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BUILDING AFFORDABLE HOMES Challenges and Solutions in the Nordic Region

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BUILDING AFFORDABLE HOMES Challenges and Solutions in the Nordic Region BUILDING AFFORDABLE HOMES Challenges and solutions in the Nordic Region Edited by Moa Tunström NORDREGIO REPORT 2020:2 nordregio report 2020:2 1 BUILDING AFFORDABLE HOMES Challenges and solutions in the Nordic Region Edited by Moa Tunström NORDREGIO REPORT 2020:2 Building affordable homes Challenges and solutions in the Nordic Region Nordregio Report 2020:2 ISBN (print) 978-91-87295-83-6 ISBN (pdf) 978-91-87295-85-0 ISSN 1403-2503 DOI: doi.org/10.6027/R2020:2.1403-2503 © Nordregio 2020 Nordregio P.O. Box 1658 SE-111 86 Stockholm, Sweden [email protected] www.nordregio.org www.norden.org Editor: Moa Tunström Contributors: Curt Liliegreen, Antti Kurvinen, Jón Rúnar Sveinsson, Berit Irene Nordahl, Anna Granath Hansson Cover photo: Brandon Griggs/Unsplash Nordregio is a leading Nordic and European research centre for regional development and planning, established by the Nordic Council of Ministers in 1997. We conduct solution-oriented and applied research, addressing current issues from both a research perspective and the viewpoint of policymakers and practitioners. Operating at the international, national, regional and local levels, Nordregio’s research covers a wide geographic scope, with an emphasis on the Nordic and Baltic Sea Regions, Europe and the Arctic. The Nordic co-operation Nordic co-operation is one of the world’s most extensive forms of regional collaboration, involving Denmark, Finland, Iceland, Norway, Sweden, and the Faroe Islands, Greenland, and Åland. Nordic co-operation has firm traditions in politics, the economy, and culture. It plays an important role in European and international collaboration, and aims at creating a strong Nordic community in a strong Europe. Nordic co-operation seeks to safeguard Nordic and regional interests and principles in the global community. Common Nordic values help the region solidify its position as one of the world’s most innovative and competitive. The Nordic Council of Ministers is a forum of co-operation between the Nordic governments. The Nordic Council of Ministers implements Nordic co-operation. The prime ministers have the overall responsibility. Its activities are co-ordinated by the Nordic ministers for co-operation, the Nordic Committee for co-operation and portfolio ministers. Founded in 1971. The Nordic Council is a forum for co-operation between the Nordic parliaments and governments. The Council consists of 87 parliamentarians from the Nordic countries. The Nordic Council takes policy initiative s and monitors Nordic co-operation. Founded in 1952. Stockholm, Sweden, 2020 Table of contents Preface ............................................................................................................................................6 Why does the contemporary Nordic welfare state lack affordable housing? Moa Tunström, Nordregio ............................................................................................................................. 7 Housing construction in the market periphery – Denmark Curt Liliegreen, The Knowledge Centre for Housing Economics ................................................13 Housing construction in the polarized Finnish housing market Antti Kurvinen, Tampere University ........................................................................................................... 23 Assisted Housing in Iceland Before and After the Crash of 2008 Jón Rúnar Sveinsson, The Reykjavík Academy ....................................................................................... 47 Newbuilds and households in the market periphery – Norwegian housing and planning policy at a glance Berit Irene Nordahl, Urban and regional research institute OsloMet – Oslo Metropolitan University .................................................................................................................59 Sweden: How could new-build be made affordable to lower-income groups? Anna Granath Hansson, KTH Royal Institute of Technology ........................................................ 