Predatory commodification and housing renovation

ABSTRACT

This study explores the renovation of housing governed by two tenure forms in Sweden, rental and cooperative housing. Based on a relational approach, we argue that despite requiring a similar need of maintenance at regular intervals, renovation in rental housing takes a substantially different form compared to cooperatives, regarding the extent of the work, the involvement of, and the outcome for, the residents. With the concept of predatory housing commodification, we aim at examining how the process of housing renovation is organized, what driving forces motivate renovations, along with how it impacts affected residents. Our contribution is twofold: firstly, we conceptualize renovation of housing as a commodifying process, within the realm of financialization, most often carried out brutally and contributing to housing inequality; secondly, our contribution is empirical as it covers housing renovation from a relational and contrasting perspective in a field that is still under-studied in the Scandinavian context.

KEYWORDS:

• Housing
• affordable housing
• inequality
• predatory commodification
• renovation
• Sweden

Introduction

Since 2013, 315,000 rental dwellings in Sweden have been undergoing a particular form of renovation, leading to skyrocketing rents, intensified segregation, and displacement, while approximately 155,000 housing units remain to undergo renovation processes (Brinkhagen et al., 2019). These processes have primarily occurred in poor and stigmatized neighborhoods, creating severe consequences for tenants in the rental stock, which houses about one third of the Swedish population, as skyrocketing rents have increased displacement and segregation (Boverket, 2014; Mangold, 2016). Previous studies indicate that economic factors, communication, participation, scope, and quality are contested topics in these processes (Baeten et al., 2017; Polanska & Richard, 2019; Westin, 2011). Though some important work has been done, this research field urgently needs scrutiny in view of ongoing renoviction (i.e., renovation leading to an eviction) processes in Sweden, the severe social effects of displacement and increasing housing segregation in Sweden, and the lack of regulatory policies (Baeten & Listerborn, 2015; Pull, 2020; Westin, 2011). Whereas some recent studies have examined renovation in the rental housing market, the lack of a systematic overview of cooperative housing renewal in Sweden merits urgent attention. To our knowledge, no comprehensive research has been performed, even though this type of tenure applies to almost a quarter of the housing stock (SCB, 2019). Some works have cited the particularities of Swedish cooperative housing (Anund Vogel et al., 2016; Bengtsson, 1992; Molina, 2000; Ruonavaara, 2005; Sørvoll, 2014¸ Sørvoll & Bengtsson, 2018), but we lack research on the practice of renovation in cooperatives.

This study examines the renovation of multifamily housing governed by two tenure forms, cooperative and rental. The Swedish post-welfare context is crucial for understanding what we call predatory housing commodification, contributing to tenure inequality and housing financialization in Sweden. Our approach to studying housing renovation is relational, based on qualitative research methods addressing structural renovation processes in multifamily housing in several neighborhoods in Stockholm and Uppsala.

Our work makes three contributions. First, we conceptualize the ongoing renovation of multifamily housing as predatory—a commodifying process that contributes to tenure inequality and housing financialization. Its predatory character refers to the relational and exploitative dimensions of the process, whereby practices and logics in one field affect practices, logics, and values in another. We thus compare two forms of renovations in multifamily housing, i.e., renovations in cooperatives, respecting the preferences of residents, and renovations in rental housing primarily driven by profit-making. Our focus is on how this process produces tenure inequality. For residents, the main difference, as we show, is marked by the rights to remain in their homes after renovation and to exert influence over the process. Second, our contribution is empirical, covering multifamily housing renovation from a relational and contrasting perspective in an understudied field in the Scandinavian context. Third, we make a point in demonstrating, by contrasting these two forms of renovations, that alternatives to predatory renovations are possible.

In the first section of our article, we introduce the reader to our theoretical approach where the relational approach to rented and owner-occupied housing is connected to the processes of housing commodification and financialization. Next, we present previous studies of rental and cooperative housing in Sweden, followed by a section on methods and material. This is followed by an analysis of the renovation of housing of both tenure types. We study how communication and participation are organized, the interests central to the process, and the economic outcomes for residents of renovated housing. We conclude by noting several important differences in housing renovation practices involved in the accelerating “financialization of home” (Aalbers, 2008) and the consequent growing housing inequality (Christophers, 2021) in terms of affordability, quality, and temporal sustainability.

Expanding commodification of housing

Housing production encompasses construction, demolition, and renewal, interrelated aspects that “all form part of a balanced housing policy” (Watson & Turkington, 2015, p. 2). Renovation of the older housing stock is central to housing production, especially given a shortage of good-quality affordable housing, a characteristic of European countries in the 21st century (Watson & Turkington, 2015). When approaching housing from a relational perspective, it is important to look at the ongoing process of “accumulation based upon predation, fraud, and violence” (Harvey, 2004, p. 74). By analyzing different types of housing tenancy (e.g., homeownership and rental) we include both those affected by what Harvey (2004) called accumulation by dispossession, and those benefitting from such exploitation in the housing sector. According to Harvey (2004), accumulation by dispossession includes appropriation, exploitation, privatization, commodification, and property rights conversion to protect private property owners. On a global scale, homes have increasingly become commodified as the housing sector has undergone a global process of financialization, and as societies have abandoned “the notion of housing as a social good” (Rolnik, 2019, p. 5). In the process of transforming homes into financial assets, the homeownership model has been prevalent, deepening the crisis of tenure insecurity and spurring massive displacement.

This shift in the meaning and function of housing encompasses processes of maintenance and renovation that tend to increase the exchange value of housing. Housing is a central component of the commodification of urban spaces (Madden & Marcuse, 2016). It has been commodified and is the medium for the expansion of commodification (Brenner et al., 2009). In recent decades, researchers have recorded various commodification trends, those spurring the financialization of housing and real estate (Aalbers, 2008; Chatterjee, 2014; Rolnik, 2019), those enclosing commons and public land (Christophers, 2018), and those of the privatization of public space and gentrification (Davidson, 2009; Kohn, 2016).

