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Research on rental flats assigned using a lottery

Alive Bostad AB has begun building 162 rental apartments in Rosendal in southern Uppsala. The goal is to offer apartments to young adults (18–35) with about 30 per cent lower rents than equivalent housing. The buildings, designed by Tengbom arkitekter, are being built from wood, and the apartments will be assigned using a lottery.

The lottery makes the project interesting for Urban Lab’s researchers, who gain a unique opportunity to study aspects that cannot be studied when apartments are awarded based on queue time.

“We are interested in studying several questions. How is the area’s socioeconomic and demographic mix impacted by random allocation of housing? What does it mean for a young person to receive their own home without having to wait in a housing queue for many years? Does this, in turn, impact educational outcomes, family formation, labour market outcomes, and general wellbeing?” says Matz Dahlberg, professor of economics at the Institute for Housing and Urban Research and director of Urban Lab.

Traditionally, rental housing is assigned through a queue system, where the longer a person has been in the queue, the more apartments they generally have to choose from and the more centrally located these flats are.

“The housing market for young people has become very difficult. This impacts their opportunities to start their adult life and their confidence in the future,” says Fredrik Wallman, founder and CEO of Alive Bostad AB.

He feels that assigning apartments through a lottery is more fair: “Those interested have the same chance.”

According to the researchers, the lottery needs to be done in a transparent way and clearly demonstrate that individuals are simply not bypassing the queue. One way to achieve this would be to allow individuals in the housing queue that meet certain criteria to sign up for the lottery. This would maintain the privacy of the regular queue.

“We want to create change in the housing market and offer young people high-quality housing that they can afford,” says Fredrik Wallman.

“At Urban Lab, we are very open to collaborating with external actors to evaluate vital social initiatives. Joining projects at an early stage to be able to affect the design of the initiative makes for a credible evaluation. We see this as particularly valuable. For these reasons, we view the ongoing collaboration with Alive Bostad as very exciting,” says Matz Dahlberg.

The first renters are expected to move into Alive Bostad AB’s apartments in Rosendal in December 2022.

More information about the project at the Alive Bostad AB web site