Response to interpellation 2023/24:803 on the quality of housing policy measures
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
The debate concerned the quality of the government's housing policy measures. KD argues that it is too early to draw conclusions about the effects 1 2 3. KD emphasizes that planning incentives function as a bonus for municipalities 1 2 3, that the government has raised the ceiling for the rotavdrag 1 2 3 and that the investment support for rental apartments was not well-utilized 3. KD works with structural measures such as shortening lead times and simplifying regulations 4. KD argues that production support is not financed by half 4 and that state construction loans are difficult to reconcile with EU state aid rules 4. S argues that the policy is right-ideologically driven and harmful 5. S wants to push for a social housing policy 5 and considers that the ordinance lacks in craftsmanship 5. S criticizes that the government has denied stimulus measures and argues that the planning incentives risk creating 100 percent deadweight cost 6 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! Markus Kallifatides has asked me if I am satisfied with the quality and the effects of the housing policy measures that the government has taken so far, and if not, what initiatives I am prepared to take.
Housing construction in Sweden has decreased as a result of global factors that have contributed to high inflation and higher interest rates. This has affected households' demand for housing and has simultaneously contributed to production and financing costs increasing rapidly for construction companies. We see that inflation is clearly falling and that the inflation fight is taking effect. In the long term, lower interest rates are expected to contribute to a recovery in the construction industry.
The government has, since taking office, taken several different housing policy measures to meet the decline in housing construction and save jobs in the construction sector. Among these measures are, as Markus Kallifatides himself mentions in the background to his question, planning incentives for municipalities to adopt detailed plans for the construction of small houses and the conversion of premises into housing. These incentives, which the municipalities can apply for from April 2 of this year, aim, among other things, to also maintain a good planning readiness in the municipalities, which is important to enable future housing construction.
Among other measures, the review of the rules on adjusting rents for newly produced apartments—so-called presumption rents, the review of borrower-based macroprudential measures, and the investigation of how to promote coordination of efforts for sustainable community building in Norrbotten and Västerbotten counties can be mentioned. Furthermore, for example, the possibility of time-limited building permits for housing has been extended to 1 May 2028.
Some measures are of a more short-term character and could be implemented quickly, such as a temporarily increased ceiling for the rotavdrag, while other measures are more long-term, such as the appointment of the Productivity Commission, which recently submitted a comprehensive partial report in which an entire section is dedicated to housing and construction with several different proposals for measures.
Regarding the housing policy measures being taken, trade-offs must first be made between a number of different aspects, including what needs exist, what can be done, and what is desirable. Trade-offs also need to be made between the possibility and the importance of getting the measures in place quickly, alternatively if more investigation and referral is needed before the change can be launched. It is also a matter of weighing how the measures achieve their intended effects and what is possible and reasonable to ensure, as well as the degree of complexity in the design of the measures.
The government has thus considered a number of different aspects in the design of the measures taken within the housing policy area so that the measures and the effects of these shall be of good quality, but it is too early to draw any definitive conclusions about the effects.
The Government continues to follow the developments within the construction and housing sector and does not rule out that further measures may be needed.
Markus Kallifatides (S)
Mr. Speaker! Thank you, Minister, for the answer! It is nice to see you again here in the chamber.
In my interpellation, I therefore asked a general question about the quality of the housing policy measures taken against the background of a specific example, namely the support for municipalities' work with detailed plans for the establishment of small houses or the conversion of premises into housing. It is a reform that I am following. I have submitted a written question and received an answer.
I will take an example to explain to the audience what this concerns. In Karlstad Municipality, an application has been submitted for 900,000 kronor in support, Mr. Speaker, for a decision on the adoption of a detailed plan this year. It concerns Dingelsundet norra and the development of more housing. From everything to judge by, they will receive support for this. A detailed plan has been prepared, and there were consultations during 2022. But the County Administrative Board has overturned the decision. It is a decision that has now been appealed and is to be examined in the Land and Environment Court.
Mr. Speaker! I see the risk that this will be one of the first reforms where we get 100 percent so-called deadweight cost, that is to say that we provide support that does not at all have the intended effect, which in this case is more small houses and more premises that are converted into housing. Against that background, I ask if the Minister is satisfied with the quality of this.
Statsrådet Andreas Carlson (KD)
Mr. Speaker! I agree with what Markus Kallifatides says about it being nice to see each other again for an interpellation debate in the chamber. I think it is important to follow these reforms, and I am pleased that the member also does so.
As I said in my answer, different aspects have been considered in the design of the measures. They have been in place since April 2. It is too early to draw definitive conclusions about the effects, which is what the member is asking for. One can, of course, follow this and make assumptions and various political analyses, but to look at the reforms as a whole, I mean, is simply too early.
