Opinion: Sweden's housing market needs radical reform, mirroring Nordic neighbors

Sweden's housing policy has reached a dead end, impacting not only individuals shut out of the market but also the nation's economic development and competitiveness. While Nordic neighbors have pursued different paths, Sweden hesitates, according to an opinion piece in Dagens Nyheter.

The past decade has seen housing prices and rents outpace incomes across the EU, leading to increased homelessness among vulnerable groups. Even essential workers like police and healthcare professionals now struggle to find housing. The escalating housing crisis is recognized as a major socioeconomic challenge in Europe, prompting the EU to launch its "European affordable housing plan" to boost the supply of sustainable, affordable homes.

A report from Danske Bank highlights Sweden's uniquely weak housing policy, with a notable lack of ambition for economically disadvantaged groups. This dysfunction extends beyond individuals, threatening companies' ability to secure talent and hindering urban growth. The authors attribute this situation to "path dependency," where historical decisions and institutional choices, such as the "collective rent negotiations" based on the "value-for-use" model, have created rigid structures difficult to alter.

Historically, Sweden was a global leader in "social housing policy." However, this era has passed. The article calls for a radical shift, suggesting that Sweden needs to learn from its neighbors and implement more decisive housing reforms to address the current crisis.