availability of buildable land, simplify the building regulations, shorten lead times in the planning and building process, and improve the opportunities for home ownership. Reforms are needed to address the structural problems in the housing market.
Sweden is in a difficult economic situation where housing construction is slowing down as a result of global factors such as high inflation and rapidly rising interest rates. The high inflation and rising interest rates have affected households' demand for housing and contribute to high production and financing costs. Housing construction has been significantly affected by the economic cycle, and the outcome for started housing shows that housing construction has decreased significantly over the past year.
The construction industry is hit hard when fewer people can invest in a new home or in renovations. There is therefore a need for short-term measures to mitigate the effects and save jobs in the construction sector. In the autumn budget bill, the government has therefore, among other things, signaled that the ceiling for the rotavdrag (deduction for home repairs) should be temporarily raised, which is assessed to increase demand for repair work and promote employment in the construction and civil engineering sector. It is a measure that makes a difference when demand wanes in the construction and civil engineering sector.
Furthermore, the government proposes stimulus measures to municipalities for the development of detailed plans that enable new construction of detached houses and the conversion of premises into housing in order to better utilize the potential that exists in the existing property stock.
To facilitate the financing of construction, there has previously been a state credit guarantee for loans for residential construction. When it comes to measures of importance for households' opportunities to finance a home, the government has, for example, tasked Finansinspektionen with following up on the possibility of exemptions from the amortization requirement for new production.
The Swedish Financial Supervisory Authority (Finansinspektionen) has also been tasked with mapping out how mortgage lenders have applied the possibility of granting exemptions from the amortization requirements for a limited period due to special reasons. The assignment was reported this summer. The authority judged that the mortgage lenders have, in the main, handled the exemptions from the amortization requirements in a good manner. The Government has also tasked a committee with analyzing how borrower-based macroprudential measures, such as mortgage caps and amortization requirements, have functioned so far and how they can be designed in the future to manage macroeconomic risks and consumer protection in a purposeful way.
To create good conditions for building new rental apartments, it is important that there is a well-functioning system for rent setting. Furthermore, there must be reasonable opportunities to increase the rent to cover cost increases in order to get the construction of rental apartments started. Today, these are limited. The Government has therefore commissioned an inquiry to assess how the rents for newly produced rental apartments should be able to be changed during the presumption period.
To improve the basis for knowledge and decision-making, the government has tasked Boverket with improving forecasts and scenarios for housing construction. The need for developed work with forecasts and scenarios regarding housing construction is particularly clear in the difficult economic situation that currently prevails.
The Government has also given Boverket a mandate regarding relaxations in building requirements for student housing. The purpose of the mandate is to investigate the possibilities of significantly reducing costs in the construction of student housing and enabling an increased and more differentiated supply of these in the short and long term.
Leif Nysmed (S)
Mr. Speaker! Thank you for the answer, Minister!
I note that I do not think the Minister is quite answering my questions. This is remarkable in a situation where all industries within the housing sector describe how housing construction is grinding to a halt.
I have asked two questions that are highly relevant in light of the collapse within the housing sector. What measures does the Minister intend to take to reach the housing need calculated by Boverket of 67,300 homes per year? The Minister gives no answer on how demand is to be increased to produce these newly built homes. If there is no one who can afford new homes, then no new homes will be built either. I do not know how many times I have said this in the chamber in various debates in other contexts. It is worth pointing out, because I receive no answers to this fundamental question.
Regarding my second question, on what measures the government intends to take quickly to reverse the sharply decreased housing construction, the answer is primarily a raised ceiling for renovation work next summer. A renovation deduction, correctly designed, could at least help to maintain professional competence in a recession. But according to information from the trade union Byggnads, several small business owners who perform renovation work say that they are not getting more and therefore need to lay off staff now. If they are to wait until this summer and try to retain staff, they will run out of time before going bankrupt.
Furthermore, the increase shall be temporary during the second half of 2024. However, there are no other market assessors than the government who believe that housing construction will have picked up pace again and that there will then be no further need for labor market measures.
We can observe that the government's only rapid measure actually comes too late, is incorrectly designed, and ends too early.
Mr. Speaker! Instead of answering my questions, the Minister blathers on about some objectives for the housing policy. Not unimportant ones, I want to emphasize, but they are not reforms that can create demand here and now to meet the housing need, and they are absolutely no measures to stop the housing collapse.
In his response, the Minister also writes that global factors have caused high inflation in Sweden and rapidly rising interest rates. That is correct. But according to the response, it is apparently a record-high number of bankruptcies within the construction sector and the small house industry, together with a sharply increasing unemployment among the country's workers, that are to dampen the inflation-driving effects from the outside world.
