Swedish rental policy—a complex superstructure with cracking foundations

The complex Swedish use-value system of rentsetting has attracted considerable international attention, but seldom been altogether understood. After 25 years, the system is now being threatened from two directions. Politically, right-wing critics claim that use-value rents are too rigid and should be replaced by market rents. According to a recent Government evaluation, the use-value system has worked quite satisfactorily when measured against political goals, but the controversial issues of freedom of contract and efficiency were never really addressed in the evaluation (Ministry of Finance, 1992). Nevertheless, the new rental legislation that the non-socialist Government is now preparing will, by all appearances, mean only a minor modification of the existing system. Such minor amendments in the law represent a less serious threat to the use-value system than the cracks that are now beginning to show in its implementation. The price-leading role of the non-profit municipal housing companies (MHCs) has been the institutional mainstay of the rental policy, but those companies now seem to be entering a process of privatization and market orientation. In this note I will first describe the goals and implementation mechanisms of the use-value system,1 and then go on to discuss what effects the development of the MHCs may have on the future implementation of the rental policy.