The Productivity Commission: Housing construction is hampered by complicated bureaucracy
This is a debate article. It is the writer who stands for the opinions expressed in the text, not Aftonbladet.
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DEBATE. Increased productivity creates room for higher wages, profits and tax revenues. It is therefore worrying that productivity growth in Sweden has fallen in the last decade.
If productivity is to be able to turn up, we must speed up housing construction. People must be able to move to where the jobs are. Housing shortages make it difficult for companies to recruit and slow down economic growth.
These are the conclusions of the Productivity Commission’s interim report which will be submitted on April 29.
Today’s municipal planning monopoly, i.e. the power over the use of the land, gives a lot of scope for local political decisions. Even when there is a housing shortage, municipalities can refrain from granting land for construction, even though suitable land is available. The problem is most evident in larger metropolitan regions, where the labor market is regional rather than local.
Change is needed here. More buildable land can lower land prices and make more housing projects profitable. Then more homes can be built.
The Productivity Commission therefore proposes a review of the planning monopoly with a focus on taking greater account of the socio-economic values and tightening the requirement on the municipalities to enable more housing.
Housing construction is also hampered by cumbersome bureaucracy and inefficient administration. The regulations have become extremely complex in parts. It is a system filled with exceptions and exceptions to the exceptions.
This discourages investment and innovation. Long lead times for planning and building permit processes have become even longer, and the wider societal benefit has been lost along the way.
One reason is considered to be that the regulations have changed with too much emphasis on special interests and particular perspectives. Too little consideration has been given to how the rules affect efficiency, construction volumes and, by extension, functioning labor markets and growth.
The problem is by no means new, but well known. However, the will and ability to implement the necessary reforms has been lacking.
The regulations surrounding the construction and housing market cannot now be patched and fixed further. A major overhaul is needed.
The Productivity Commission therefore proposes a comprehensive review of the housing market’s regulations. The aim is to improve the conditions for new construction and thus more, cheaper and better housing.
The review needs to include both the regulations for physical planning and the rules for housing construction itself, including environmental issues. Inspiration can be drawn from the working method of the comprehensive tax reform in the early 1990s.
A first step is for the government to put forward a target and orientation proposal that sets out a clear direction.
Regulatory changes and structural measures are required for simpler and more industrial construction. Which increases access to buildable land and ensures that the same building regulations apply throughout the country.
One way to quickly increase the availability of buildable land is to allow existing plots of land intended for residential purposes to be built on and for more construction to be exempt from planning permission. The commission also proposes free rental in new production, with clearer protection for landlord and tenant compared to previous proposals.
In addition, a sustainable, more flexible beach protection is proposed which makes it possible to build in more places while protecting free access to the beach and important environmental values. Furthermore, more effective and efficient working methods need to be developed in the public sector and the exercise of authority.
Sweden’s housing market needs a comprehensive review to strengthen our future prosperity.
Hans Lindblad, chairman of the Productivity Commission, file. Dr. and former Director of National Debt
Christian Seth, principal secretary in the Productivity Commission
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