Response to interpellation 2023/24:372 on the timber house industry and housing construction

Statsrådet Andreas Carlson (KD)

Mr. Speaker! Carina Ödebrink has asked me what initiatives I intend to take to support the timber house industry and Jönköping County through the acute crisis, what measures I intend to take to quickly get the construction of small houses and apartments started, and whether I intend to act within my area of responsibility so that the government will make interventions for the unemployed as well as to secure the supply of skills in the industry moving forward.

I want to start by saying that I share Carina Ödebrink's view of how important the timber house industry is, not least for Jönköping County. Just last week, I visited both Jönköping and Mullsjö, which is also the place where my political involvement started. I have visited the county several times in my capacity as Housing Minister and have received several of the small house manufacturers' descriptions of the situation. I am well aware of the seriousness of the situation for both housing construction as a whole as well as for the timber house industry and for Jönköping County in particular.

Sweden is in a difficult economic situation where housing construction has decreased significantly as a result of global factors that have contributed to high inflation and higher interest rates in Sweden and globally. The high inflation and the higher interest rates have affected households' demand for housing while simultaneously contributing to high production and financing costs for construction companies. Housing construction has been heavily affected by the weaker demand in the economy, and the number of started homes has decreased significantly during 2023. Inflation has fallen back during the recent period, and the central banks are judged to begin their interest rate cuts during 2024. In the long run, this will contribute to a recovery in the construction industry, even though it will take time. The government is implementing various measures to mitigate the effects and save jobs in the construction sector.

A prerequisite for increased detached house construction - and thus the construction of detached houses in wood - is that there is access to planned land. Following the government's proposal in the budget bill for 2024, an incentive has been introduced for municipalities to increase the supply of planned land for detached houses. The support can be applied for by municipalities starting from April this year.

The Government has also tasked Boverket with producing a basis for increased small house construction. Boverket's assignment includes reporting where there is buildable land for small houses and assessing how profitable small house construction is. It also includes describing where small houses of different types are built, which companies are responsible for the construction, and to what extent municipalities provide plots for small house construction.

The Government wants to promote employment within the construction and civil engineering industry so that competent labor remains within the construction sector when the economic cycle turns. In accordance with the Government's proposal in the budget bill for 2024, the ceiling for the rot deduction shall be temporarily raised, which is assessed to increase the demand for rot 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. The more detailed conditions are set out in a memorandum that was recently referred and is now being prepared by the Government Offices.

In accordance with the government's proposal in the budget bill for 2024, funds have been allocated for more places within both the university colleges and the vocational adult education. The purpose of both initiatives is to meet the continued large competence needs throughout Sweden, enable the transition, and promote matching in the labor market. In total, the government has allocated 1,747 million kronor, including student grants.

The Government has given a mandate to the Financial Supervisory Authority to take a position on an increase of the mortgage ceiling from 85 to 90 percent. An increase can create greater opportunity for more people to own their home.

The Government has also tasked the Financial Supervisory Authority to investigate how the exemption from the amortization requirements that can be granted for newly produced housing is used in practice.

The Government is closely following the developments in the construction and housing sector and does not rule out that further measures may be taken.

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Carina Ödebrink (S)

Mr. Speaker! I thank the Minister for the answer.

A large proportion of Sweden's timber industry is located in Jönköping County and its surroundings. According to the Träcentrum foundation in Nässjö, 75 percent of the country's timber companies, joineries, timber house manufacturers, furniture and interior companies, and sawmills are located within a 15-mile radius of Nässjö. When it comes to furnishing with Swedish-made furniture in Sweden and the rest of the world, it is most often with furniture from Vaggeryd, Jönköping, and Värnamo. Building homes in wood is good for the climate and an important contribution to the green transition.

But now there is a crisis in the Swedish timber house industry and a crisis in housing construction. There is no other word to describe the current situation. Until recently, Sweden had the most extensive housing construction in 30 years. Between 2015 and 2021, an average of 60,000 new homes were started each year, which was in line with the forecast and the need that Boverket saw at the time. Today, closer to 70,000 new homes per year are needed. But housing construction has now ground to a halt. The global situation is uncertain, and interest rates are rising. This creates great concern for the construction and real estate industries, but also for households.

Mr. Speaker! In times of crisis, it is important that politics steps forward, takes responsibility and puts forward proposals. It is not reasonable that the construction industry and the countryside should bear the consequences of an uncertain world, increased costs and global inflation.

In the union branches within GS, which together cover Småland, almost every fourth member is laid off. The consequence of this is that many jobs in our regions, well-paid and with fair conditions within the timber house industry, disappear. This primarily affects the countryside, the backbone of the Swedish timber house industry. Fewer jobs in smaller labor markets widens the gap between city and country and also halts the transition to climate-friendly construction. Industrial timber house construction, in fact, causes significantly lower emissions.

Politics therefore needs to support the timber house industry and housing construction to counteract the construction crisis spreading to the entire economy. What we have seen so far of the government's actions and what we have now heard in the Council of State's response leaves some room for improvement, and I will return to this in my second post.