71 nordregio report 2020:2 5 Preface As part of the Nordic Co-operation Programme This report is the result of work done for the for Regional Development and Planning 2017– thematic group Sustainable Cities and Urban De- 2020, three Nordic thematic groups have been es- velopment. The group focuses on: 1) social sus- tablished in the following areas: tainability and gender equality; 2) spatial plan- ning; 3) urban qualities in small and medium-sized 1. Sustainable rural development cities, and the urban-rural relationship; and 4) the 2. Innovative and resilient regions growth and development of Arctic cities. Within 3. Sustainable cities and urban development these broad themes the group decides what ac- tivities to conduct, and the researchers involved The groups have been set up by the Nordic Commit- are responsible for the results. tee of Senior Officials for Regional Policy (EK-R), The topic of this specific report, affordable under the Nordic Council of Ministers for Sustain- housing, is an issue that is high on the Nordic agenda, able Growth, and the members are representatives and one where there is potential for Nordic learning. of relevant ministries, national authorities, regional authorities and cross-border co-operation commit- tees. One purpose of the thematic groups is to im- plement the co-operation programme by contrib- uting to the exchange of knowledge and experience between regional policy stakeholders, by promoting Kristian Elleby Sundquist Nordic perspectives and by highlighting the impor- chair of the Nordic thematic group tance of regional policy issues for sustainable devel- Sustainable Cities and Urban Development opment and growth. nordregio report 2020:2 6 Why does the contemporary Nordic welfare state lack affordable housing? Moa Tunström Nordregio nordregio report 2020:2 7 An in-depth study of Nordic housing policy devel- mon policy model, or that everyone should learn opment (Bengtsson 2013), whose title translated the same thing. It may imply, for example, that to English reads “Why so different?”, makes clear the Norwegian policy model could find inspiration that housing policies vary between the Nordic from the Danish system, or that Swedish hous- countries. Despite the common understanding ing policy could draw on the Finnish experience. that a Nordic welfare model was developed during Since housing policy and housing construction are the 1900s under political systems with many com- largely local responsibilities, some chapters also monalities, e.g. the central role of the local level in report local examples that may serve as inspira- urban planning, there are important differences in tion for municipalities, developers, or NGOs across housing policy strategies. In the study, Bengtsson the Nordic region. (2013) calls these differences an unsolved mys- The focus of this publication is primarily on new tery. Conceptual confusion is common in housing building for low-income and vulnerable groups, of- policy comparisons, and this is indeed the case in ten referred to in English as ‘affordable housing’, the Nordic context. The Nordic countries do not that is, housing for groups on the market’s periph- agree on the meaning of the concept of public or ery who suffer from high barriers. The financial as- social housing, they do not agree on the role of lo- pects of housing are central, especially as regards cal government in housing provision, and there are new-building costs, subsidies, social housing mod- forms of tenure with similar names but quite dif- els, and affordability. Nordic cities are segregated, ferent implications for residents, developers, and and new housing development, application of di- local governments. This means that a Nordic dis- verse forms of tenure, and housing subsidies are cussion of housing policy can be challenging. How- examples of tools that can either worsen or reduce ever, housing affordability is an issue in all Nordic segregation, depending on how they are used. The countries, as is a mismatch between the need for market seems unable, on its own, to supply enough housing and its current or anticipated availability. suitable housing for students, young people, low- Another commonality ian the Nordic region is a income groups, and newly arrived immigrants, strong housing ownership norm. Housing is con- among others. This is of political interest since it sidered a private commodity and an investment, challenges the whole idea of the Nordic welfare to a large extent, at the same time as it is a right. model, and of social cohesion and equality as char- This presents Nordic municipalities, which seek to acteristics of the Nordic region. strengthen social – inclusion, with challenges when Nordregio invited knowledgeable scholars from trying to regulate – or not – the availability and the Nordic countries to share their perspectives. appropriate location of housing. More specifically, they were asked to describe: The immediate reason for this report, and for inviting scholars knowledgeable about housing 1) the ‘market periphery’, i.e. the groups that are policy to give their perspectives on housing for the victims of high barriers to the urban housing mar- ‘market periphery’ – or affordable housing as it is ket, and often termed – is to address a recurrent question 2) current policy and/or planning initiatives aiming in the urban planning debate: Why is new-build to strengthen the position of low-income and vul- housing always too costly for the groups that re- nerable groups in the housing market:
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