I wonder how rising prices on energy, food, and services are to be halted by us stopping the construction of housing. The reality now is a record number of bankruptcies, especially within the construction industry. At the same time, unemployment is rising not only for construction workers but for most occupations affected by the collapse within the housing market.
The decline in housing construction is brutally steep, from 71,000 new housing projects started in 2021 to approximately 27,000 this year, and for 2024 the number of new housing projects started is estimated to be down to a record low of 19,000. These are figures far from 67,000 annually. Furthermore, it is a low figure, according to the Director General of Boverket, who argues that the figure must be increased.
I am posing my questions again. Where is the Minister's crisis awareness? Is there any crisis plan? Does the Minister not see the collapse that an entire housing industry is now experiencing?
Mikael Eskilandersson (SD)
Mr. Speaker! I spontaneously wonder if Leif Nysmed was in the same room as I was when we listened to the minister. I do not recognize at all what Leif Nysmed says.
The reason for whether housing is built or not is actually simple. Three things are required, namely land to build on, money to build with, and then the time for the building permit and to complete the construction. If there is land, and if money is available and the time for completion is reasonable, then it is built. It sounds simple, but it is not entirely simple.
But I believe that the government takes the issue seriously and addresses all three parts in an exemplary manner. A comparison with the previous government, which only had a focus on providing capital to the market and trying to bribe the market to build as many rental apartments as possible, shows that that policy was harmful to the entire market.
Money to build with is what is missing today. That is where Leif Nysmed and I agree. But interest rates and inflation have caused both people and companies to hesitate with large expenditures. Inflation makes it uncertain what one can afford or if the calculations for a company hold up. One waits for the situation to become more stable, and that is completely natural. There is a big difference between how Leif Nysmed views the politics and how I do, where he argues that the same number of homes should be built every year while I do not think we should have a planned economy in Sweden. That is an enormous difference. We are not going to build the same number of homes every year; instead, construction will fluctuate. More will be built in certain years and fewer in others. That is how it looks.
Let us move on to the question of time. It must not take too long to build. What is actually the problem is things that the previous government could have corrected if they had wanted to. They have sat for eight years and actually just let time be postponed. Now I know that Leif Nysmed has a different view on what the previous government did, but if we are to be honest, the best thing that happened to the previous government was when they were overridden by a majority consisting of the Alliance parties and SD. That is when we usually get some sensible policy through.
The climate declarations do not provide any new housing, nor do they provide a proposal on coastal protection - the proposal fell in the chamber. They didn't even care about having a majority behind the proposal, they just threw the proposal into the chamber and hoped it would pass. Whether it was good or bad, they hardly analyzed.
When it comes to the proposal on building subsidies, I want to assert that there was a complete lack of analysis regarding how building subsidies affect a market when one throws money into the market and believes they are doing something good, while simultaneously causing problems for those acting in the same market. Already existing properties fell in value because new properties were built at an unreasonably low price.
Markus Kallifatides (S)
Mr. Speaker! I thank the Minister for the answer to Leif Nysmed's interpellation. I have taken note of the answer with interest, and I would like to contribute some reflections.
In the State Secretary's response to Leif Nysmed's questions, he addressed the system of credit guarantees that indeed exists in Sweden. I note that we are already very close to the authorization limit for these credit guarantees at the end of this year. It is very unclear whether they will contribute to any significant extent to the construction of more housing than the 19,000 that are now projected for 2024 - if I remember correctly; we have to double-check the figure.
I also note that the government does not propose any expanded authorization framework for these credit guarantees, which the Minister nevertheless takes up as a mechanism to support the creation of new housing in Sweden. It is the same 8 billion in authorization framework. I would like to hear a reflection from the Minister.
I also note that my recollection is that the removal of the second amortization requirement was an election promise. Now the proposal is being investigated and is being sidelined. I would very much like to hear a comment on this.
Mr. Speaker! Mikael Eskilandersson is also participating in this debate, and I will take the opportunity to urge the Sverigedemokraterna representative Mikael Eskilandersson to take part in the ten-page interpellation that I submitted before the summer and debated with Housing Minister Andreas Carlson. There, I detailed the collective reform work – completed reforms, prepared reforms, initiated investigations – during the Social Democratic government period. The interpellation debate is available, just like all other debates, recorded on the Riksdag's web-TV. I assure you that the Minister had no objections to my description of the history. A great deal was done, and Andreas Carlson is now responsible for taking some of it further. These are investigations that Social Democratic governments have initiated. We hope that they will be carried out in a good way.
