A large part of the municipalities’ leases are written so that they are calculated using a certain index. In the agreements with SBB, it is usually the CPI inflation figure from the month of October that is decisive. In 2022, inflation in October was a record high 10.9 percent. This means that a large number of municipalities are receiving the highest rent increases they have had since the beginning of the 90s.
Already strained economy
The settlements that many municipalities made with SBB where they sold properties to rent back have been criticized for having been a bad financial deal for the municipal residents.
– Normally speaking, it is not something that you profit from financially, says Annika Wallenskog, chief economist at the employer organization Sweden’s Municipalities and Regions
Many of the municipalities have had a strained economy, which was often the reason why they sold the properties. The rent shock is now blocking this further.
– We see very high cost increases in the municipalities and 124 municipalities have forecast deficits this year, says Annika Wallenskog.
Painful rent increases
For the municipality that pays the most to SBB each year, Härnösand, the rent increase is painful. The rent increase of nearly 11 percent gives an increased rent of nearly SEK 18 million. The year’s total costs to SBB end up at just over SEK 160 million before state VAT contributions.
It can be compared with the budget for Härnösand’s Community Board, which manages other environmental work, building permits, streets and parks and food inspections. Their budget for 2023 is approximately 190 million.
Today, Härnösand’s economy is already under pressure. For example, this year they announced a savings requirement for the school corresponding to about 20 teaching positions.
– It is very easy with hindsight to say that you should have thought differently, says Härnösand municipal councilor Andreas Sjölander (S).
Cuts in public services await many municipalities.
– It is tough for many. In the budget for 2024, it looks even worse. Then you try to find solutions with different types of savings and in some cases we will also see tax increases, says Annika Wallenskog.