Balancing Social and Economic Sustainability in Renovation with an Affordable Option for Tenants? A Pilot Study from Sweden

Kristina Mjörnell, Jenny von Platten and Kicki Björklund
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Kristina Mjörnell: RISE Research Institutes of Sweden, Sven Hultins Plats 5, 412 58 Gothenburg, Sweden
Jenny von Platten: RISE Research Institutes of Sweden, Sven Hultins Plats 5, 412 58 Gothenburg, Sweden
Kicki Björklund: Göteborgs Stads Bostadsaktiebolag, Box 5044, 402 21 Gothenburg, Sweden

Sustainability, 2022, vol. 14, issue 7, 1-21

Abstract: A public housing company has applied a new renovation strategy, comprising no standards raising and thus rent-raising measures, in 20% of its apartments. Prior to renovation, the tenants were given the opportunity to choose renovation options involving different standards and costs after renovation. The purpose of the study is to follow up and give feedback on the renovation strategy. The aim was to evaluate implementation of the strategy in practice using a case study, in terms of the tenants’ opportunity to influence and the housing company’s profitability. To follow up, two methods were used: a survey of the tenants’ perception of choosing renovation options, and a financial assessment of the profitability based on the renovation cost and rent increase for different choice scenarios. The results from the survey show that the tenants appreciate being able to choose between different renovation options as it gives them the opportunity to decide on their housing costs and standard. With more than half of the tenants choosing the maintenance option involving a very low rent increase, the dividend yield will not be high enough to make the renovation profitable, but if only 20% had chosen the maintenance option, the dividend yield would be more feasible in the long run.

Keywords: renovation strategy; rent increases; tenant influence; dividend yield (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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