We conceptualize the ongoing process of multifamily housing renovation in Sweden as a predatory form of housing commodification, referring to changes in the role housing plays for individuals and societies, and to how its provision and management are organized. Financialization refers to “the increasing role of financial motives, financial markets, financial actors, and financial institutions in the operation of the domestic and international economies” (Epstein, 2005, p. 3) and to how these factors concern the home (Fuller, 2021). The renovation of housing as a commodifying process refers to the dynamics inherent in capitalism, supported actively by the state (Paton, 2014), that transform the meaning of homes and make them into financial assets, with real estate, homeownership, and property becoming central to capital accumulation (Aalbers, 2008, 2017; Chatterjee, 2014; Harvey, 2004; Rolnik, 2019; Roy, 2017). In this process the role of the state is pivotal in facilitating big capital to act freely in a commodified housing sector. We argue that the commodification process permeates how renovation is organized and carried out, and the market-based logics driving it, while the outcomes for most tenants affected by renovation are devastating.

One needs to consider the development of the rental housing markets in the context of the housing marketization and financialization that has occurred worldwide over the past 4 decades (Rolnik, 2019). Rolnik has demonstrated that homeownership growth cannot be analyzed separately from the rental sector. Her approach to tenure insecurity, weakening tenants’ rights, and the closely related advance of the real estate financial system guides our work. Earlier, Davis (1990) had asserted that to understand housing inequality, one must look at prosperous homeowners and their capacity to use their privileged position to manage political negotiations in their favor. Also, Dickens et al. (1985) argued for the necessity to look at all forms of tenancy and all parts of the housing provision process when trying to understand different housing regimes.

Additionally, Christophers, (2021, p. 576) citing Ball (2010), has argued that there has been a false divide—material and discursive—between studies of rental housing and of owner-occupation. The separation of these two research streams has neglected the spillover effects and relationships between these tenure types in housing transformation. Changing dynamics in the financialization of rental housing (Aalbers, 2008, 2017; Gil García & Martínez López, 2021) are intertwined with the changing political and economic dynamics of owner-occupancy. While the rental sector has historically been disadvantaged by housing policies, homeownership is subsidized, facilitated, and idealized (Christophers, 2021, p. 576; see also, Rolnik, 2019; Ronald, 2008).

Inspired by Christophers (2021) call for a relational perspective on housing, we conceptualize processes of multifamily housing renovation in the two cities as resulting from the ongoing housing commodification that is contributing to tenure inequality. We call this process predatory housing commodification. Its predatory character is expressed in terms of “pushing people out” (Sassen, 2014, p. 77), creating ruptures, displacement, and the impoverishment of some people, while others profit from it. It is a relational process based on exploitation and complicit state policy (Rolnik, 2019), affecting various groups differently, but with connected effects. We argue that housing renovation practices and logics in one field affect the practices, logics, and values in another, and our focus concerns how these processes produce tenure inequality and unequal effects for different groups of residents.

We argue that the brutality of ongoing rental housing renovation includes how the process is designed and carried out, as well as who profits from and pays for it. For renters, as Rannila (2021) has suggested, renovation is a form of slow and discreet housing violence taking specific form in a post-welfare context, in which welfare-state narratives penetrate all forms of resistance. Post-welfare refers to the decentralization of the state’s responsibility for welfare provision and the increasing role of the private market in that provision in the last 3 decades (Baeten et al., 2015, p. 209). In this analysis, however, we are not tracing housing policy changes or the makings of housing finance on a macro level. Instead, we are focusing on how the actual process of renovation in different forms of tenure emerges as a process of extended commodification of housing as a result of financialization. We show that a market-driven logic and financial motives are central to the owners, whether these are the dwellers themselves or corporate landlords, thus becoming a medium for expanding commodification (Brenner et al., 2009).

Tenure inequality and renovation: The Swedish case

Housing was central to the construction of the welfare state in all Scandinavian countries throughout the 20th century, despite considerable institutional differences in housing provision and organization at the national level (Bengtsson, 2013). The Swedish model, which emerged in the 1930s, aiming for universal housing provision and the state’s equal treatment of all tenure forms, played an important role during the “welfare decades” in the country (Dickens et al., 1985; Elander, 1991; Grundström & Molina, 2016). Despite the intended tenure neutrality in Sweden, rental housing has, discursively and materially, primarily been for the working class and, increasingly, for parts of the population racialized as non-Swedish (Grundström & Molina, 2016; Molina, 2018).

The current Swedish housing provision model is based on three main tenure forms: homeownership, rentership, and cooperative/owner-occupation (see, Figure 1). In this article, rental housing and cooperative housing in urban areas are under scrutiny. In Sweden, rental housing can be owned by either private or public (i.e., municipal) landlords, whereas cooperative housing can be regarded as in-between renting and owning (Bengtsson, 1992; Grundström & Molina, 2016; Molina, 2000; Sørvoll, 2014). In cooperative housing, the dweller buys the user right to an apartment or house (usually financed by bank loans) and pays a monthly fee for common expenses, usually including services (e.g., common area cleaning and garden and yard maintenance), board member remuneration, and structural maintenance/renovation. The buying and selling of cooperative apartments are managed by the previous and prospective dwellers (and is therefore not a matter for the cooperative board), and the seller also retains any financial gains (or losses) from the sale. Importantly, the owner of a cooperative unit is responsible for the upkeep of interior surfaces, while the cooperative board is responsible for structural maintenance, for example, of the roof, façade, ventilation system, and plumbing. This shared responsibility included in the monthly fee is the most important difference between cooperative housing and homeownership. Cooperative housing is therefore best perceived as a hybrid form combining market elements with collective and democratic management (Ruonavaara, 2005). The increasing commodification of cooperative housing was primarily set in motion by the abolition of price regulations in 1968 (Sørvoll & Bengtsson, 2018).

Figure 1. Distribution by tenure types in Sweden in 2018.

Source: Boverket, 2019.

