Social Housing Challenges the Swedish Rental Model

In the report Social housing på svenska? Om socialbostäder och den svenska modellen (Social Housing in Swedish? On Social Housing and the Swedish Model), authored by Bo Bengtsson, Professor Emeritus of Political Science at IBF, and Martin Grander, Associate Professor and Senior Lecturer at the Department of Urban Studies at Malmö University, the conditions for introducing a needs-tested housing system in Sweden are examined.

Most [Western] European countries have some form of social housing, even if the systems differ in design and scope. Sweden is an exception in this regard. Instead, a universal housing policy was established as early as the 1940s, with the aim of avoiding stigmatization and segregation. In practice, this meant that municipalities and the public housing sector were tasked with providing homes for all types of households, without needs-testing. This model has been central to Swedish housing policy for more than 70 years, although it has gradually been eroded in recent decades.

The researchers note that it is entirely unique in Europe not to have an institutionalized system of needs-tested housing. The report highlights how Swedish housing policy has been institutionalised by early historical choices.

“The social and economic problems on the housing market are severe today. The question of a Swedish model for social housing has received increased attention as these problems worsen. But the Swedish system has deep historical roots and is difficult to overturn,” says Bo Bengtsson.

Although Sweden largely pursues a universal housing policy, there are also selective elements, such as housing allowances and social contracts. But shifting to a fully means-tested system of social housing would, according to the report, amount to an entirely new housing regime. There has been no means-tested housing sector in Sweden since the mid 1940s when the previous system of social housing dedicated to poor families with many children was abolished.

One of the greatest obstacles concerns rent setting. The Swedish model is based on collective negotiations between tenants’ organizations and property owners. A system of social housing would, in all likelihood, mean breaking up this arrangement.

“Social housing would strongly challenge, and probably dismantle, the Swedish rent-setting model,” says Bo Bengtsson.

This would likely result in Sweden moving toward a “dual” housing system based on market rents in part of the rental stock and needs-testing in the other part. Such concerns have led both the Swedish Union of Tenants and Public Housing Sweden to be openly critical of social housing.

The authors also stress that a system of social housing would require state subsidies to maintain reasonable standards in the needs-tested stock. Since the 1980s, housing subsidies have been a politically charged issue in Sweden, and reintroducing them would likely be controversial. In addition, a separate regulatory framework would need to be formulated for the means-tested sector.

“A system of this kind requires long-term state responsibility. Building up an entirely new administrative structure for needs-testing and housing allocation would be a significant political challenge,” says Bo Bengtsson.

The report’s overarching conclusion is that the prospects for introducing social housing in Sweden are limited. The existing system is strongly institutionally embedded and shaped by long historical continuity.

“We find it hard to see how a reform of this magnitude could be implemented in the foreseeable future,” concludes Bo Bengtsson.