Home fires: Rentals continue to be scarce and costly despite layoffs; politicians point fingers at who’s to blame

wreckedhomes

There’s lots of newly-built housing, people are being laid off by the hundreds – yet places available for rent are extremely rare and costly

Dozens of Longyearbyen residents have scrambled to find housing on short notice during the past couple of months due to the destruction of 11 homes in the Dec. 19 avalanche and the 30 tenants at Gamle Sykehuset forced to suddenly evacuate their apartments last month. While most appear to have found at least temporary housing, the shortage has touched off a political feud about who’s responsible for the situation and how it should be addressed.

“Longyearbyen has a dual housing market,”  wrote Øyvind Snibsøer, head of Svalbard’s Labor Party, in a letter to Svalbardposten published Feb. 25. “The ‘lucky ones’ are those that have a subsidized housing or receive housing allowance from the employer.”

“The high housing prices are a serious impediment to Parliament’s intention to have ‘a robust family community’ because there are few families who can afford to pay the price Store Norske Properties is demanding for non-subsidized housing.”

Store Norske’s property subsidiary is the dominant real estate company and, by charging the same for a simple family apartment that a typical apartment in Oslo costs, affects what others with housing charge for rent, wrote  Snibsøer, who is also a member of the Longyearbyen Community Council.

But his criticism that Norway’s government, which owns Store Norske, is profiting to the detriment of the community is being rejected by Minister of Industry and Trade Monica Mæland. In a response letter published March 4 in Svalbardposten, she stated the company, not the ministry, sets prices.

“I expect, however, that the company handles this on commercial considerations, and the best interests of the company and the community in Longyearbyen,” she wrote.

 

Mæland, a member of the ruling Conservative Party member, also took a political potshot at Snibsøer by noting “this government has prioritized Svalbard more than any other government before.” That includes potentially providing Store Norske and Longyearbyen’s government more than 1.25 billion kroner in loans and assistance between 2015 and 2020 to help the city restructure after the near-total shutdown of coal mining this year.

“Snibsøer’s assertion that I am helping to slow the development of Longyearbyen falls on its own absurdity,” she wrote.

Store Norske owns 381 dwellings in Longyearbyen, 90 percent of which are currently occupied and one-third of which are rented out to external tenants, according to the company’s fourth-quarter report for 2015. The remaining residences are mostly being renovated.

A 40-square-meter apartment rents for about 7,000 kroner a month and a 120-square-meter family residence for about 16,000 kroner a month, according to Sveinung Lystrup Thesen, Store Norske’s property manager, in his letter to the newspaper contributing to the debate.

“The price level at Store Norske Properties  is set, among other factors, according to what it costs to invest in building housing in Longyearbyen, as well as coverage of municipal taxes (which are high in Longyearbyen), district heating (which is a significant cost – and moreover not normally a part of the rental rate compared to the mainland), and ongoing and periodic maintenance.”

But the vacancy situation – and perhaps prices – is likely to improve in the near future. Store Norske, in its report, notes its mass layoffs will mean “significant challenges for housing rentals, especially after mid-2016.” The Longyearbyen Community Council also voted Tuesday to spend at least some of a 22-million-kroner economic stimulus grant from the ministry to build new housing.

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