Christophers (2021) has argued that ideological and economic inequalities are rooted in the emergence of significant and growing inequalities in housing tenure form. He further argues that such processes are policy driven and claims that neglecting the relationality of owning and renting limits the possibility of “addressing this through progressive policy responses” (Christophers, 2021, p. 573). Guided by Christophers, we include rental and ownership-based housing in our study, paying special attention to affordability and tenants’ opportunities to remain in their homes after renovation. The commodification of Swedish housing is especially brutal regarding the renovation of rental housing, impacting stigmatized neighborhoods especially hard, not only resulting in displacement, dispossession, and impoverishment (Baeten et al., 2017; Polanska & Richard, 2019; Pull & Richard, 2019; Westin, 2011), but also widening the ideological gap between the two tenancy forms, with the already dominant view of homeownership as the prime tenancy form being further normalized by the way renovations are conducted. In cooperative housing, ongoing renovation processes are less brutal, as this tenancy form is already commodified and has come to resemble the ideologically prime homeownership form of living (Ruonavaara, 2005; Sørvoll & Bengtsson, 2018), reflecting the combined principles of good household investment and household economic rationality. In contrast to the brutality of renovations in rental neighborhoods, owner/occupier associations keep the costs of needed renovations low to maintain the stability of capital investment for the residents—the best possible renovation at the lowest possible cost. However, as we demonstrate, these renovations are permeated by market-driven logic and thus work as a medium for expanding commodification as well (Brenner et al., 2009).

Moreover, we are interested in the democratic and economic dimensions of renovation practices, considering who gains from them and who has a say in making decisions and setting priorities. The right to decent and affordable housing as a pivotal aspect of fair urban development guides our study.

Public housing companies have historically played an important role in the Swedish housing system by balancing the housing market, but their norm-setting position has been severely weakened in the past 3–4 decades (Grander, 2018). In the wake of housing market deregulation, tenure neutrality has suffered and residential segregation has increased (Grundström & Molina, 2016; Hedin et al., 2012). The financialization of housing, especially notable since the 2000s, has helped strengthen these processes (Lundberg & Waldenström, 2017). The growing exchange values of apartments along with the increasing shares of wealth held by upper-income brackets since the financial crisis of 2008 have caused researchers to conclude “that it is largely on the housing market—houses are a typical upper middle-class asset—that we detect the main driver of increased inequality” (Lundberg & Waldenström, 2017, p. 519). In line with Kohl’s (2021, p. 414) analysis, in Sweden “the increasing financialization of housing provision through nonfinancial firms, the state and private households, has led to constellations of mortgage growth without additional construction, such as the privatization of state housing and the supply restrictions caused by rentier strategies of housing-market insiders and private developers.” As Christophers (2021) has argued, these processes have not only contributed to a widening gap between rental and owner-occupied housing and tenure inequality in the country from a material perspective, but are also intertwined with an increased denigration of rental housing as a tenure form.

Rental housing and cooperative housing are not evenly distributed among the population. Simply put, while rental housing has become the main tenure type for the low-income and racialized-as-different parts of the population, cooperative housing is the main tenure type for the White working and middle classes. Private ownership, mostly of detached housing units (e.g., villas and bungalows), is reserved primarily for the upper-middle and affluent classes in cities (Grundström & Molina, 2016). Structures of racialization have resulted in ethnic and class-based divisions, and upper-class neighborhoods are home to not just affluent but also generally White Swedes (Andersson & Molina, 2003; Bråmå & Andersson, 2010). In turn, low-income neighborhoods, where rental housing dominates, are strongly stigmatized by the media, depicted as problematic, non-Swedish, and dangerous (Backvall, 2019).

While those living in cooperatives have seen their wealth grow, those in rental housing have become impoverished and seen their neighborhoods stigmatized. The commodification of housing, seen as a process by which housing becomes an asset for the owners and central to capital accumulation, has also affected the rental sector. Public housing companies were put under economic pressure by changes in tax regulations in the 1990s, and by the parallel decentralization of financial responsibility for housing from the state to the municipal level (Gustafsson, 2019; Turner, 1997). These regulations undermined the previously crucial postwar role of municipal housing companies in meeting national aspirations for tenure neutrality and decent housing provision for all. Changes permitting the conversion of rental to cooperative housing have generated a wave of privatizations (Andersson & Turner, 2014; Wimark et al., 2019). On top of that, a national law 2011 stating that municipal housing should be run according to “business-like principles” has weakened their nonprofit character (Grander, 2018), and sales of public housing to private corporations have since increased (Gustafsson, 2019). In addition, current housing shortages experienced in the two studied cities and many Swedish municipalities have resulted in new forms of temporary and highly profitable housing business: apartment hotels and expensive subletting solutions. However, some regulation remains: the national rent-setting system is officially regulated according to a corporate model based on use-value, and the Tenants’ Union negotiates rents with the landlords, aiming to protect tenants from steep rent increases. There is, however, a loophole in the legal framework that allows for high rent increases: if the quality standard of the apartment is increased significantly through renovation, the current use-value framework allows for rent increases of 60% or higher (Polanska & Axén, 2021; Westin, 2011). This loophole in the rent-setting system in Sweden is pivotal, as it allows for steeply rent-raising renovations and spurs the commodification of rental housing in the country.

Methods and material

The empirical material of our study consists of interviews, and document analysis of primary and secondary data sources. In 2019–2020, we conducted 35 interviews in the cities of Stockholm and Uppsala with tenants in public and private rental housing, residents of housing cooperatives, public housing company representatives, and representatives of the Tenants’ Union and of national cooperative organizations. We also studied official documents, reports, and statistics relevant to the topic of interest. We are aware of potential regional and urban–rural differences in how housing commodification plays out through renovation in different locations. By focusing on Uppsala and Stockholm we illustrate housing commodification through the ongoing process of housing renovation in metropolitan areas, with relatively high housing segregation and vast socioeconomic inequalities.

Stockholm’s multifamily housing stock consists of 43% of units which are rental apartments (public and private) and 57% which are cooperatives; the corresponding proportions for Uppsala are 37% rental and 63% cooperative dwellings (SCB, 2019). Our interview material with tenants in rental housing covers six neighborhoods—three in each city—that have undergone or were undergoing housing renovation. The neighborhoods were selected according to their location in the city (inner and outer suburbs), their socioeconomic composition, and tenure composition (including differing shares of public and private rental housing as well as cooperatives) (see, Table 1). The interviews with cooperative housing residents targeted seven neighborhoods in Uppsala, following the same selection criteria: two cooperatives were located in the inner city and the rest in various neighborhoods outside the city center reflecting diverse socioeconomic and tenure compositions (see, Table 2). All interviews were concerned about how information about upcoming renovations is disseminated, who has a say in renovation planning, how renovations are organized and financed, and what logics drive them. The interviewees were selected based on their involvement in the issue of housing renovation: in rental housing, we selected residents organized in the Tenants’ Union and representatives of housing companies; in cooperatives, we selected board members of the housing associations.

