Sweden’s centre-left government yesterday unveiled its strategy to tackle the nation’s housing crisis, pledging the construction of up to 15,000 properties to rent annually.
Prime Minister Stefan Löfven has promised that the government will invest SKr 3.2 billion a year in the project, as of 2016. The reform will be financed through the lowering of the tax relief on home repair and maintenance – ROT – from 50 per cent to 30 per cent.
Prior to the general election last year Stefan Löfven promised he would leave ROT well alone. On Wednesday, the PM said that soaring ROT costs lay behind the U-turn. He also argued that the reform would create jobs.
“This means we will be able to build more new apartments and shift the emphasis from repairs to new construction. We have a housing shortage in 150 of Sweden’s 290 municipalities,” he said.
Ulf Kristersson, the Moderate Party’s spokesman on economic policy, is highly critical of the plans, saying it was a poor idea to re-introduce subsidies on the Swedish housing market and that it could pave the way for a black market.
Emil Källström, the Centre Party’s spokesman, has warned that the reform would in fact cause construction costs to soar. “We know that building subsidies end up in the pockets of the construction firms in the form of bigger profits,” he said.