“How can we increase housing construction tenfold?”

High interest rates, inflation and war have slowed down housing construction. At the same time, the need for new housing in Norrbotten is enormous. We cannot influence interest rates, inflation or war – but what can we actually influence? On June 1, a wide range of stakeholders gathered to discuss and identify concrete initiatives that can make a difference.

It was Region Norrbotten through the North Sweden Green Deal project, together with the industry organizations Fastighetsägarna and Byggföretagen, who invited people to the Power Gathering for increased housing construction in Norrbotten in Luleå.

- Housing is closely linked to the supply of skills. How can we increase housing construction tenfold? Think big and think creatively, said Erik Ranängen, industry and association manager for Norrbotten at Byggföretagen, in the introduction.

Moderator Britta Flinkfeldt drew a background where eight out of fourteen municipalities in Norrbotten already have a housing shortage today – before the major investments are in place, and in places that do not have major investments underway. One problem is that historical data on population development shows reduced needs, not the population growth required to realize the green transition.

“I don’t understand the development here”

This is a problem that Lena Segerlund, CEO of Invest in Norrbotten, linked to. The organization has not previously worked with investments in housing, but has decided to step in and contribute its marketing expertise.

- "There is a lot of knowledge to build here. Outside of Norrbotten, people don't understand the development here, the size and the long-term perspective. We can help spread that image," she said.

As an example of facts that need to be disseminated, she mentions that the average return on property investments in northern Sweden 2010-2021 has been higher than in Greater Stockholm.

David Sundström, Business Manager Sweden at Lindbäcks Bygg, called for new models for distributing risks between property developers and municipalities. This could, for example, involve leasing land with a ground lease.

- 30 percent of the cost is land and foundations. You do it early, it takes time to get a return on it and it can't be moved. If we can share the risk, we can go further. Can the land be changed to a leasehold? We work far too little with leaseholds, he said.

Sundström also highlighted the impact of entrepreneur housing on the housing market and wanted to see measures to ensure that the short-term needs of entrepreneurs and the long-term needs of society work together.

- Can we build for today's entrepreneurs and tomorrow's families?

Can Tiny Home Villages Attract Young People?

Daniel Kangas, project coordinator at Kiruna väkser, presented an early concept study for villages of "Tiny Homes" to attract young adults, eager for a few years of nature experiences and adventures.

- Tiny Homes means a lifestyle close to nature, a little simpler. It does not place the same demands on a high monthly salary. The target group is the mobile young group who have a leisure interest and an interest in nature, they are interesting to attract to Norrbotten. We can offer an adventure, then you never know what will happen. They can fall in love with a partner, in the landscape, in the job, he said.

The vision is 3-4 villages of 40 Tiny Homes in each municipality. This would provide about 2000 homes. Each village has a common building with areas for socializing. It can include a sauna, laundry room, mini-shop, breakfast room, pool table and horse stable.

- The risk is taken by the private individual who buys a Tiny Home. We can also consider hire purchase or private leasing. What is needed are tiny house builders and lenders so that it can be packaged.

Maria Adlers, CEO of Pitebo, talked about how the municipal company corrected rents in a residential area with 60s houses, which were set too low in relation to corresponding standards in the private sector. She highlighted how increased rents in existing stock benefit new production.

- There will be consequences if you have too low levels in the old stock. A much smaller target group can consider new production if there are older apartments with lower rents. That is usually not good for investments at all. New production is also part of our mission and we need to create resources for it. This is the municipality's best contribution to new production, to raise rents in public utilities, she said.

Frida Berglund, community development strategist at Luleå Municipality, spoke about the importance of municipalities reviewing their internal processes and being able to streamline lead times. If they can facilitate and reduce the costs of housing construction, they will become more attractive to investors.

- Be more prepared to work in parallel processes. How much time can be saved between process steps?

Many ideas and suggestions

Around 50 representatives of the construction and real estate industry in Norrbotten, municipalities in Norrbotten and other stakeholders with interests in the issue participated in the discussion. Here is a summary of the proposals that were put forward.

• Build housing for the elderly to start a relocation chain.
• Build houses that can be moved if the market declines to reduce risk.
• Make credible population projections that take into account our development.
• There is local capital from entrepreneurs who have sold their companies at a good profit. Can they be convinced to invest the capital in housing in Norrbotten?
• Produce good marketing materials with well-founded facts for potential housing investors.
• Investigate whether there are ways to obtain external funding from, for example, the EU to achieve housing construction.
• It is important that we plan for the right type of housing that is attractive to new residents and existing residents of Norrbotten. For example, villas and housing types with shared functions that can create added value.
• Think about book quality, not just book quantity. We need to be able to offer something extra. The rooms between the buildings are also important.
• Create greater regional support for housing construction, for example via a regional community development consortium that includes large industrial companies.
• Create flexible detailed plans to cut costs and increase investment willingness. Early stage dialogue between property developers and the municipality.

Several of the participants expressed their joy at the initiative and wished for a continuation with even more actors, as representatives of the companies behind the major investments. Erik Ranängen concluded with a reminder to look positively at the challenges despite everything.

- We live in the best of places in the best of times. Oh, how we build other things, while they down south have meetings about how they give notice and lay off. Take advantage of the investments, we are in the best position in the world but we have to roll up our sleeves and do something serious going forward, were the final words from Erik Ranängen, Byggföretagen.

Text: Sara Stylbäck Vesa

The North Sweden Green Deal is an initiative to realize a sustainable societal transition, in the wake of the new industrial establishments.

The project is run by Region Norrbotten and Region Västerbotten together with a number of other actors. It is financed by the European Regional Development Fund (ERDF).