Table 1. Characteristics of the neighborhoods included in our study of rental housing.

City	ID	Calculated rent increase	Average yearly income, 2019 (SEK)	Housing, % rental: whereof % public & % private	Built in
Stockholm	S1	45%	254,000	80%: 26% & 74%	1965
Stockholm	S2	25–37%	226,600	82%: 58% & 42%	1975
Stockholm	S3	34–57%	366,300	31%: 45% & 55%	1961
Uppsala	U1	23–46%	223,000	56%: 0% & 100%	1965–1968
Uppsala	U2	30–60%	253,000	94%: 23% & 77%	1945
Uppsala	U3	25–70%	231,000	55%: 76% & 24%	1957

Table 2. Characteristics of the neighborhoods included in our study of cooperative housing.

City	ID	Calculated fee increase	Average yearly income, 2019 (SEK)	Housing, % rental/ % coop	No. units in coop	Built in
Uppsala	C1	24%	231,000	47/49	81	1964
Uppsala	C1	<10%	231,000	47/49	119	1947
Uppsala	C1	<10%	231,000	55/45	116	1957
Uppsala	C2	<10%	282,000	37/62	36	1935
Uppsala	C2	<10%	282,000	37/62	51	1934
Uppsala	C3	20–30%	253,000	56/39	60	1958–1959
Uppsala	C3	<10%	253,000	56/39	59	1958
Uppsala	C4	<10%	245,000	26/74	396	1965
Uppsala	C5	<10%	161,000	81/11	96	1978
Uppsala	C6	<10%	223,000	56/44	178	1963
Uppsala	C6	<10%	223,000	60/39	330	1964–1965
Uppsala	C7	<10%	310,000	19/53	316	1972

This work has been developed within the project “Displacement and renoviction in housing renewal processes in Sweden—an intersectional feminist perspective,” led by Irene Molina and financed by Formas, the Swedish Research Council for Sustainable Development (2018–00061). Personal data has been handled in accordance with the EU General Data Protection Regulation (2016/679) GDPR and the code of conduct for good research practice of the Swedish Research Council (2017). Names of the participants have been coded and the code key stored separately from the data. Prior to the interviews, participants were reminded that the conversation is voluntary and that their personal data will be anonymized (names, district names, housing company, and name of association). They were informed that the interview will be recorded and saved as audio files and how data will be stored and handled. Furthermore, the participants were informed about how the results will be presented and who was responsible for the study. All interviewees were asked to give informed consent.

The practice of renovation in rental and cooperative housing

In this section we focus on how housing renovation is carried out in the two studied tenure types. What driving forces motivate renovations, and how are renovations organized democratically and economically? What interests dominate the process? Apart from the obvious desire to carry out the needed structural renovations of the buildings, other identified interests clearly differed between the two tenure types. We start by examining these processes in rental housing, and then describe their equivalents in cooperative housing.

Housing renovation in rental housing

In a joint statement of the three most influential housing organizations in Sweden—the Tenants’ Union, Public Housing Sweden, and Fastighetsägarna (i.e., the Property Owners’ Association)—their somewhat different interpretations of renovations are described as follows:

The refurbishment and renovation of housing is an important issue for both landlords and tenants. From the landlords’ perspective, it constitutes, among other things, crucial investments to ensure the technical life of properties and a housing standard that meets the expectations of future tenants. For current tenants, refurbishment and renovation mean changes in one’s home, as one’s living environment and cost of housing are affected. The goal is for the reconstruction to contribute to good and sustainable housing, socially, technically, and financially. (Fastighetsägarna, SABO & Hyresgästföreningen, 2017, p. 5)

In our interviews we found a discrepancy in the underlying objectives of the renovations as described by the rental housing tenants versus how they were described by the housing companies, in line with the above quotation. The interests of housing companies are described as different from those of tenants in the process of renovation. The interviewed tenants stressed the objectives of the housing companies as a source of conflict between the tenants’ and their landlords’ interests, as well as a source of anguish and a frequent topic of discussion among tenants in the renovated neighborhoods. The differences in objectives described by tenants concerned: (1) the extent of renovations; (2) increased rents and reduced affordability; (3) how the decision-making process was organized, and how much residents could influence it; and (4) what should be considered maintenance and, according to law, be financed by the housing company.

What unified the interviewed tenants was their interest in limiting the rent increases. Tenants perceived the extended timeframes of insufficient routine maintenance preceding the renovation, as significantly contributing to the rent increases. By neglecting their obligation of upkeeping, the housing company thus transferred the cost of maintenance to the tenants. In buildings where almost no maintenance had been performed for decades, tenants agreed on the need for such work. However, the question of how much of the dwelling should be renovated, and at what cost, was raised by the interviewees and was the issue most often questioned by tenants at meetings with the housing companies (Polanska & Richard, 2021; Stenberg, 2018; Westin, 2011). For instance, in a case described by one interviewee, the announced rent increase was 30–50%. The interviewee continued:

And then, as I said, I would like the plumbing to be replaced as soon as possible, because we have a lot of problems sometimes with smells, and in the winter when neighbors above us drain, I think it’s their dishwasher, it sometimes gurgles up in our sink. So, that would be very nice, but on the other hand, you feel very sad when you wear out cabinets that are site-built—very solid, good carpentry, good quality. Okay, the cabinet doors need a little painting and such, but they are very functional. And the plans they have to put parquet floors in the kitchen, I think they are just completely … completely suspect. (S1:1)

Not all of the planned measures were needed, according to the interviewee, and they did not take into consideration the quality and functionality of the existing interior fittings of the dwelling. Whereas some tenants questioned the extent of the renovation, they did not remark on the need for structural work. From a climate justice perspective, this discussion is closely connected to housing justice (Bouzarovski et al., 2018; Rice et al., 2019), as the replacement of fully functioning furnishings is neither justifiable nor environmentally sustainable (Af Klintberg et al., 2020; Reppen & Vidén, 2006), but is allowed in Sweden, leading to rent increases.