Mikael Eskilandersson mentioned planned economy, that we should have a goal for housing construction in the country. There are housing policy goals in the Swedish Riksdag. Shall we remove them? Shall we divest ourselves of all responsibility for the housing supply in the country? Is that the line? I do not believe that is the government's line, but it would be interesting to hear from Andreas Carlson if there should be housing policy goals in terms of building enough housing over time.
Statsrådet Andreas Carlson (KD)
Mr. Speaker! Yes, we see a dramatic slowdown, and we take that development most seriously. We are working broadly on the issue in the government.
Just before the summer, I gathered a large part of the industry's actors for a meeting. What was raised at the meeting included, among other things, the ceiling for the tax deduction for renovations, which is now in the budget. Furthermore, it was the question of what can be done to stimulate the conversion of properties from commercial to residential, which is now in the budget. Finally, it was how one can stimulate the planning for small houses to increase small house construction, which is now also in the budget.
The government is well aware of the very tough and serious situation prevailing on the housing market and is taking the required measures step by step.
No one has claimed, to move forward and answer one of Markus Kallifatides' questions, that everything the Social Democrats did during eight years was wrong. There were several good ideas and proposals that were implemented, but the question is whether it was enough. In a booming economy, when money was almost free, they failed for a single year to complete as many homes as were needed in that individual year.
Additional measures would also have needed to be taken to address the structural problems in the housing market, which Mikael Eskilandersson touched upon, regarding land, financing, and time. Shortening lead times and simplifying and improving regulations is something that makes the process shorter, and now that money is no longer free, long lead times are something that actually affects the economic calculation very powerfully. Therefore, it is important to address the structural problems that exist in the housing market.
What measures has the government taken to stimulate demand? Yes, I touched upon that in an earlier interpellation debate here this afternoon.
First and foremost, inflation erodes the purchasing power of households, which leads to interest rate hikes. We are now seeing the credit restrictions. We are lowering the tax for low- and middle-income earners. The electricity price support was provided during the period of high electricity prices. We are lowering the tax and also 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 families with children.
When it comes to the goals for the housing policy, they originally come from the Alliance government and from my representatives, the Christian Democratic ministers Mats Odell and Stefan Attefall, who were involved in developing them. It is good that they have held over time. It is pleasing and something that I am positive about.
I will also answer one of the questions that Leif Nysmed had up regarding the deduction for renovation. I apologize for jumping a bit between questions, Mr. Speaker, but there are three different debaters. In the last 40 seconds of this contribution, I will try to provide an answer to one of those questions.
I think, first and foremost, it is pleasing that Leif Nysmed describes the increase in the roof deduction as a labor market measure and not as something that enables luxury renovations, as we heard from his party colleague earlier. This is about being able to save some jobs in a sector that is currently very heavily exposed.
Why is it only until the turn of the year next year? Well, it is because it is to stimulate this type of measure for those who have the opportunity to, for example, renovate their house in order to be able to rent out a part of it and perhaps carry out the energy efficiency measures that they have intended to do. They can take the opportunity to do them with this stimulus now when the situation is toughest so that we can get the effect that some jobs are saved by this increase. That is why it is of a temporary nature.
Leif Nysmed (S)
Mr. Speaker! I thank you again for the answer.
I would like to say that the tax deduction for green renovations could be a much better labor market policy measure if, for example, it were increased to 50 percent and targeted at climate and energy efficiencies. Then we would get more social benefit, and it would be broader – more people could utilize it than the wealthiest, who can utilize the excess part of 25,000 that is being discussed now. And it would have been welcome already in January, not in July. That is what is actually the main criticism.
Mr. Speaker! The Minister still does not seem to take this situation with the great seriousness that is needed, I think. We are talking about structural reforms, and they help little right now. We can discuss which structural reforms are needed, but it sounds to the Minister as if the problem will disappear soon - 2025 was mentioned as the year when the recession would be over and everything would be finished.
Unfortunately, figures from one of the major banks show something else. Mikael Eskilandersson and I were at the same seminar, and there we saw that purchasing power will not be back until 2030. Before then, not much is likely to happen on the housing market given that it is purchasing power that drives demand. If nothing happens, nothing will occur until 2030.
The Minister said that he has met with the industry. We have also done so – we have met with the same industry as the Minister after the summer. Seven lost years, said a representative for a large construction company that we Social Democrats met regarding the SD government's housing policy. Seven lost years. Several industry representatives nodded in agreement. It is about the fact that no turnaround is seen until 2030. It is quite frightening, because it is about purchasing power.
