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EXPLAINED: What do proposed changes to Sweden’s rental laws mean for tenants?

What do the plans to change Swedish rental laws mean for residents, and could the row over the proposals really bring down the government? The Local explains.

EXPLAINED: What do proposed changes to Sweden's rental laws mean for tenants?
The proposals would only apply to newly built apartments. Photo: Ulf Grünbaum/Imagebank.sweden.se

What’s happening?

The Left Party threatened to topple the government over planned changes to the housing system in Sweden, which would introduce market rents for newbuilds. 

After the government did not respond to the Left’s ultimatum (which gave them 48 hours to either drop the proposals or go back to the drawing board and involve the Swedish Tenants’ Union in negotiations), the party said it would begin preparing a no-confidence motion.

The only snag was that the Left don’t have enough MPs to put such a motion forward. After they said they would not put the motion forward together with the far-right Sweden Democrats, the latter party — which does have the required number of MPs — said it would submit the motion on its own.

So that’s where we stand now, with the government said to face a vote of no confidence next week, unless the parties come to an agreement before then.

What are the rental laws up for debate?

Sweden currently has fairly strict regulations on renting.

One of the rules is that landlords may only charge a “reasonable rent” (skälig hyra) rather than choosing the price they set. This applies both to people who rent directly from property owners on a so-called first-hand contract, and to people who sublet apartments that they rent or own. In the latter case, they may charge a bit more than their own direct costs, but only to cover bills and services or any furniture included in the rental, and in the case of people who own the property, four percent may be added to cover the cost of capital.

What are market rents and how would the government’s plans work?

Market rents are the opposite system to what’s currently in place in Sweden: landlords would be free to choose the price they set based on the market; in other words, based on demand.

The government’s plan would only apply to newbuilds, so previously constructed apartments would not be affected.

One of the planned changes is that location would play a bigger part in setting the price, so that housing in popular areas would go up in price. Rent would also rise each year in line with inflation.

Early in June, the government presented the results from a review into market rents, which had the stated aim of creating “a model that contributes to a long-term well-functioning rental market and efficient utilisation of the current stock”.

Why are market rents on the table?

The proposal is part of the so-called January Agreement between the ruling Social Democrat-Green government and the Centre and Liberal parties. 

After the 2018 election left neither of Sweden’s traditional political blocs with a clear majority, the government was forced to negotiate with its former opposition, and gained “passive support” from the Centre and Liberal parties. This meant that while the latter two parties are not part of the government, they agreed not to vote against the government’s formation, but in exchange they asked for significant influence on policy, resulting in the 72-point deal.

One of the points was that market rents should be introduced for newly built properties.

What are the pros and cons of each system?

The reasoning behind the current system is that it is fairer and keeps housing affordable. But caps on rental prices have also meant fewer new rental properties get built, especially smaller homes, because these are less profitable for owners.

Together with a rising population, especially in Sweden’s larger cities, this has led to a major housing shortage. Queues for first-hand rental contracts are often a decade or more, which means many people, and particularly newer arrivals to the cities, end up on second-hand contracts. In theory, these should not be much more expensive, but the huge demand for housing means people do get over-charged, and other restrictions on subletting mean these contracts can typically not last more than a year or two, creating an insecure situation for second-hand subletters.

Market rents could stimulate the production of more housing, shortening housing queues, but critics such as the Left Party and the Swedish Tenants’ Union (Hyresgästföreningen) say it will make housing more unaffordable, worsen protections for renters, and increase housing segregation.

Another concern, which was even highlighted in the government’s press conference announcing the changes, is that the new system may incentivise landlords to terminate contracts with tenants if they can find someone who will pay more, thus creating more precarious housing situations. That would be possible because rent would be set individually between landlords and tenants. The government said that “complementary proposals” would be put forward to address the concerns with the market rents.

What are the next steps?

The government will now send its proposals out for consultation, which means feedback from affected organisations will be gathered. After that, a final version would be prepared, with the aim of putting the bill to parliament in early 2022. If passed, they would then enter law from July 1st, 2022.

But before that, the government looks likely to face a no-confidence motion next week, so it remains to be seen how the outcome of that affects the planned changes. 

How would a no-confidence motion work?

