Sweden’s municipalities have extracted over SEK 12 billion in profit from their public housing companies, reports Siren news agency.
At the same time, many households struggle with increased rents.
– It’s insane that they take out so much in profit when we struggle so hard to pay the rent, says mother of four Sara Ohlsson to TV4 Nyheterna.
In 2011, new conditions were introduced in the Act on Public Utility Municipal Housing Corporations. The change in the law gave the municipalities the opportunity to extract profits.
Before the change in the law, the basic rule was that the profit stayed in the public housing companies and was used there to, among other things, build new apartments and refurbish the old ones.
Now a new review, carried out by the news agency Siren, shows that the country’s municipalities took out SEK 12.8 billion from their public housing companies between 2011 and 2022.
The tenant association critical
The tenant association takes the information seriously.
– I think it is very serious that we have a public benefit that exists to reduce housing costs and offer rental properties for everyone, but where the owners take the money. It makes the purpose more difficult and it is not acceptable.
At the same time as the municipalities reap billions in profit, many households struggle with shockingly high rents and a tough financial situation.
Sara Ohlsson, who lives in public housing with four children, has been forced to cut back on things like ice cream, Saturday sweets and leisure activities after a rent increase.
– It is insane that they take out so much in profit when we struggle so hard to pay the rent, she tells TV4 Nyheterna.
– I know that many people twist and turn every single penny to survive, and then rent increases can be felt very much in the wallet.
“Housing provision and social integration”
The amendment to the law in 2011 thus made it possible for the municipalities to extract the entire annual profit if the money is used for “housing provision and social integration”.
The municipalities also have the right to withdraw half of the housing companies’ profit from the sale of properties without having to specify how or what the money is to be used for.
According to Martin Hofverberg, it is a “rubber clause” that leaves free room for interpretation for the municipalities.
– The loophole is that there are no sanctions.
The majority of withdrawals from the public utility are, however, permitted, the compilation shows.
This is how much the municipalities charge
Eskilstuna municipality accounts for the greater part of the unauthorized transfers, i.e. SEK 347 million in total between the years.
In second place are rental properties in Norrköping with a total of SEK 89 million. Mölndalsbostäder has made the most unauthorized transfers – seven years in a row to a value of 35 million.
According to Siren, the largest permitted transfers are accounted for by Stockholm’s three non-profit housing companies Stockholmshem, Swedish housing and Familjebostäder.
Facts: The Public Benefit Act
The law was introduced on 1 January 2011 and means that the public good must combine commercialism with social responsibility.
There are limitations in the law on how much of its profit a housing company can hand over to the municipality. The transfer of value may not exceed an amount corresponding to the government loan interest plus one percentage point of the company’s share capital during a financial year.
However, the law gives the right to exceptions. The municipality may take over the housing company’s entire profit if the money “promotes integration and social cohesion or measures that meet the housing needs of people for whom the municipality has a special responsibility”.
The municipality is also allowed to transfer half of the net income from the housing companies’ property sales without specifying what the money is to be used for.
Source: Boverket