I know that the Minister is well acquainted with the situation in Jönköping County and in Småland, and in connection with a visit in November, the Minister stated that the small house manufacturers have expressed a need for both short-term and long-term measures. In the Minister's response, it states that the government is implementing various measures to mitigate the effects and save jobs in the construction sector. My question then becomes: What are these measures?

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Lars Beckman (M)

Mr. Speaker! This is an important interpellation. The construction industry is important for Sweden. Housing construction is important. Therefore, it is so concerning that the Social Democrats sloppily missed out on a period of high economic activity.

I believe that few who see this debate remember who was the housing minister during the previous Social Democratic government. Does anyone remember who it was? No, that was exactly what I thought. The fact was that Sweden had a number of different housing ministers, and I do not believe that a single person watching this debate can link a single housing policy reform with the previous Social Democratic government.

Let me ask the Social Democratic members: What did Mehmet Kaplan do for housing policy reform? What did Per Bolund do for housing policy reform? What did Peter Eriksson do for housing policy reform? When Per Bolund regained the role as housing minister, what did he then do for housing policy reform that allows us to better handle the recession now? What did the political star Märta Stenevi do for housing policy reform? Does anyone remember the last Social Democratic housing minister, Johan Danielsson? What did Johan Danielsson do for housing policy reform?

Mr. Speaker! The truth is that our housing minister and this government have done more in one year than you Social Democrats did in eight years. It is absolutely fascinating! But that was because you had no housing policy. You had a subsidy policy, but you had no policy for owner-occupied housing and no policy for housing reforms at all. It was unfortunate, because when the recession came, we would have managed it significantly better if things had been done.

I must also ask the Social Democrats: What do you think about the rotavdrag (deduction)? When I meet construction companies in my home county of Gävleborg or in other places in Sweden, they say that the increased rotavdrag makes a big difference here and now. But there are members who mock and shake their heads at it, and other members call it a luxury-rot. We heard it in a previous debate on cultural issues. You Social Democrats call it luxury-rot and luxury-rut. You must decide. Do you want to be part of saving the construction jobs in Sweden by ensuring that households are given the opportunity to, for example, energy-efficientize by replacing windows? Or are you going to stand in the chamber and blacken the government's policy and call it luxury-rot?

During the period of the Miljöpartiets government, the county administrative boards were tasked with building as little as possible in principle. Now, the government has tasked the county administrative boards with cooperating with the municipalities so that as much as possible is built. It is very important that the county administrative boards understand that they are a part of the societal planning. Lantmäteriet is a very important part of the societal construction process. There, the queues were incredibly long, but the government has now put pressure on Lantmäteriet to start delivering.

I have four pages of things the government has done in a year, but I would like to ask the Social Democrats to mention a major housing policy reform you did over eight years that today makes a difference for owner-occupied housing and for young people.

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Johanna Haraldsson (S)

Mr. Speaker! The Minister says in this debate that he is well aware of the situation in the Småland wooden house industry and in Jönköping County, which both he, I, and the interpellator come from.

I know that the minister has met with representatives from the companies that have now been forced to lay off large parts of their staff, but also representatives from the municipalities where the companies are located. I myself attended such a meeting when Andreas Carlson was quite new to his post. Even then, the concern was great when one saw that construction was slowing down and what that could mean for the companies and their employees.

Unfortunately, their fears have been realized. At the timber house factory in Myresjö in my home municipality Vetlanda, 120 people have lost their jobs. In Vrigstad in the neighboring municipality Sävsjö, it is approximately the same number. In Nässjö and Gislaved, 90 people will become unemployed when their employers within the timber house industry are forced to declare the company bankrupt.

But it is not only those who build houses and modules in factories who are affected. Subcontractors who manufacture, for example, windows and floors have also had to lay off staff and are having an enormously tough time. At the window factory in my home municipality, Vetlanda – again – the workforce has decreased by a third as a direct consequence of reduced construction, especially within the industry.

Both companies and trade unions have pleaded for the government to act so that the industry can get through the crisis. They have requested support that allows them to retain staff, but also reforms that get the construction of housing started. But the measures that the government talks about and that Andreas Carlson mentions here are not sufficient. Instead, the parties have now had to act without support from the government. Last week, they signed agreements on short-term layoffs without state support.

The companies and the employees now have to pay the price for the crisis on the housing market themselves, and this in a situation where Swedish wage earners have lost ten years of real wage increases and the companies have been hit by large cost increases.

It is incredibly tough for the employees to be forced to choose between keeping their jobs and lowering their wages. But the industry has had to act to save necessary competence in order to keep production running and have the possibility to scale up when things turn around. Despite this, the loss of competence has been enormous in the industry.

It is not reasonable that it is the individual companies and employees who should pay the price for this crisis. The government can decide to support the industry through state support for short-term layoffs and competence initiatives during the period. But until now, they have stood by and watched - followed the issue, as the minister says in his interpellation answer here.

The Minister has now followed the issue for one and a half years with constant warnings and layoffs of staff and constant bankruptcies. What is the Minister's answer to the industry's cry for support and measures? What additional measures can the Minister imagine taking? He does, after all, open the door for it.