The more comprehensive the renovation, the more it was expected to raise the rent. Tenants mentioned that eliminating drying cabinets, larders, site-built cabinets, and radiators along with the installation of towel heaters, induction ranges, and wooden laminate floors in kitchens or entrance halls were interventions seen as unnecessary and undesirable. They often disputed the rent increase following renovations:

I chose to move to this godforsaken place and the rent was 5,000 when we moved here. Now I pay 9,000. Yes, it was probably 5,700 before the renovation, so it’s quite a lot of money, and to say that I should be grateful that I did not get such a high rent increase, it is downright insulting. It’s a mockery. (S3:8)

This tenant challenged the arguments made by the housing company regarding the standard of the renovation, noting that the post-renovation rent matched the rent level in newly constructed dwellings. Moreover, tenants perceived the process of renovation as more or less predetermined from the outset, and complained about their almost complete lack of influence (Bengtsson & Bohman, 2020; Stenberg, 2018; Westin, 2011). The interviewees wanted to be involved in planning the renovation and to have a greater say in what was and what was not renovated and to what extent.

Most tenants interviewed for this study, regardless of whether they were living in public or private rental dwellings, criticized their housing companies for a longstanding lack of maintenance resulting in a greater need for modernization and renovation. Moreover, tenants criticized the common municipal practice of extracting profit from public housing companies instead of reinvesting the surplus in maintenance and renovation. Like this tenant, others called this practice “double taxation”:

Some [political] parties chose to extract money from the public housing, and then we became double taxed in a way, because first we pay tax, then we pay rent, and then we have to pay increased rent or pay for the measures in the apartments by rent increases. So that it is punishing to live in public housing, then you get … it is simply like paying extra tax. (S3:7)

According to this tenant, the practice of extracting surplus rent from the housing company to finance other municipal activities was perceived as unfair. When asked about the extent of interventions, another tenant in private rental housing responded: “It would have been enough to change the plumbing and install a moisture barrier in the bathroom, and they could have taken care of the usual maintenance that they have completely ignored it since they bought it in 2001” (S1:4).

In conclusion, the main interest of the interviewed tenants was in keeping the rent increase following the renovations as small as possible, to enable them and their neighbors to remain in their homes and have a decent quality of life. Most agreed that the renovations were needed, but far from all agreed with the housing companies regarding who should bear the costs and whose interests were satisfied in the end. Housing companies, regardless of whether they were public or private, were perceived as profit driven, and the profit-making logic was normalized even among tenants, one of whom stated: “After all, it is a property owner who has an interest in getting some income—that’s how it is” (S1: 6). Another tenant described the housing companies’ prioritizing of objectives as follows:

You get very annoyed, but then you understand that this is a company that has a responsibility to its shareholders and that it is their first priority. The second priority is, well [laughs], to pay dividends, so to speak. Then as to the tenants’ best interests, and that people need to live somewhere, they are not as important as if it had been [a public housing company] or something like that. (S1: 9)

Earning profits was described as the main interest of rental housing companies, especially privately-owned ones, limiting the rights of tenants to good-quality and stable housing conditions and to participation in decisions. Due to a housing law introduced in 2011, allowing municipally owned companies to act in a “business-like” way, the older rental stock, publicly as well as privately owned, is now situated in an economic–legal environment that makes housing into a profit-seeking vehicle (Baeten et al., 2017, p. 639).

Communication and participation: Whose voices and whose decisions?

As stated above, tenants said that the interests underlying renovations differed between them and their housing company landlords and that the design, extent, and cost of renovations were difficult for them to influence. Tenants saw that the extent of renovations and quality of materials had already been determined when information meetings were arranged. Additionally, the rent increase was decided without their input through negotiations between Tenants’ Union representatives and the housing company (Stenberg, 2018). One tenant recalled the first meeting with the housing company: “There was only one-way information, then there was no discussion. So, it was at the tenants’ initiative that it happened at all” (S1:1), referring to the housing company’s lack of dialogue with tenants and lack of interest in their perspective.

In the case of public housing companies, consultations on housing renovations are common practice. However, earlier research (Westin, 2011) and our own observations indicate several flaws in the democratic praxis of consultations organized by public housing companies. The communication between public landlords and tenants is usually reduced to informing, or partially informing, the residents of previously made decisions. The tenants in public housing described such consultation processes as inflexible and insensitive regarding the demands and needs of tenants: “It’s a good model to work on, but we still call for an even stronger position for the tenants, maybe that they could have a veto or something” (S2: 3).

This tenant asked for tools to influence the discussion, such as a veto. In general, tenants perceived their position in the decision-making process as weak, even though they participated in consultations. One tenant described the consultation with the public housing company as follows:

Consultation is a lot like window dressing, in which people who are not very aware are being run over. … They get two choices, “take basic, or extended basic.” And on top of that, you can easily pay for a few luxury variants on top of the extended basic. What is not being talked about is that: “We have forced two alternatives on you, which means that you will, even if you choose the basic alternative, spend around 25% more on rent than you necessarily have to. Because we have combined both [routine] maintenance and standard-raising measures. And we did not tell you which the standard-raising measures were, and we did not talk about how much.” (S2: 2)

Since the post-renovation rent is calculated according to the new use-value of the apartment, the actual costs of components of the renovation are of little importance in the rent-setting process. The more standard-enhancing measures there are, the more the rent can be raised. Those critical of the consultation and of the limited potential influence of tenants described the process as deceitful and undemocratic inasmuch as housing companies do not give tenants any substantial influence (Bengtsson & Bohman, 2020; Westin, 2011). Moreover, the housing companies were depicted as concealing the real costs of the choices offered and of how profitable the entire renovation was. The opportunities for influence were limited and perceived as manipulating the tenants’ choices. Communication was described as one-sided and highly dependent on the housing company, whether public or private, and as using expert knowledge to justify the selected renovation measures, methods, and extent. Technical experts were referred to when justifying the choices offered, and engineers, lawyers, and negotiators were invited to meetings to present their expertise (Stenberg, 2018). In cases in which tenants had expertise in the presented topics and therefore questioned the reports, complicated situations arose. One tenant described how a neighbor’s expertise in building construction forced the private company to have a consultation with the affected tenants:

We have one, [name], he’s an older gentleman, 80 something, but he used to construct buildings like this, so he knew all about the architecture. So, every time [the housing company] tried to say, “But it’s impossible,” then he said, “What are you talking about? This is how to do it.” He has the knowledge. Without him, we would just stand there—“Maybe it’s so.” (S1: 2)

In this case, the power relations were temporarily reversed, and the expert knowledge of the tenants was used to gain influence. In cases in which a consultation was initiated, a small group was asked to represent the tenants in meetings with the housing company over a period of a few months. These groups were usually self-recruited among the participants and were not always representative of the ethnic diversity in the neighborhood. Whatever was decided on in the meetings was expected to be communicated to the rest of the tenants and ultimately voted on by all concerned tenants. Those who did not approve the final renovation plan agreed upon in the consultation ended up in the rent tribunal, where Swedish tenants lose most cases (Polanska & Axén, 2021; Wetterberg, 2016).

