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The red-green Oslo City Council will change the municipal housing rental schemes. Too little too late, thinks Rødt.
Rina Mariann Hansen (Labor Party), councilor for social services in Oslo, proposes a major reorganization of the rental schemes in municipal housing. For several years, there has been a conflict with the Rødt coalition party. Olav Olsen
Since 2015, the Ap, SV and MDG city council parties have worked with Rødt to get a majority in the city council for their municipal budgets.
For several years, Rødt has demanded that the rent level in municipal housing be lowered. It culminated in a heated debate at city hall last June, where it was decided to study the issue with the aim of changing the rent model – and freezing the rent level until it was done.
Oslo has around 9,500 ordinary municipal dwellings, managed by the Boligbygg municipal company, and the population is diverse. Some are older or have social security, but some are also relatively new immigrants.
Today, the income is based on the so-called ordinary income, which should correspond to a moderate market income. But because rental prices in Oslo have become so high, many rely on both state support for housing and municipal support for housing at the top to pay their rent. Some also receive welfare at the top.
The report is now ready. In its budget proposal for 2021, the city council proposes a major restructuring.
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This is how the city council will change the schemes
– Now rents have been frozen for a while. Since the rents are also used to finance maintenance and operation, Boligbygg has been compensated with funds from the city treasury. We propose to abolish the freeze in 2021. At the same time, we do not want anyone to pay the gang rent, says Rina Mariann Hansen (Labor Party), who is a city councilor for social services.
Starting in 2022, everyone who lives in ordinary municipal housing will have a rent reduction of 8 percent of the current rent, is the proposal.
– Then, for 20 years we have had a municipal housing benefits plan that has strong blocking effects. If you’ve increased your income a little, you’ve lost a relatively large amount of municipal housing support, Hansen says.
– The new scheme will be people-oriented and needs-based, so that people who get an increase in income can keep more of the increased purchasing power themselves, he also says.
The goal is also that fewer people need social assistance at the top.
– How do you think the reorganization proposal will be received in the town hall?
– The parties have been concerned about very different things. But some will probably think that the percentage reduction in rent is not big enough. But it is also an economic question, that is, how much can we spend on it.
– But this is a model that does it better than today. And that’s what we’ve tried to achieve, Hansen also says.
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Red is not impressed
Eivor Evenrud, leader of Rødt’s group in the town hall, disagrees and warns of tough negotiations.
She calls the proposal a “serious breach of the promise of the city council.” Due to the evolution of prices in the rental market, the proposal in total will mean that many in 2022 will only end up with the same rent they have today, he believes.
– All in all, this proposal does not mean that the municipality spends much more money on people in municipal housing, this is a trick with round-trip numbers, says Evenrud, who also criticizes that nothing will happen in 2021.
– But will the gradual introduction of a new scheme necessarily take some time?
– That is why two years ago we asked the city council to hasten to investigate this. We have waited and waited. And now they say they need a completely new system and even more time, Evenrud responds.
The opposition in the town hall, both the bourgeois parties and Rødt, had come forward to attend the town hall press conference. Here is the leader of the Øystein Sundelin group in the Conservative Party in conversation with Eivor Evenrud in Red. Olav Olsen
At the same time, she is positive about the plans to adjust the schemes so that it is possible to generate more money for the residents, without it all disappearing again in reduced aid.
Evenrud also notes that if the temporary rent freeze is lifted until next year, many will receive an increase in rents.
– But in 2022, they will get an 8 percent reduction. Then they jump first and then go back down, says Evenrud.
– Set money for transitional arrangement
Councilor Rina Mariann Hansen points out that in 2021 a temporary provision of 20 million will be reserved precisely to alleviate the effect of the abolition of the rent freeze.
Details on this will come later this fall.
Today the municipality spends more than NOK 500 million a year on housing subsidies. At the same time, around 300 million are raised annually in the form of dividends from Boligbygg.
Fully implemented in 2022, the proposed restructuring will cost around $ 40 million more than today.
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Various pitfalls in the current scheme
The current scheme has several types of threshold and lock effects.
In a recent reader post on Aftenposten, Tøyen resident Bjarte Breiteig described both. A neighboring family that is an immigrant has to move from their municipal home and therefore also from the neighborhood because both adults in the family have already found a job.
The municipal housing allowance in Oslo has a completely fixed cap up to the crown: if a household with two adults earns more than five times the basic amount of national insurance (NOK 506,755 in 2020), they are no longer entitled to housing. For single people, the limit is four times the basic amount.
It is an example of a threshold effect.
But because the family has paid market rent to the municipality, they have not had the opportunity to raise capital to buy a home later.
This is an example of a blocking effect.
If you were assigned municipal housing five or ten years ago, you were not allowed to participate in the house price increase in the same period, nor were you allowed to save capital. For some, it means they have to move into affordable private rental property elsewhere, for others they are locked in municipal housing forever, and for still others they work less than they really want.
The award criteria have not been evaluated at this time. But Councilman Hansen cautions that they, too, will watch.
– In the new year, a so-called housing needs plan will be presented to the City Council, where we will also see it, says the councilor