In order for the vote to go to parliament, it would need at least 35 members of parliament to sign it. The Sweden Democrats said they were willing to join forces with the Left Party (which only has 27 MPs) for a no-confidence vote, but the Left has rejected their help, so the Sweden Democrats said they would submit the motion themselves.

At the time of writing this update on Friday afternoon, a majority of parliamentarians have said they’d support the motion: not just the Sweden Democrats and Left Party, but also the conservative Moderates and Christian Democrats. The latter two parties actually back market rents, but don’t support the government.

If the no-confidence goes to parliament it would need at least 175 members of parliament to vote in favour. The support of those four parties would be enough to achieve that.

Hasn’t the Left threatened to topple the government before?

Yes. The Left party are traditionally allies of the governing centre-left Social Democrats, but they were not happy about the January Agreement and the influence it gave to the two centre-right parties.

Back when the current government was being formed, the Left’s then-leader Jonas Sjöstedt was clear about his party’s new status as “the left-wing opposition”, and said they would not hesitate to bring a no-confidence motion if Löfven went ahead with reforms on for example de-regulating the housing market or workers’ rights.

Last year, the Left Party threatened a no-confidence vote over planned changes to Swedish hiring and firing laws. Ultimately, that didn’t happen because the government renewed talks with unions over the laws, and got them on board with its proposals.

The Left is in a difficult position because it aligns much more closely with the government than with the centre-right parties, but the government has moved further to the right on some of the issues that are core priorities to the Left Party.

Tune in to The Local’s new podcast, Sweden in Focus, on Saturday, as we discuss this article in more detail.

Member comments

  1. It’s strange that the new leader of the Left Party, Nooshi Dadgostar, hasn’t realised that the numbers are stacked against her. She herself has said nix to the Sweden Democrats, and there’s no way that the C, L, M and CD parties will vote with her against the government on this particular issue. So why go ahead with the threat of a no-confidence vote that is doomed from the outset? Really odd. One can understand her wanting to make her mark as the new leader, but she’s a polical featherweight compared to Löfven and Johansson and other prominent Social Democrats. She doesn’t stand a chance. Perhaps there’s an ulterior motive lurking somewhere. Will be interesting to see what happens once the 48 hours expire.

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2022 SWEDISH ELECTION

Why is Sweden’s parliamentary speaker election so important?

Sweden's parliamentary speaker is second only to the King in terms of formal rank. The prospect of a Sweden Democrat speaker taking over the role from popular Moderate Andreas Norlén has sparked debate. Here's why.

Why is Sweden's parliamentary speaker election so important?

On Monday, Sweden’s newly-elected parliament will elect a new speaker – talman in Swedish, but it’s still not clear who is likely to take over the post from Moderate Andreas Norlén, who has held the position since 2018.

How is a speaker candidate usually chosen?

There is no formal rule on how a speaker candidate is nominated, with the Social Democrats usually insisting the largest party supplies the speaker, and the Moderates arguing that the largest party in their bloc should provide the speaker.

Until now, that has meant that the Social Democrats believe the speaker should be a Social Democrat, and the Moderates believe the speaker should be a Moderate.

However, with the Sweden Democrats now the second-largest party in Sweden’s parliament, they have made claims on the speaker post, as they are now the largest party in their bloc, meaning under the Moderates’ rules, they should supply the speaker.

This has made the question of who should take over as the new speaker unusually charged.

Often – but not always, the speaker has been from the same party or bloc as the government. However, there are examples, such as in the case of Norlén, who has held the post despite there being a Social Democrat government for the last eight years, as there was a majority supporting him in parliament.

Moderate Party leader Ulf Kristersson sits down for a talk with Andreas Norlén, speaker of the Swedish parliament. Photo: Anders Wiklund / TT

How is the speaker elected?

The first time parliament meets after an election, members of parliament (MPs) decide which MP will become the parliamentary speaker and which three MPs will become the deputy speakers. These four speakers are elected in separate ballots, first the speaker, then the first deputy speaker, the second deputy speaker and the third deputy speaker.

The candidates are nominated by parliamentary party groups, after which a secret ballot is held where each MP votes anonymously. To be successful, a speaker candidate must secure a majority of votes – 175.