The Government has assessed that there is no reasonable possibility of reliably distinguishing detailed plans that would not have come to fruition without the Government's support from plans that would have been established regardless. Therefore, the support is designed to function as a bonus for those municipalities that establish detailed plans for the currently relevant purposes. I have also presented this in a response to a written question, Mr. Speaker, and this applies regardless of the extent to which the plans would have been established without the support. The support is, however, designed so that it rewards plans with a large number of dwellings or a large local area for conversion.
It is of course important to follow this. It could be that it facilitates things for municipalities that had already intended to make decisions on detailed plans, and then it is of course up to the municipalities to decide how the support is used. It could facilitate yet another project or for expanding the possibilities to make building land available, for example, where the municipalities have a very large responsibility.
The bonus is therefore intended to enable more housing to be built and to facilitate the municipalities' work in producing detailed development plans. Not least when it comes to converting premises to housing, we know that they are occasionally an obstacle. It is described that the cost of converting detailed development plans to apply to residential purposes causes one to fall at the finish line and not be able to convert premises to housing because it requires a change and thus a virtually new detailed development plan. These can be costs associated with this for the municipalities of the same magnitude as for producing a completely new detailed development plan. The planning incentives are intended to facilitate for municipalities to convert premises to housing but also to increase the construction of small houses.
We will, of course, follow this. The reforms have been in place since April 2 of this year, and therefore it is too early to draw any definitive conclusions about the effects.
Markus Kallifatides (S)
Mr. Speaker! I mean that there is a wide range of possibilities between drawing definitive conclusions and actively considering and reflecting on measures while they are being implemented.
Mr. Speaker! We are, therefore, in a very serious situation. We are down to a forecast of 25,000 completed homes by 2025, to compare with a construction need estimated at 67,300 homes every year until 2030. We see a weak labor market that is hindered by a lack of housing supply. Stockholm Chamber of Commerce forecasts a production loss in the country of between 400 and 1,000 billion kronor due to the lack of housing supply.
Mr. Speaker! The green industrial transformation in large parts of Sweden is threatened by deficient urban planning, community building, and housing construction. Overcrowding in Sweden is now at the EU average level and is the fastest increasing in all of Europe. The level has previously been low in Sweden.
Mr. Speaker! Construction workers are now losing their jobs. Every day, construction companies are going bankrupt. Young construction workers are not getting their apprenticeships. They are not getting their first employment. The industry cries out in unison: We are going to lose our staff! It will be difficult to get started moving forward.
In that situation, the government has removed the investment support that existed for the construction of rental apartments with lower rent levels. Despite the Fiscal Policy Council's assessment that one could have pursued a somewhat more expansive fiscal policy without jeopardizing the fight against inflation, the government has said no to all stimulus measures, including for housing construction. This applies, for example, to the measures we Social Democrats have proposed.
Despite the National Audit Office condemning the rotavdrag and proposing that the ceiling should be lowered, the government raises the ceiling in the rotavdrag. It underfinances the county administrative boards, which, according to unanimous investigators and experts, have a very important role to fill here. The county administrative boards often create a kind of bottleneck in the social construction and housing planning processes, possibly because they are underfinanced. This is a situation that is exacerbated by this government's actions. It halts infrastructure plans and agreements with municipalities, which also include housing construction, for a long time ahead.
It is in this broader context, Mr. Speaker, that I posed my specific question regarding the reform of support for municipalities' work with detailed plans with two different purposes, small houses or conversion of local premises to housing.
I repeat my question: Do the Minister and the government not see that measures are needed, partly of a completely different magnitude, and partly of a different quality than this?
Statsrådet Andreas Carlson (KD)
Mr. Speaker! There are several different aspects raised by the member and several different claims being made. I will not be able to address them all as an answer to the question that has been asked. All the circumstances now mentioned in the chamber are not described in the interpellation, even though the member says they are; instead, the focus is on the housing policy measures that the question concerns: planning incentives for small house construction and for converting premises to housing.
There, my statement is that it is too early to draw any definitive conclusions about the effects. The member says that there is an opportunity to consider and reflect. I am happy to do so, but one also needs a bit more basis in order to be able to do so in a way that does not become arbitrary. One cannot take a single example and base it solely on that.
But I think one can expect that municipalities that receive a share of the stimulus funds take a great responsibility to use the money to facilitate housing construction. Even if it concerns a plan that has been held for a long time and one receives a share of these funds, it facilitates the municipality's work to expand its detailed plan area and make buildable land available in attractive locations. One might be able to manage its work in another way that provides more support to a very critical sector. It is this sector Kallifatides is on, Mr. Speaker, and it is therefore about getting the different instances to work even more actively and constructively. The municipalities are one part, and the county administrative boards are another.
