New law could enable 5,000 affordable homes in Copenhagen

A law expected to be passed on Thursday could allow Copenhagen and 17 other municipalities to build thousands of additional non-profit rental homes, DR reports.

The legislation would allow municipalities in areas with particularly high housing prices to exceed the existing construction cost limit for such homes by up to 20 per cent.

Copenhagen Mayor Sisse Marie Welling of the Socialist People’s Party said the city could build up to 5,000 non-profit rental homes by 2032 as a result.

“We desperately need homes in our city,” Welling said.

Construction of new non-profit rental homes has largely stalled in Copenhagen because high land prices and sharply rising building costs have made it almost impossible to stay below the current limit.

Part of the additional cost will be reflected in residents’ rents. Municipalities will also be allowed to provide interest-free loans without repayments for the first 50 years.

Experts said the legislation could increase the supply of affordable homes but would not end Copenhagen’s housing shortage. Housing researcher Rikke Skovgaard Nielsen of Aalborg University said the city’s housing crisis would not be solved by the measure alone.

Curt Liliegreen, director of the Housing Economics Knowledge Centre, estimated that Copenhagen has a shortfall of about 30,000 homes. He said the population was continuing to grow, meaning it would take time to close the gap.

Non-profit rental homes are owned and operated by housing organisations without a profit motive. Rents are based on the actual costs of operations, maintenance and financing.

Liliegreen said the homes would be significantly cheaper than private rental housing and were important if Copenhagen was to remain a city where people from all income groups could live.

However, Nielsen said new non-profit rental homes would not necessarily create a more socially mixed city because access is determined by waiting lists. She said people with the lowest incomes would not automatically be the ones moving into the new affordable homes.

The law is scheduled to enter into force next week.