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Social Housing Finance in Sweden

Author

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  • Bengt Turner

    (Institute for Housing Research, Uppsala University, Box 785, 80129 Gävle, Sweden, bengt.turner@ibfuu.se)

Abstract

Sweden historically had a highly subsidised housing construction and rehabilitation. Subsidies were mainly channelled through an interest subsidy system, which reduced initial capital expenditures. A boom in the housing market in the late 1980s turned into a 'bust' in the early 1990s. This was due to a combination of factors: a lower inflation rate, a deep economic recession and reduced interest subsidies in combination with a tax reform. The effect was to create a large price fall, vacancies, a low construction rate and large defaults. The bank crisis was counteracted by a tighter credit market, with a more thorough screening of borrowers. Municipal housing companies lost their protected position on the credit market in the early 1990s. Many of the companies were severely hurt by an increasing number of vacancies, and had an insufficient safeguard in terms of a low equity. It is thus anticipated that municipal housing companies will be an important target for bank screening in the future, and it is anticipated that banks will develop more sophisticated risk-management techniques in the housing market, which also will include municipal housing.

Suggested Citation

  • Bengt Turner, 1999. "Social Housing Finance in Sweden," Urban Studies, Urban Studies Journal Limited, vol. 36(4), pages 683-697, April.
    • Handle: RePEc:sae:urbstu:v:36:y:1999:i:4:p:683-697
    DOI: 10.1080/0042098993402
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    References listed on IDEAS

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    1. Kearl, J R, 1979. "Inflation, Mortgages, and Housing," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 1115-1138, October.
    2. Englund, Peter, 1990. "Financial deregulation in Sweden," European Economic Review, Elsevier, vol. 34(2-3), pages 385-393, May.
    3. Koskela, Erkki & Loikkanen, Heikki A. & Viren, Matti, 1992. "House prices, household saving and financial market liberalization in Finland," European Economic Review, Elsevier, vol. 36(2-3), pages 549-558, April.
    4. Muellbauer, John, 1994. "The Assessment: Consumer Expenditure," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 10(2), pages 1-41, Summer.
    5. Agell, J. & Berg, L., 1995. "Did Financial Deregulation Cause the Swedish Consumption Boom?," Papers 1995-21, Uppsala - Working Paper Series.
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    Cited by:

    1. Chen, Jie, 2006. "Housing Wealth and Aggregate Consumption in Sweden," Working Paper Series 2006:16, Uppsala University, Department of Economics.
    2. Duncan MacLennan & Alison More, 2001. "Changing Social Housing In Great Britain: A Comparative Perspective," European Journal of Housing Policy, Taylor and Francis Journals, vol. 1(1), pages 105-134.
    3. Davis, Steven J. & Henrekson, Magnus, 2005. "Wage-setting institutions as industrial policy," Labour Economics, Elsevier, vol. 12(3), pages 345-377, June.
    4. Nathanael Lauster, 2006. "A room of one’s own or room enough for two? Access to housing and new household formation in Sweden, 1968–1992," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 25(4), pages 329-351, August.

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