Housing renovation in cooperatives

In contrast to the discrepancies between the wishes of tenants versus those of landlords, renovation practices in cooperatives were characterized by a common interest among the residents and their boards in keeping costs low. We discerned two main strategies for achieving this among cooperative boards: either saving money in a fund for future renovations or avoiding unnecessary renovations. However, the design of such plans was up for discussion, prompting disagreement among residents in cooperatives.

Savings and gradual fee increases

In a relatively large cooperative association of 96 apartments, the board chair was very clear about the need to set aside savings to avoid large fee increases to cover maintenance expenses. Such saving was not always welcomed by the other members of the association, particularly if it was accomplished through gradual fee increases that could cause conflict among residents and affect how the cooperative dealt with savings and costs:

I think, before any rent increases are made, you first must consider, are we saving everything we can? That’s the first step. Does the board receive high remuneration? Does the caretaker receive high remuneration? You must consider these things first. And then there is the agreement with different partners. Electricity, for example, is this something we can influence? (C5:1)

The above quotation shows that several strategies could be utilized in avoiding large monthly fees and fee increases, such as creating a financially stable cooperative association through minimizing other costs, although monthly fee increases can seldom be completely avoided. As reported by many association interviewees, a common approach to managing finances was to raise the monthly fee regularly each year and thereby create a contingency fund for expected and unexpected costs, with the drawback of higher monthly fees. An argument against regular fee increases is that it is unfair to current residents to charge them for the costs of future maintenance that might not happen while they are living in the building. When asked about potential conflicts regarding the board’s decisions, one association interviewee elaborated on the issue of regular monthly fee increases:

But isn’t it also about thinking it’s wrong to have to pay for future investments? You want to pay for maintenance while you live here, but you don’t want to finance upcoming projects. … Compared with other apartments for sale, then maybe our association is a little more expensive. But not that expensive. It’s because we have this type of planning. But on the other hand, that way you are protected from very high … You are protected from user fee increases of 10–15%. (C3:1)

Some interviewees stressed having a balance between higher monthly costs and considerable savings that could cover the cost of maintenance, renovations, and repairs as important, compared with other apartments on the market. An interesting aspect of this discussion is that the above cooperative association interviewee spoke of a 10–15% fee increase as “very high,” which is indicative of the difference between rental and cooperative housing regarding the increased costs, especially as these fees are usually considerably lower than rents even before renovation. Another association interviewee shared a similar experience, saying that they did not experience conflicts over renovation costs, thanks to their policy of gradual fee increases: “And since we raise the user fee so little every time … we think it’s smarter to do it that way, because if we decided to suddenly raise the fee 10%, there would be outrage” (C1:2).

Gradually raising the monthly fee entails walking a fine balance, as a relatively high fee can affect the residents and influence the market price of the apartments, causing irritation, worry, and conflicts. On the other hand, some interviewees stressed that if the association has a substantial fund of savings, it can be used for renovations and considerably lower future fee increases.

Restoration instead of structural renovation

In addition to setting aside savings, another possibility was to do as little maintenance as possible. Such strategies did not strictly exemplify renovations, as the interviewees implied that renovations were postponed or avoided, but were relatively common among cooperatives. This finding corresponds to previous research and reports arguing that the lack of tax deductions for renovation and reconstruction impedes the work of cooperative boards (Palm, 2013, p. 19). The work of boards is obstructed by for instance, waiting for new technology, information, or new policies (Lind & Muyingo, 2012, p. 22) or by having minimal technical knowledge of renovation needs in cooperative housing boards. For some associations, the restoration rather than replacement of plumbing was rejected as not reliable enough, but several studied associations described how they had chosen to maintain and restore rather than to replace plumbing, thus avoiding large costs (Af Klintberg et al., 2020). This strategy, although climate friendly, is not free of conflict: it is convenient for those who have the financial ability to renovate on their own, but less desirable for those hoping that structural renovation on the initiative of the board would result in a new bathroom, since damage caused in such situations is often covered by the cooperative. When asked about the reactions to plans for a restoration instead of a structural renovation, the chair of one cooperative board described some complaints:

And it was almost only those who had not renovated their bathrooms, but still had the bathrooms from 1965–1966. Many of us have, I mean, we have renovated the kitchen, the hall, the bathroom and the little separate toilet, and our bedroom. (C6:2)

Another cooperative interviewee also reported views both against replacement and in support of having bathrooms restored: “And others had not done anything about their bathrooms but had been waiting for the board to do it for them so they would have new bathrooms” (C3:1).

Another potential conflict involved those who had already invested in costly renovations of their bathrooms and could not expect to be fully reimbursed in the event of full structural renovation, since cooperatives usually decide on a standard above which individuals must pay themselves. In sum, residents who fully supported renovation were those who saw increased apartment value as a result, whereas those who had invested in renovations before the structural works that the board planned were more ambivalent about the plan.

As we can see, the potential conflicts largely concern the procedure itself rather than the cost, since renovation rarely involves large fee increases in cooperative housing. However, lack of understanding and knowledge of one’s responsibilities as a resident/owner in cooperative housing can cause challenges for boards and residents. Previous studies have emphasized a lack of competence in maintenance and a lack of easily accessible information (Muyingo, 2015). It is tricky terrain, as individual economic interests and the interests of the association must be balanced.