The industry is requesting support to be able to retain competence in the same way as during the pandemic when we supported companies that then risked bankruptcy and large losses of competence. What is the difference between then and now? Why does the government not want to act?

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Mikael Eskilandersson (SD)

Mr. Speaker! With my background and my many years of experience in the timber industry, I cannot help but intervene in the interpellation debate here today.

I think it is striking that the Social Democrats here are showing what populists they are in opposition. The Social Democrats want neither small houses nor owned housing. I think that the insight into the problems in the housing market seems to be largely lacking. In particular, when it comes to small houses such as villas and terraced houses, the insight into the problems and the proposals for actual solutions are quite absent among the Social Democrats.

This is one of several interpellations where the problems created by the Social Democratic government's policy are raised and it is asked why this has still not been resolved by the new government. Unfortunately, not very many small houses were built during the previous government, something that I myself and several other members have noted with both interpellations and concrete proposals, which were directly rejected by the previous government. How would it look today if the previous government had actually listened?

In May 2022, the then Housing Minister Johan Danielsson responded to an interpellation from me regarding what the government will do to increase the construction of small houses. It was, moreover, the fifth housing minister in order during the socialist era. In my interpellation, I pointed out the need for land to build on and repeatable processes that can speed up construction. I also emphasized the need to remove the special requirements that the municipalities say they do not have but which all companies that build small houses constantly testify to.

The then Minister for Housing spoke about the importance of low rents, that repeatable processes were indeed good but that they were particularly good for building rental apartments. Johan Danielsson also emphasized that he himself would like to live in a multi-family house in the future. This was, therefore, the Social Democrats' answer in a government position on a question regarding the need for more small houses.

But now that the Social Democrats are in opposition, they go "all in" as the populists they actually are and suddenly start worrying about the companies, which they would prefer to kill with taxes if they were in a majority position. And suddenly they want more small houses in wood.

The new populism is highly palpable, but it is also very superficial, because the Social Democrats completely lack their own proposals that would actually make a difference. If one truly had good proposals in the housing area that would help our companies in the timber house industry, there is every possibility of implementing these today – the Sverigedemokraterna and Socialdemokraterna have their own majority in the Committee on Civil Affairs. My door is constantly open, and any Social Democrat who wants to negotiate any housing issue is welcome to come to me and discuss it. The committee can write laws themselves, something we recently saw another committee do regarding gender.

Beautiful words and rhetoric do not, however, change the fact that the Social Democrats lack concrete proposals on the housing area. It is not enough to mockingly give names to important reforms, which the Social Democrats enjoy doing. One must come up with own proposals.

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Leif Nysmed (S)

Mr. Speaker! I thank the Minister for the answer. I just want to start by stating that one sends up two members - one from the Sweden Democrats and one from the Moderates - to try to remove the discussion about the crisis that actually exists today in housing construction. It is a bit sad, I think. One proceeds on the assumption that an increased tax deduction, which enters into force on July 1, already provides an effect. I can say that that perception is not shared by the many members of Byggnads who today have become unemployed - I will return to that.

The year 2023 is a lost year. The number of bankruptcies in the construction industry was at a record high during 2023; it increased by 31 percent, which is far more than in our neighboring countries. At the same time, we had zero propositions from the government to get housing construction started.

The year 2024 does not look any better either. There are still no propositions on our table about getting the construction started. I hope that the so-called kick-off will come soon. It has been one and a half years now, and in the budget, it is largely empty.

Several judges point out that there will be seven difficult years ahead in housing construction. It is about the fact that we cannot get housing construction started, regardless of whether it is small houses, multi-family houses in the form of rental apartments or condominiums. We Social Democrats would like to see all types of tenure built so that we have a mixed development and that everyone can demand a home. But it will not be built as long as there is no purchasing power, a demand for the homes.

I understand that it is difficult for some members here, who criticize previous governments that ensured that it was built and that there were opportunities, that it is not possible to build today. We are down to catastrophic figures: approximately 25,000 last year and under 20,000 this year, according to Boverket. We have to see where it lands; there are even more negative figures than that.

Today, due to the government's paralysis of action, the number of outright layoffs, i.e., not notices, in the construction industry has risen from 1,000 layoffs in 2022 to over 4,000 during last year. It is a sharp increase. There, one has not noticed any future increase of the rotavdrag as help, I can say.

This continues during 2024. One of the large construction companies laid off a third of its staff here in the Stockholm region last week – a third! One is supposed to have 24 years of employment in the company to keep the job. It is a crisis in housing construction here and now.

I am also receiving signals that the interest in the rotavdrag is decreasing. I have no figures that can confirm this, but I have received such signals. That alone is worrying.

I want to ask the Minister for Housing - to stick to what we are talking about now, that is, the crisis here and now: When does the Minister believe housing construction will again reach the housing needs calculated by Boverket? How is the small house industry and the construction industry supposed to survive seven difficult years? Is it not time for a crisis commission for housing construction?

(cont. § 9)

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