Is renting in Sweden really as good as it’s made out to be? In short, yes!


We often hear that Scandinavian countries are eons ahead of the rest of the world when it comes to progressive social policy. It’s easy to romanticise how great life is abroad, but when it comes to renters’ rights, there’s no doubt that Australia could learn a thing or two from the Swedes.

This week we were lucky enough to have access to Stockholm University academic, Professor Sten-Ake Stenberg, who is visiting Australia as part of the Unison Housing Research collaboration with RMIT.

It’s a timely visit, given the current debate around proposed changes to rental laws in NSW and Victoria, which many fear will leave renters worse off. Although there were some good announcements by the Victorian Government in October, they remain only announcements. Not one of these announcements have been tabled in Parliament, leaving renters in limbo.

And in a case of two steps forward, two back the Andrews’ Government has committed to removing the much-maligned ‘no reason notice to vacate’ provision, but has failed to rule out introducing a stack of new reasons for breaching one’s lease, which would make evicting someone much easier and quicker.

Professor Stenberg warns us that evictions can have serious and long-lasting impacts on the health and mental health of renters, with Swedish research showing people facing the threat of eviction have increased rates of suicide, illness, homelessness and morbidity.

 

The social policy expert argues that being evicted from your home should be treated like other crises such as relationship breakdown, losing a job, or the death of a loved one.

 

 “It seems that in Australia there is a much greater power imbalance between landlords and tenants. And when you’re living in a city where there are serious housing shortages, that’s a very dangerous power imbalance.” – Professor Sten-Ake Stenberg

Every day in Australia homelessness agencies see first-hand how eviction can drastically alter the course of a person’s life. Worryingly, the rates of eviction of disadvantaged people has been increasing. Just last month, the Council to Homeless Persons released data showing that the number of people evicted into homelessness has doubled in the last five years, as the cost of rent skyrockets.

In Sweden, a tenant’s experience of renting is much better than in Australia, though Professor Stenberg warns it is no utopia.

In the 70s, in a bold political move designed to counteract a housing crisis, the Swedish Government built one million homes, and today one-quarter of Swedes live in one of these homes. Comparatively, just five per cent of Australian housing stock is public and community housing.

Despite the mighty investment, today Sweden is again facing housing shortages due to rising population, and finding a rental can be a struggle.

The key differences are twofold. Firstly, Swedish social security incomes are of a living standard, meaning that private rental is affordable even rto the unemployed. And second, tenants have much stronger legal protections, including rents negotiated by a tenants’ union rather than set by the market, leases that have no end date, and far fewer ‘legitimate reasons for eviction’. For example, in Sweden the sale of a house is not grounds for evicting the tenants; the sale must include the tenants. Imagine!

Making it easier to evict people from housing will only increase homelessness if there is a shortage of housing for them to move to. In Melbourne, someone on a Newstart income can afford just 3-in-1000 rentals. Getting into private rental and keeping it is already hard enough for many people struggling on low or irregular incomes, or who’ve experienced family breakdown, job loss or mental illness. Some of the reforms mooted will just make it even harder for people who are doing it tough to sustain their tenancy.

Some people are using scaremongering tactics to argue that landlords will retreat from the market if rental laws are strengthened in tenants’ favour. But what we are calling for in relation to protections against eviction is a relatively minor re-balancing. There is no evidence it would have any impact on landlord willingness to invest. In fact, right across Scandinavia where renters have much stronger tenant rights, they also have a greater proportions of the population in rental and a vibrant rental sector. 

Also, let’s not forget that Australia’s current housing taxation system means that landlords have plenty of incentive to be property owners thanks to generous  negative gearing and capital gains tax concessions.

It is unrealistic to think that we’re going to adopt a grab-bag of Swedish housing policies overnight, but evidence from abroad is grist to the mill in the overhaul of a system that has so much room for improvement.

Clearly a better balance needs to be struck between the rights of landlords, and ensuring there are adequate laws to protect people from losing their home. The balance in Australia is currently stacked heavily in favour of landlords. With the reform of the Rental Tenancies Act we have the opportunity to make renting fairer for tenants.