Economics: Maintaining market value

The main interest of cooperative housing associations in relation to renovation seems to be keeping costs low, and this is connected to another interest, namely, that of maintaining market value of the apartments. Market value is not only connected to monthly housing costs, but also to the general state of the building, which is the responsibility of the cooperative. When asked about the extent to which the interiors of kitchens and bathrooms were replaced, all the associations claimed that they only replaced such parts that had to be torn out during renovation. Often, that meant that kitchen interiors could be saved and reassembled, unless the kitchen and bathroom fittings were installed wall to wall, in which case the kitchen interior was sometimes damaged. One of the interviewees elaborated on this:

However, if the association considerably delays the renovation and charges such low monthly fees that they must raise them to afford the interest and mortgage payments, this will negatively affect the market value, because the fees will have to be increased and the buyer knows it. (C5:1)

Above, the board chair explained that increased market value could be an indirect effect but was not the key motivation of the board when deciding to carry out renovation and maintenance work. Similarly, another cooperative association interviewee described how increased market value could indeed be a positive side effect, if the cost of the renovation did not overly affect the monthly fees for the residents: “We do these renovations because we must maintain the building, but it’s a positive side effect that the market value also increases, but not if new loans result in higher monthly fees” (C1:3).

Managing the balance between maintenance, renovation, and market value—in other words attractive apartments with low fees—is perhaps the most crucial task of housing association boards. In other words, residents of cooperatives benefit financially from renovations as these could result in an accretion in the price of their apartment, if the fees were kept low. Although the interviewed board representatives did not emphasize market value, avoiding monthly fee increases was central, and this was closely tied to market value as well. As one representative noted, a poorly kept building could need costly renovations, also lowering the market value if the renovations affect the monthly fee. The strategy of restoration and the goal of trying to save well-functioning furnishings also had an indirect effect on the ecological sustainability of the renovation (Reppen & Vidén, 2006).

Democracy: Information and procedure in cooperatives

Although cooperative housing is democratically governed in that the board is elected by the members, there is also a power structure in that the board is charged with maintaining the building and residents are legally obliged to comply with board maintenance decisions (Bengtsson & Svensson, 1995). Communication regarding renovations generally entails informing, but not opening the issue up for discussion:

The members were only involved to the point when we decided to do it. We installed safety doors too, it was decided at the same meeting. … And all we did was present the order of priority, the preliminary time plan and cost, and the expected influence on fees. (C1:1)

The cooperative housing association interviewees were all clear about the need to inform residents well in advance of renovations, and to have a clear strategy before making plans public to avoid unnecessary conflicts and delays. This strategy could be interpreted as a way to avoid the spread of rumors and, in the end, to facilitate compliance with the board’s decisions:

If I put it like this—if we are planning something, we never announce it until it is ready, when the board has decided “this is what we are proposing.” No one knows anything before then, because otherwise we would have this rumor—“Apparently we are going to do this, when will it start?” (C6:1)

Strictly speaking, residents in the association can protest a decision and even elect a new board (Bengtsson & Svensson, 1995). However, the interviewed representatives generally described a relatively smooth process, connected to agreement on the priority of keeping the fees low (Sørvoll & Bengtsson, 2018). Commonly, residents are not keen on taking responsibility for maintenance and renovation, leaving such projects to the board members (who are also residents), a finding corresponding to previous research on Swedish cooperatives (Muyingo, 2015). At least originally, cooperative housing was based on the idea of communality, although all the housing association interviewees reported only relatively vague resident interest in board work and in sharing opinions on renovation and other aspects of maintenance (Anund Vogel et al., 2016), something that seems to have changed since the 1990s (Bengtsson & Svensson, 1995).

Conclusions: Predatory housing commodification

Our analysis has shown that housing renovation in times of housing financialization is driven by market logic and commodifying processes in both rental and cooperative housing. Still, the renovation practices in rental housing take a substantially different form compared to those in cooperatives regarding the extent of the work as well as the involvement of and outcomes for residents, contributing to increased tenure and housing inequality in the two cities we have studied. This commodifying process contributes both to the growing gap between owner-occupied and rental housing, and to the affordability crisis of rental housing that Sweden is experiencing, especially in large cities. This research identifies important differences between renovation practices in rental versus cooperative housing when it comes to their scope, economic, and social implications for residents, and issues of representation and inclusion. The main results are summarized in Table 3, which demonstrates that although the economic aspects were important to those managing the renovation process in both housing companies and cooperative boards, the priorities were essentially different. In both cases, the renovation managers sought cost-effective solutions and intended to raise the property value using technocratic measures. For both types of managers, housing renovation entailed responding to a combination of maintenance needs and investment considerations—in Brenner et al.’s (2009) terms, it was a medium for expanding commodification. Nevertheless, their order of priorities differed considerably regarding the crucial aspect of residents remaining in place after renovation: in cooperative housing, the declared intention is to keep costs low to protect the residents’ investment and ability to remain in their homes. The monthly fee is usually low to start with and is rarely raised more than 10–15%, versus increases of 23–70% in rental housing where pre-renovation rents are usually considerably higher than the pre-renovation monthly fees of owner-occupied cooperative housing. Instead, the risk in cooperative housing concerns the mortgage for the apartment, reflected in the expressed board intentions to protect market value. Several reports on rent increases have stressed the likelihood of low-income households having to move because of higher rents, contributing to increased segregation in Swedish cities (Boverket, 2014; Mangold, 2016). The “expulsion” (Sassen, 2014) of poor households from renovated rental housing has both economic and social dimensions, causing, for example, the forced displacement of some and displacement pressure (Baeten et al., 2017; Marcuse, 1985; Polanska & Richard, 2019; Pull, 2020; Pull & Richard, 2019), leaving clear marks in the landscapes of cities. This process is known as renoviction.

Table 3. Differences in procedures and interests driving renovation of rental versus cooperative housing.

