The global Tenant, April 2003

Will the right wing majority manage to privatize the public housing stock in Denmark? The opposition is organizing resistance and the public opinion is against a sell-out.

I love walking the narrow streets of Copenhagen. This city more or less managed to escape the European inner city demolition trend in the 1960´s and 70´s. The university is still situated in the city centre and there are cafés, bars and small restaurants everywhere. The city centre still holds plenty of residential buildings and in the evenings lights can be seen in the windows with people moving behind curtains.

For a newcomer to Copenhagen, the sight of the mixed city population gives you the impression of a city with room for everyone. This has been the case up till now.

Selling, or not selling…

The right wing government has stated its intention to sell off the public housing stock (non-profit co-operatives) in Denmark, starting in 2003. Not a very unique trend… There are about 500 000 public housing flats in the whole of Denmark, which corresponds to about 20 percent of the total stock. Copenhagen has a 50-50 distribution of private ownership versus rental, of which 20 percent is public and 80 is private rental.

The Danish Tenants Organisation together with representatives of the public housing associations, and a majority of the Danes (57 percent in 2002), oppose this development.

The arguments from the government are similar to those in other countries; tenants really want to own their housing – a persisted argument even if polls show other results, and that owners take better care of their properties and common premises than renters. Experiences from other countries such as Sweden, the UK and countries in eastern Europe show increased segregation - as the offer is more attractive to those tenants with a higher income. Less attractive housing in less attractive areas are not easily sold. It is also estimated that direct housing costs will increase for new owners with more than 50 percent.

Another side effect is increased costs for the local authorities. By law, the Danish authorities have to assign housing to its citizens, and to immigrants. Without public or social housing the authorities have to house the needy in hostels and hotels. In Sweden, several municipalities have been forced to buy back houses, houses they sold some years ago.

Public, but private

Public housing in Denmark, also referred to as co-operatives, is available for all citizens, with no income limits. Public housing on larger estates give priority to families with children. Individuals with special needs have priority to 25 percent of the stock. The public housing sector is actually private, in the sense that the formal owners are non-profit housing associations. Through a formalized decision-making process all tenants can have an influence on e.g. the budget; rents, investments and repairs.

Rents through the prime cost principal

In the public sector the prime cost principal means a system of no profits. The rent should cover costs for continuous and present maintenance. A budget deficit one year is cleared through rent raises the next year. Major repairs are planned for 10 years ahead and are all financed through rents.

Selling is expropriation

The Danish Tenants Association and other groups defending public housing soon discovered that this massive sale of public housing was actually the selling of private property, as the owners are the housing associations. The sale was defined as expropriation, which is prohibited by constitutional law.

On February 7 the news hit the front-pages in Denmark, and the Danish government has now backed and called for a time-out. The government’s intention is to put forward a new report in May, but without consulting interest groups such as the National Association of Co-Operative Housing Societies or the Danish Tenants Association. The Danish conservative government has surely not yet backed from its intentions, and the battle is far from won.

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