That there is demand is what is most important before one starts and builds. No one builds housing on buildable land if there is no one who can afford to demand them, Mikael Eskilandersson. You could have the entire Gärdet at your disposal to build on if you wanted to, but if there is no one who can afford to buy, it will not happen.
In this serious situation, the Housing Committee has had only one housing policy proposition from the government to deal with during the spring, and on the government's list of propositions for the autumn, housing policy is conspicuous by its absence. We are canceling every other meeting. Furthermore, the fact that the responsible minister does not understand the seriousness of the situation will lead to a longer starting distance.
During the 90s, I personally experienced the deep crisis that was then as a construction worker. I experienced the stress that came with unemployment and short, temporary, insecure jobs. It took about five years before I managed to get a permanent job again, a permanent employment in the construction industry. Many of my peers of the same age left the industry because they lost faith that they would be able to get a good job again.
I have seen how long it takes to turn this around, and I see how history repeats itself. Back then, it was said that only when the interest rates on housing loans fall below 10 percent will the construction industry start up again. It was not that simple. We see the same irrational discussion again today: Only when inflation goes down will the interest rates fall.
But if we read SVT's news app today, we see that several experts within the banking sector say that Swedes cannot count on lower interest rates for a while. This can also be read: "It is important not to be lulled into the hope that interest rates will go back down to very low levels."
An active housing policy is required. Before the summer, we proposed a housing commission. That proposal was rejected, but I want to ask the Minister again: Is it not time now for a housing commission?
Mikael Eskilandersson (SD)
Mr. Speaker! I have a few brief comments on what has been said here.
Markus Kallifatides is speaking about a ten-page interpellation. I look forward to skimming through it a bit quickly; unfortunately, I did not follow the debate when it took place. But half of those pages are investigations, and what was it we said about investigations? It is burying things, isn't it? The other half is something that SD and the Alliance were on board with, basically. There was nothing in it that SD and the Alliance were against, but then it wouldn't have passed either. And one can put together ten pages quite easily by writing half a page about each investigation, roughly, which is what it looked like to me that it was.
To briefly mention this matter regarding purchasing power, which Leif Nysmed raised: I will at some point, when I have a bit more than a minute of speaking time left, try to explain to Leif Nysmed what the difference is between micro- and macroeconomics and between purchasing power at the national level and purchasing power of individual individuals, because there is a certain difference.
I have also not said that the interest rate should go down again. We must remember that the interest rate where it stands now is a fairly normal interest rate. Somewhere between 4 and 5 percent was the average during the 1900s, and perhaps that is where the normal interest rate should be. To hope for negative interest rates is to be unrealistic.
Then I actually think we should be able to agree that these subsidies are harmful. Unfortunately, I don't have time to go into it much more than that. But we were in Karlstad with the Civil Affairs Committee and looked at newly built blocks on the absolute finest land. There, they have ploughed in 550 million kronor. Is that really well-used money? I don't think so.
Markus Kallifatides (S)
Mr. Speaker! Let me remind the Minister that during the debate he always has the opportunity to answer my two questions regarding the system of credit guarantees, which were mentioned in the response to Leif Nysmeds interpellation, and how the Minister views the potential in that system and the proposals for an unchanged authorization framework that the government is presenting.
We Social Democrats have other proposals than to increase credit guarantees. We speak, among other things, about construction stimulus, state construction loans and a green rotavdrag, and about the very important matter of exempting public services from LOU. The Minister does not need to have time to comment on this today; we will return to it.
The amortization requirement was a sharp election promise from some parties in the government base, and now this sharp election promise is being investigated. That, Mikael Eskilandersson, is using an investigation as a burial ground for something. When one seriously wants to implement something that one has not yet promised the citizens, one should appoint an investigation. Then, one should promise to implement it when one knows what it is one is promising, I think.
Investment support is about supporting people's opportunity to get a rental apartment that they can afford to live in. This seems to be something incredibly problematic for Mikael Eskilandersson and the entire government side in Swedish politics. People are able to afford to live in a good apartment.
Statsrådet Andreas Carlson (KD)
Mr. Speaker! There are several questions that recur from a previous interpellation debate, and I want to emphasize again that the government, of course, sees the seriousness of the situation. The members do not always seem to note this, even though I often say it and the government demonstrates it in the steps and measures we take. For example, the measure with the house renovation deduction will be able to save a number of jobs.
