ABSTRACT
Affordable homes are in short supply in most advanced economies, despite the policymakers’ stated intentions. Evidence indicates that soaring housing prices are not caused by increased production costs but by higher land prices, and as it is the municipalities that are granted the authority to value, price, and sell off land assets, municipality agencies and the officials they employ play a key role in shaping housing markets. A study of two Swedish affordable housing developers shows that the access to “buildable land” is the single most important resource in business activities, but to value and price land is complicated for all. The developers regard the process to acquire land on the basis of the work conducted by municipality agencies, which remains opaque and is occasionally beset by difficulties. At the same time, developers are aware that municipalities act in a milieu wherein several legal and regulatory rules and political conditions need to be recognized and carefully balanced, which results in an unfortunate situation wherein the supply of affordable housing is outpaced by market demand. This results in housing welfare inequality that is measurable in a number of dimensions.
