Sweden needs to build a new Stockholm in five years - but is investing in renovations instead

The Swedish government announced today that it is making one billion Swedish crowns, or $120 million, available for renovations of apartments. The economic means cover ugrades to increase energy efficiency, repairs and refurbishments of some 26,000 buildings in poorer areas all over the country, according to Aftonbladet.

The budgetary measure comes as part of a larger support package meant to improve living conditions, keep rents down and promote renewable energy.
That's all fine and well, but on the other hand Sweden has some more acute housing problems to see too. 

The real problem is the need for new residences.

The housing shortage has already been felt in Sweden for some time and the situation is not improving. Entrepreneurs fearing for Stockholm's startup scene have even organized a protest to voice their concern over the housing situation.
Last week the Swedish National Board of Housing, Building and Planning dropped a bomb when it updated its prognosis for required new residences in Sweden. 

The need is huge according to the newest estimates.

According to the new estimates from the National Board of Housing, Building and Planning Sweden needs to build an amount of residences corresponding to a new Stockholm within five years to accomodate the growing need, Svenska Dagbladet reports. That's about 440,000 new residences, or on average 88,000 new residences per year to be built by 2020. For comparison, an annual average of 32,000 residences have been built in the last four years, SvD writes.
And the shortage will keep growing. Until 2015, the total need for new residences is 710,000.

Previous resports from the National Board of Housing has underestimated the growing amount of single households, which is being fueled further by the influx of immigrants expected to receive permanent residence permits in Sweden. 
Sweden's infamously unproductive construction sector is the only hope. 
There is currently no plan to deal with the housing shortage other than hoping that the private construction sector suddenly decides it seems profitable to build cheap apartments.

The construction sector in Sweden is however not much to hope for. During the last couple of decades it has faced a lot of poltical scrutiny for its improductivity. Curiously enough, it has demonstrated the economic anomaly of seeing wages increase faster than labour productivity. Meanwhile, production costs are racing away from the consumer price index.

A construction craze may not be much to hope for - but if one does come Swedes should be wary.

Last time Sweden saw a construction craze it ended very badly. According to SvD, the last time Sweden saw similar needs for new housing was during the 60s. Many of the country's city centers were ravaged by functionalist architecture promoted by political ideology. In central Stockholm, Klarabergskvarteren were hit the hardest.

Amongst other aesthetic transgressions, the construction craze resulted in levelling much of central Stockholm to the ground to build what is now the most abhorrent part of the city - where, as it happens, Stockholm's most expensive apartment was sold a few months back. 

Published: http://nordic.businessinsider.com/sweden-needs-to-build-a-new-stockholm-in-five-years---but-is-investing-in-renovations-instead-2016-7/



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