If no candidate secures a majority, another vote is held, where a candidate must still gain 175 or more votes to win.

If no candidate is successful, a third vote is held, where the candidate with the most votes is elected – they do not need a majority.

If the third vote ends in a tie between two candidates, lots are drawn to determine which candidate is elected speaker.

A speaker is elected for an entire election period – they cannot be removed by parliament during this period, and the role can only change hands after a new parliamentary election, which usually means that a speaker sits for four years at a time.

What does the speaker do?

The speaker – aside from being the second-highest ranking official in the country after the King – holds a prestigious position.

They do not have political influence and, if elected, must resign from their role as a member of parliament. But they have an important role to play in building a government, nominating Sweden’s new prime minister after an election and dismissing the prime minister if they lose a no-confidence vote.

Although there are checks on these powers – a new prime minister must be approved by parliament before they take power – a speaker could, theoretically, nominate four prime ministerial candidates to parliament in succession, knowing that each would lose a parliamentary vote, and thereby trigger a general election.

The speaker, currently Andreas Norlén (left) regularly welcomes foreign dignitaries alongside Sweden’s King Carl Gustaf. Here seen with King Carl Gustaf (left) and Finland’s President Sauli Niinistö (centre).
Photo: Anders Wiklund/TT

The speaker could also theoretically refuse to nominate a prime ministerial candidate despite them being the leader of the largest bloc, although this has never happened in practice.

It is also impossible for parliament to remove a speaker once they are elected, unless a new parliamentary election is held and an entire new parliament is elected, meaning that if a speaker were to misuse their powers, it would be difficult for parliament to replace them.

The speaker is the main representative of parliament, leading and planning parliamentary activities. The speaker is chairman of meetings in the parliamentary chamber and is an official representative for Sweden at home and abroad.

Why would it be controversial if the Sweden Democrats supplied the speaker?

Electing a Sweden Democrat speaker would be a win for the far-right party, as a confirmation that the party has finally been accepted into the corridors of power.

According to a source at newspaper Aftonbladet, the four parties backing Moderate Party leader Ulf Kristersson to become Sweden’s next prime minister have already agreed on stricter migration and crime policies, as well as who should be voted in as speaker of the country’s parliament when the role goes up for a vote on Monday. 

Multiple parties in the left-wing bloc have objected to a Sweden Democrat supplying the speaker, with outgoing Social Democrat Prime Minister Magdalena Andersson stating that her party is willing to collaborate with the Moderates and reelect Andreas Norlén as Sweden’s speaker instead in order to avoid a Sweden Democrat taking on the role.

Andersson said her party would be willing to “make an exception” to its principle. “We think there are arguments at this time, to have a speaker who can be appointed with very broad support in the parliament. What’s important is that it’s someone who can bring people together, either a Social Democrat or a Moderate”.

“I can state that Andreas Norlén enjoys great respect, both in the parliament, and among the Swedish people,” she said. “He has handled his duties creditably and during a turbulent time, and a problematic parliamentary situation.”

She said she was offering to discuss the issue with Kristersson to avoid the risk of a Sweden Democrat speaker, something she said would be “problematic”.

“This is a party whose whole rationale is to split rather than unite. This is also about the picture of Sweden overseas.”

Moderate Party leader Ulf Kristersson has not responded to Andersson’s comments.

Sweden Democrat former deputy speaker Björn Söder (left) and party leader Jimmie Åkesson (right). Photo: Jessica Gow//TT

There are also some MPs in the Liberal Party – who have agreed to support a Moderate-led government alongside the Sweden Democrats – who have stated they will not approve a government with Sweden Democrat ministers, and may also vote against letting them have the role of speaker.

Sweden Democrat Björn Söder, who held the role of deputy speaker between 2014-18, is a possible candidate for the far-right party. Söder is a controversial figure, having previously stated that Jewish people and Sami are “not Swedes”, leading to calls that he is not suitable for a role as a representative for all of Sweden.

Söder has also previously likened homosexuality to pedophilia and bestiality, stating in an article on the Sweden Democrats’ official online news site that “these sexual aversions are not normal and will never be normal”.

A public petition against electing Björn Söder as parliament’s new speaker had over 65,000 signatures as of September 23rd.

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