Erik reflects on the housing shortage

The shortage of housing has not gone unnoticed, both in the capital and its surrounding areas, or in large parts of Sweden for that matter. The housing shortage in Stockholm and the astronomically high house prices is mainly because the region has great urban drift while, historically, there has been too little construction.

At the end of last year, 2.2 million people lived in the Stockholm region, 35 000 more than in 2014. Here was centered 45 percent of the country's population growth during the year, an increase that is expected to continue so it is therefore important to plan for over 500 000 new inhabitants by the year 2030.

To meet the needs of the region at least 16 000 new homes per year are needed to be built. On the positive side we are actually seeing the beginnings of new housing construction. Not since the days of the environment program was implemented have so many construction projects started in the county during 2015. According to a National Board of Housing, Building and planning prognosis nearly 18 000 new houses are expected to be built during 2016. The problem is apparently no longer in the capacity of municipalities to draw up detailed plans or that there is no need for them. Property companies and politicians all seem to agree that the need for housing is very big, and want to see to it that get homes built. But why are they not building even more and at an even faster rate?

Modules, walls and flooring arrive regularly

We come into regular contact with construction companies here at Port of Södertälje. They use the port for the import of prefabricated walls, flooring and housing modules. There is now a 12-month waiting time for prefabricated walls. In Sweden we have largely closed all our prefabricated manufacturing companies and a very large part of the prefabricated units now come from the Baltic countries. The Baltic States' largest export market is Sweden, and I guess that this focus has now increased further with the Russian economy that dropped like a stone over the past year. Several of the Baltic manufacturers have now concentrated all of their production towards exports. It’s become harder for local companies to compete but there is a lack of prefabricated units in Sweden. However, on a brighter note, the port received a request for the handling of vessels from a Russian manufacturer.

This is where Port of Södertälje’s fast-growing business area ’fast bulk’ comes into play. In just three years the port has gone from receiving zero vessels to numerous ships per month loaded with prefabricated construction materials. We saw early a possible trend and therefore invested time and money in market research, marketing and handling equipment. We became specialists and went on to establish contact with producers in the Baltic countries close to us. In addition to the efficiency of transporting construction material via Port of Södertälje, there are also good environmental arguments supporting this. Shipments go over the Baltic Sea in conventional ships instead of fast ferries, and this reduces carbon dioxide emissions by 75 percent. Shipments from Södertälje to the construction site are effected with the shortest of delivery times.

But it's not just houses that are being built in Stockholm. The port also handles steel ponts for diverse projects, delivered by both rail and ship. Large and heavy bridge parts for infrastructure are very much in demand in this fast expanding region. The port handled all the units needed for the new Årsta railway bridge and next summer we expect to handle units earmarked for Central Bridge that weigh several tons each.

The way forward

I believe that the import of prefabricated housing elements and modules will continue to grow strongly. In Södertälje, we predicted this four years ago and put up a strategy to deal with it. We met with the ambassadors of the Baltic countries, customers, recipients, producers, etc. Before the first arrival we were worried about handling and possible handling damage we could cause as we had heard of nightmare scenarios from colleagues in the business. We therefore chose to visit the manufacturing companies, at both management, labour management and stevedoring level. Up to today, we have made seven trips where stevedores have visited factories, seen loading processes and met the people on the shop floor. This has meant that ships that come to us have become much easier to handle, although of course there are other things to take care of. We at port consider this as one of our success stories. From first refusing requests, and sighing deeply within the organization when we started talking about dealing with concrete units, to now having more ships docking at port every month with large volumes we are actually helping to alleviate the housing shortage in Stockholm.

This is my last Newsletter article before leaving the port for pastures new. I wish all my friends and colleagues here the best for the future in the knowledge that you are all contributing to a stronger region through the construction of much-needed housing.

/ Erik