Tuesday, May 11, 2010

Housing shortage hampers Stockholm's growth

STOCKHOLM. In a new regional development plan expected to be adopted by the County Council assembly today, Stockholm sets the ambitious goal to become Europe’s most attractive metropolitan region.
But the plan, called RUFS 2010, lists a number of challenges on the way to realizing that vision. One of the big obstacles will be the acute shortage of housing that hampers the growth of Sweden’s capital region.
There are plenty of statistics that illustrate the problem. RUFS 2010 expects Stockholm County, which today has just over 2 million inhabitants, to grow with more than 22,000 inhabitants yearly up to 2030. That’s probably a low estimate, considering that the population of Stockholm County grew by almost 38,000 in 2009.
In an exhibition in central Stockholm (right), visitors can view a model of the City of Stockholm (one of 26 municipalities in Stockholm County). The model shows plans for new development projects. A lot of new housing is in the pipeline, but far from what is needed especially if you look at it on the regional level.
An estimated 13,200 new homes per year are needed in Stockholm County (for a population growth of 22,000). Last year construction began on 5,100 homes, according to the Stockholm County Administration Board. This year the figure is expected to be 7,400.
The Property Federation (Fastighetsägarna) in Stockholm released a study a few months ago that illustrates the problem in a different manner. The study compares how long it takes to find and sign a contract for a small (40 square meters) rental apartment in eight European capitals.
In six of the cities in the study – Oslo, Copenhagen, Helsinki, Brussels, Madrid and Berlin – you could find an apartment immediately. In Amsterdam it would take you one to five week.
For Stockholm the figure was a shocking 307 weeks.
When OECD did a study of Stockholm in its Territorial Reviews series four years ago the housing shortage was pointed out as one of the main problems for the continued growth of the region. Not much has changed since then
Depending on whom you ask, the slow pace of construction in the Stockholm region is explained by a number of reasons from complicated planning processes and high costs to lack of competition in the building sector.
The political blame game is gaining speed as Sweden heads for national and municipal elections in September. The housing shortage will, as usual, be a hot issue in Stockholm.