According to the building industry, it is impossible not to lose money when building student housing. Despite this, there is suddenly a building boom in Lund, led by a couple of nations.
During 2010, 125 student flats were built. Altogether. Nationwide. Now, three years on, the amount of student housing built only in Lund has increased many times over. The reason seems unclear. We are still facing a grave recession and despite pressure no considerable state aid has been made in order to stimulate building.
According to a report made by the Swedish Union of Tenants in 2010, 57 000 of 300 000 students nationwide lack housing. 27 000 reluctantly live with their parents.
However, the building industry claims that it is too expensive to build housing aimed for students. And their arguments are strong.
When the lack of student accommodation was under heavy discussion, in 2011, the Social Democrats suggested aimed subventions for student flats to compensate the settled investment support for production of new projects. AF Bostäder‘s CEO Rolf Svensson and others on corresponding positions in the rest of Sweden, advocate in the newspaper Svenska Dagbladet a change in the municipal property tax and an implementation of a new funding for new projects.
Details meant to simplify
Minister for Public Administration and Housing, Stefan Attefall, would rather solve the problem by adjusting the details.
“We are now continually looking over the regulations, trying to get rid of more red tape that makes the building process both slower and more expensive”, he says in a parliamentary debate as discussion is at its height.
In practice, we are given two measures. One: The Swedish National Board of Housing, Boverket, will investigate possible improvements. Two: As of the turn of the year 12/13, it will be easier for people subletting their flats to decide the rent themselves.
Neither investing support nor subventions, at least not for now.
Lund nation’s probations
Summer 2012, and Paul Pierce is supposed to be on holiday from his post as teacher at the institution for informatics at Lund University. Nevertheless, he’s finding it hard to let go of his work entirely, and makes daily calls to the county administrative board. As a former curator at Lund Nation and a present CEO at their housing company, he is very eager to hear in what direction they are heading concerning the future of Landsarkivet, the neo-brutal building at the crossing Arkivgatan and Dalbyvägen. Two years earlier, Lund Nation’s company bought the building hoping to be able to build flats there. Politicians, the county administrative board (Länsstyrelsen), the University and Boverket, give thumbs up while 1,000 architects give their Facebook thumbs down. They mean that the listed building is unique and must be preserved, and hope that Länsstyrelsen will listen to them.
But they don’t listen. The nation’s plans are made with respect to the building, adding to the importance of their purposes, that it exceeds the building’s historical value, reads Länsstyrelsen’s final resolution, which the eager Paul Pierce receives right in the middle of his holiday. When the building permit is accepted, he and the rest of the board celebrate at the newly opened French restaurant Les Halles at Lunds Saluhall.
Neither profit nor loss
But how does the Nation manage to build when no-one else does, not to mention in a licensed building in central Lund? According to Paul Pierce, you come a long way just by doing your homework properly.
“Since we embarked on planning these houses we have re-done the plans at least five times. It is probably exactly that pre-stage work that makes us stand out amongst the others, and has made possible lowering the cost”, says Paul Pierce.
Experts that Lundagård have been in touch with calculate that leasehold estates usually cost 30,000 SEK/square metre when built, and even more if it is small flats like student accommodation. But Paul Pierce asserts that the project at Landsarkivet might lower the expenses to around 20,000. However, the important issue when it comes to the be or not to be of the new flats, has rather to do with the intensions behind them.
“This project, when all is said and done, will result in neither profit nor loss. It all becomes explicit, that if you are not an operator like us, this is not a very good way of investing your money. You must look far into the future in order to conceive it a good idea to build leasehold estates in Sweden, since it will yield very little. However, it is definitely manageable.
If one builds, they all build
To Lund Nation, the resolution to build was no rush job. For almost a decade, the nation has searched for suitable ground. But right after the building permit was given, Sydsvenskan was filled with news about other housing plans. In September, Helsingkrona put their shovels to the ground as they commence a 94 million project that is supposed to result in a thirteen-floor house for 150 people. Also AFB have plans on a hundred flats per year from now on.
“In this town nothing has happened for 20 years. Since our plans became visible in the media, then suddenly AFB, LKF (the municipality housing company ed.note) and all possible other companies are following too”, says Paul Pierce and means that several operators probably have got up speed after the Nation took the lead.
“It becomes obvious, that when a nation, that in reality might have the worst economy of all, can build, then everybody else can do it too.”
Translation: Anna Bergvall