The County Administrative Boards have been tasked by the government to report on which measures they have taken in cooperation with municipalities to develop and increase housing construction in municipalities where there is a housing shortage. I followed up on the question with the County Governors of Sweden last week when I met them. We therefore have a close cooperation with the County Administrative Boards, and it is quite right as the member says that they have a central role in this regard.
Other parts that the member raises concern, for example, the rotavdrag (deductible for home improvements). One of the measures that the government has taken is the increase of the ceiling for the rotavdrag. In the Hantverkarbaromettern, which is produced by Beijer Byggmaterial, 80 percent of the respondents answer that the rotavdrag has a large or very large significance for the craft industry. To the question of what is the most important thing that decision-makers should do for the construction industry, 65 percent of the participants answer that the most important thing is to increase the rotavdrag.
When it comes to the investment support, the member knows, Mr. Speaker, that it has been evaluated. On behalf of Hyresgästföreningen, Tyréns presented a report which showed that around four out of ten dwellings had been built even without the support, which means that approximately 10 billion kronor of what has been paid out has gone to dwellings that would have been built anyway. It can hardly be said to be particularly well-used tax money.
If Markus Kallifatides is worried about deadweight costs, the question is why he is splitting hairs while swallowing camels. This very strong commitment to potential deadweight costs in the planning stimuli should, in that case, lead to considerable reflection regarding the investment support. Tyrén points out that 10 billion of what has already been paid out has gone to housing that would have been built anyway.
The question hangs a bit in the air, Mr. Speaker. Is it not the case that different yardsticks are used for one's own reforms and for those that the government has now undertaken and for which it is still too early to make any real evaluations in this situation?
Markus Kallifatides (S)
Mr. Speaker! Yes, some of the dwellings might have been built anyway, but they would not have had the same rent level. It would have resulted in a lower rent for those living there for that money, so the deadweight cost is not zero in this case – at least not if one cares about the people who are seeking housing.
The government has taken a number of good measures in the housing policy area. Several of them are mentioned in the interpellation response. It is about reviewing the presumption rent system and looking at the social coordination. It concerns Norrbotten and Västerbotten, and it likely has national validity. It also concerns a number of Lantmäteriet's digitalization processes. I welcome all of this.
I listed points where we Social Democrats are critical, sharply critical. I hope it appears from this interpellation debate. We mean, Mr. Speaker, that what is being conducted is a very right-ideologically driven policy. We mean that it is harmful for Sweden, for the construction sector, and for the whole society. I would also like to take the liberty to assert that it is not particularly Kristdemokratic.
I mean, beyond this, Mr. Speaker, that the craftsmanship itself is flawed. That is what my interpellation aimed at. The ordinance regulating this support could look different and perhaps have other effects. I urge the Minister for Infrastructure and Housing, Andreas Carlson, to review the ordinance. Can it be designed in a better way?
Mr. Speaker! We Social Democrats will push for a social housing policy with a richer toolbox.
I would like to conclude by asking the question to Andreas Carlson: Is it not time to start settling up with us rather than with others before you run the risk of having to leave the Riksdag in the next parliamentary election? That is something to reflect on during the summer, Andreas Carlson. I wish you a good one and thank you for the debate.
Statsrådet Andreas Carlson (KD)
Mr. Speaker! One cannot underestimate the commitment. But if one looks at the Social Democrats' shadow budget, one sees that the production support they propose is not even half-financed. There are also proposals for state construction credits, and as far as we can judge, it is difficult to make this compatible with the EU's state aid rules. It is, of course, easy to sit in opposition with perhaps well-intentioned initiatives and proposals, but it would have been better if several of these had been put in place earlier when there was actually a chance to implement them.
Then I also think of the structural measures that were largely conspicuous by their absence for eight years. That involves a lot about shortening lead times, simplifying and improving regulations, and making buildable land available in attractive locations, to name a few examples. We are now working on that in full.
I am pleased that Markus Kallifatides sees that several of the steps we have taken are in the right direction.
I want to conclude by saying that I am a strong supporter of good dialogue. I believe it is good to have as broad a consensus as possible. I also believe that such a consensus exists, not least regarding measures aimed at addressing precisely those structural problems on the housing market that I mentioned.
It is also important to see now that the fight against inflation has taken hold, that inflation is heading downwards and that we are now entering a new phase in economic policy where we can make investments to build a wealthier Sweden. We will return to this in the autumn in the budget that will then be laid before the Riksdag.
I would like to once again thank the members for their commitment and wish everyone a good and pleasant summer. This was the last interpellation debate for me this parliamentary session. Markus Kallifatides and I have had a few such, and I thank both for those debates and for this one.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.