		Rental	Cooperative
Democratic aspects: decision making, deliberation, and participation	Procedure	Information or consultation	Elected board (representative) and annual meeting (direct, deliberative)
	Use of expert knowledge	Technocratic professionals working for the company	Varying competence among board members; hired consultants
	Calculation of costs	Done by the company; not transparent to the tenants	Done by the board, often to be approved in an annual meeting
	Resident participation and influence on the process	Influence and participation limited to consultations Formal legal protection of tenants through approval	Participation limited, but formally open to all residents
Economic and social aspects	Extent of renovation	Extensive and expensive; risk of displacement	Limited and careful not to increase fees
	Long-term planning (of costs)	To a lesser degree; renovation usually preceded by neglected maintenance	To some degree; small-scale repairs and maintenance to lower costs; long-term savings
	Priority of interests	Modernization and return on investment important: economic efficiency	Balancing living costs and market value

By comparing ongoing renovation in rental and cooperative multifamily housing, we have argued that despite similar needs for regular maintenance, renovation practices in rental housing take a substantially different form compared to those in cooperatives regarding the extent of the work as well as the involvement of and outcomes for residents. In exploring how the process of housing renovation is organized and how it affects residents, we have used the concept of predatory housing commodification, referring to the relational and exploitative dimension of this process. The market logic underlying these practices, given the intensified commodification and financialization of housing and real estate globally, has produced tenure inequality and deepened the housing crisis (Madden & Marcuse, 2016).

One expression of tenure inequality is the cost of housing in both tenure types. In a situation in which the interest rate for housing mortgages has been very low for several years, the monthly fee in cooperative housing has remained virtually unchanged: the average fee for the Stockholm Metropolitan Region was SEK 672/sqm/year in 2019, having increased only marginally from the previous year, and increased only 3% between 2016 and 2020 (HSB, 2020, p. 4). From 2017 to 2021, rent levels increased, on average, 11% in private and 9% in public rental housing in Sweden as a whole, and 7.9% in public and 13% in private rental housing in the Stockholm Metropolitan Region (Sveriges Allmännytta, 2020, p. 22). In 2019, the average rent in the Stockholm Metropolitan Region, the most expensive region in the country, was SEK 2154/sqm/year (Sveriges Allmännytta, 2020, p. 32), over three times the average monthly fee in cooperative housing in the region. The gap between these tenure forms becomes obvious from comparing these numbers.

Tenants in rental housing were worried about being unable to remain in their homes after a renovation, given the associated sharp rent increases, experiencing emotional distress and anxiety. This worry of being displaced has been observed in previous research on the renovation of rental housing in Sweden (Baeten et al., 2017; Polanska & Richard, 2019; Pull & Richard, 2019; Westin, 2011) and internationally (Fullilove, 2005; Paton & Cooper, 2016; Rolnik, 2019). In contrast, residents in cooperative housing rarely worry about having to move after a renovation.

Democratic differences between the renovation procedures in the two tenure forms were also striking. Whereas the owners of cooperatives are formally able to participate in crucial parts of the decision-making, although not always interested, knowledgeable, or motivated, the affected residents in rental housing received limited information about and had little influence on the scheduling, extent, and cost of the renovation of their homes. This was criticized by tenants, who had to fight for the right to be involved in the decision-making process.

Another important difference concerns the extent of renovations. In rental housing, perfectly functioning fittings, for example, kitchen appliances, wooden floors, and bathroom fixtures, are often replaced instead of being restored. In cooperatives, in contrast, the renovation process is usually gentler, although interior renovations performed by individual owners are another matter. The ecologically and economically unsustainable rationale of “wear and tear” is considered broadly legitimate by rental housing companies and reinforced by Swedish rental tribunals, which tend to accept the justification for the high costs of renovation despite tenants’ pleadings (Polanska & Axén, 2021; Wetterberg, 2016).

To summarize the differences identified in this relational analysis of renovation processes in the two studied housing tenure segments, we have argued that whereas rental housing renovation could lead to the renoviction of those with the lowest incomes, cooperative housing renovation did not. The differences observed are indicating that alternatives to predatory renovations are possible.

Acknowledgments

We would like to thank Kristina Boréus and other colleagues at the Institute for Housing and Urban Research, Uppsala University, who have commented on previous versions of this text. Special thanks to the researchers in the project “Renovation and Participation: Towards an Ecologically, Socially and Economically Sustainable Million Program?” (Formas, grant no. 2018-00191), who gave us insightful suggestions on how to develop our work. We are also grateful to the reviewers and editors of the JUA for their constructive comments and guidance. Lastly, we would like to thank Formas (grant no. 2018-00061) for financing our research.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by the Swedish Research Council for Sustainable Development [2018-00061, 2018-00191].

Notes on contributors

Dominika V. Polanska

Dominika V. Polanska is an Associate Professor in Sociology and Senior Lecturer in Social Work at Södertörn University, working as a researcher at the Institute for Housing and Urban Research, Uppsala University. Her research interests encompass urban transformation, housing, displacement, and urban movements. Her current research focuses on rental housing renovations in Sweden, and their social and legal aspects. She is the author of Contentious Politics and the Welfare State: Squatting in Sweden (Routledge, 2019) and has published in journals such as: International Journal of Space and Culture; Journal of Housing and the Built Environment; GeoJournal; Interface: A Journal for and About Social Movements; City: Analysis of Urban Trends, Culture, Theory, Policy, Action; International Journal of Sociology and Social Policy; Participation and Conflict; Radical Housing Journal; and Voluntas.

Karin Backvall

Karin Backvall is a researcher in Human Geography at the Institute for Housing and Urban Research, Uppsala University. Her research interests include residential segregation, territorial stigmatization, housing justice and sustainable urban development. In her current project, she has worked as a researcher in collaboration with Uppsala municipality, aiming to create an exchange of knowledge on urban development, and particularly on how to decrease urban housing inequalities.

Åse Richard

Åse Richard is a doctoral student in Human Geography at the Institute for Housing and Urban Research Uppsala University. Her PhD project is based on longitudinal activist research in Uppsala, and concerns feminist and intersectional dimensions on the renovation of multifamily housing in Sweden. Together with colleagues, she has recently published in the following journals: Social and Cultural Geography, Radical Housing Journal and (in Swedish) Sociologisk Forskning.

Irene Molina

Irene Molina is a Professor of Human Geography, working at the Institute for Housing and Urban Research at Uppsala University. Her research focuses on urban social inequalities of class, race and gender and the struggles for urban and housing justice at particular places, as well as their connections to global power relations. Her most recent publications are the special issue in Revista INVI, “Ciudad, vivienda y género desde una mirada incluyente e interseccional,” edited together with Ximena Galleguillos and Karin Grundström, and the book chapter “Rätten till Bostad eller kris i bostadsfrågan” (The right to housing or crises in the housing question), together with Carina Listerborn, both published in May 2022.