The Effect of EU-Legislation on Rental Systems in Sweden and the Netherlands

Both Sweden and the Netherlands had housing systems that include broad models of municipal housing (Sweden) or social housing (Netherlands). These broad models, however, came under discussion due to the competition policy of the European Commission. Financial government support – state aid – for public or social housing is considered to create false competition with commercial landlords. The countries chose different ways out of this problem. The Netherlands choose to direct state aid to a specified target group and had to introduce income limits for dwellings owned by housing associations. Sweden instead chose to change the law regulating municipal housing companies and demands that these companies should act in a ‘businesslike way’ and with that aims to create a level playing field. This paper will describe why the two countries chose different options, the development during the first years, and also speculate about the consequences on the longer run and the future role of the public/social housing sector in housing and urban policy.