At the same time, it is a very tough economic situation with a recession and high inflation, and it is global factors such that if one does not design measures that are implemented in the right way, they can counteract other measures that are implemented. It can be the case that a too expansive fiscal policy in a situation with a monetary policy working to bring down inflation can counteract and rather fuel the situation and make it even worse for already pressured households. The measures we are working with are both structural reforms and cyclical reforms, where the increase of the rotavdrag is one such.
When it comes to the issue of credit guarantees, it is quite correct that I account for the system that exists, and it is not excluded to see what can be done to utilize it even more. The Government also has a coordinator who works with issues regarding housing supply in the north and who looks at various measures that can be taken quickly so that we can ensure that more housing can be built, which is an important part of enabling the new industrialization we see not only in the north but in large parts of the country. At the same time as the needs for more housing are very great, we see a dramatic slowdown in the housing market.
Regarding the issue of LOU and public utility, which was raised by Markus Kallifatides, there is a proposal in Karolina Skog's investigation that is now being prepared in the Government Offices, so the government has not dismissed the proposal. We are looking at many different measures and proposals that can be taken, and we have, among other things, given Boverket several important assignments. We are doing this at a high pace, not only because it is a serious situation right now but because structural reforms need to be put in place, important in both low and high cycles. Even during the high cycle, when money was almost free, it could be built in Sweden at the rate that was needed. Not during a single one of the eight years were as many homes completed as Sweden needed.
This demonstrates the need to shorten lead times, make buildable land available, and simplify and improve regulations, as well as to, in this very challenging economic situation, have cyclical reforms and mitigate the effects both for a severely strained sector and in a tough economic situation for households. I raised some examples of what we have done, and we will, of course, continue to take the measures that are required and take responsibility in a difficult time for Sweden.
Leif Nysmed (S)
Mr. Speaker! I thank Minister Andreas Carlson again for the answer.
That the Minister says he recognizes the seriousness of the obligations. I expect that there will be more for us in the Committee on Civil Affairs to do moving forward and more finished propositions to take hold of. There is a finished proposal on restart loans to be put on the table, which was an election promise from several of the government parties. I also believe that the Sverigedemokraterna stood behind it. I recall that we talked about just that at Riksbyggen a year ago. I have, however, seen zero of it despite it being a finished proposal.
From today's debate, I can state that every year we do not meet the need for 67,000 new homes, the debt accumulates. Very soon, the annual need will be more than 100,000 homes, and it will increase. I have not yet seen any forecast where it will turn around. This debt will then, similar to other debts after terms of right-wing governments, be very difficult to pay off.
I also note that everyone who needs a new home of any kind – young as well as old, the unemployed who are expected to move where the jobs are, students moving to receive education, the divorced and the newly arrived – will find it significantly tougher than today. Companies will continue to have a very difficult time, and with great probability, there will be more bankruptcies within the construction industry. Everyone from construction workers and small house industry workers to architects, that is to say everyone who works within the housing sector, will experience increased unemployment, with all the anxiety that entails for the individual. It also carries consequences for the country.
I previously referred to Caroline Szyber, former housing policy spokesperson for KD. She presented a proposal for an investment grant for student housing. Please feel free to listen to her!
At the same time as we need to build 67,000 homes per year, we have an SD government that lacks an economic program to solve the housing crisis.
Statsrådet Andreas Carlson (KD)
Mr. Speaker! Regarding student housing, the government has tasked Boverket with developing proposals for significant relaxations in the building requirements for student housing. The purpose of the assignment is to develop proposals that can significantly reduce costs when constructing student housing and enable an increased and more differentiated supply in both the short and long term. This very important assignment is to be reported in the spring.
I have pointed out in the debate some different structural reforms that could have made us better equipped in this tough economic situation if they had been undertaken earlier. This is one such example. But that does not make it any less right to address it now, and it is requested and appreciated by many student housing foundations and developers, who see that it will become possible to make the calculations work and therefore can build more student housing in Sweden. If Sweden is to continue to be a knowledge nation, it is important that there are homes to move into in university towns. It is also important to be able to move to where the jobs are.
In this economically tough situation, we want to review how more people can be able to rent out their homes. It is about being able to utilize the existing stock better. It is not the entire solution, but in a situation with a sharp slowdown, it can be a step toward more people being able to move to university towns and where there are places.
We know that the housing stock can be utilized more efficiently. That is why we see what we can do to convert premises into housing and so that one can rent out part of one's home. Will there be more housing from this? No, but we also have other measures for this. We are taking them at a rapid pace, and the government is working very focusedly on this. It is important to see that it is a tough situation, and the government is taking responsibility in a difficult time.
Thank you for this debate! I look forward to continued dialogue with the members of the Riksdag moving forward.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.