Danish lawmakers are expected to pass a law today that lets 18 municipalities, including Copenhagen, build public housing above the current cost ceiling. Copenhagen says the change makes up to 5,000 new almene boliger possible before 2032.
The new rules are being adopted at Christiansborg on Thursday, DR reports. Municipalities with particularly high housing prices will be allowed to exceed the maximum construction price for public housing by a total of 20 percent.
Copenhagen’s Lord Mayor Sisse Marie Welling of SF told DR the effect will be substantial. According to Welling, the city can now build up to 5,000 almene boliger before 2032, and she said the city desperately lacks homes.
Why construction stalled
To keep rents in public housing down, Danish rules set a maximum amount for what it may cost to build the units. In Copenhagen it has been close to impossible in recent years to stay below that ceiling, because land prices are high and construction costs have risen sharply. As a result, construction of new public housing has more or less come to a halt.
Part of the bill for exceeding the maximum amount will end up in residents’ rent, which forms a large share of the cost of living in Denmark. Municipalities also gain the option of granting a loan that carries no interest and no repayments. Per DR, such a loan must first be paid back after 50 years.
Welling said it matters that the municipality helps out so the capital remains a mixed city. She confirmed to DR that Copenhagen intends to use the new option.
Experts point to a large backlog
Rikke Skovgaard Nielsen, a housing researcher at Aalborg University, said the law has potential because it will increase the supply of affordable homes. She added that it cannot be said to solve the housing crisis in the capital.
Curt Liliegreen, director of Boligøkonomisk Videnscenter, estimates that Copenhagen has a backlog on the order of 30,000 homes. As noted by Liliegreen, the city’s population is still growing, so catching up will take time.
Liliegreen also said the new public housing will be markedly cheaper than private rental homes. If Copenhagen is to be a city where all income groups can live, he described the change as much needed.
Nielsen questioned whether new construction alone secures a mixed city. According to the researcher, it depends on who moves in, and in public housing that is decided by the waiting list. As the system works today, she said, it is not necessarily those with the fewest means who end up in new affordable homes.
The law is set to take effect next week.
