Skövdebostäder is a municipally owned public housing company. This means that the company is subject to both the Companies Act and the Public Housing Act. The Public Housing Act took effect in 2011 and can be seen as a link between the Companies Act and the mission of municipal public housing companies. The Swedish Public Housing Act summarizes it as follows: “Under the Act, companies must, for public benefit purposes, manage properties in which residential apartments are leased, promote the supply of housing in the owner municipality, and offer tenants the opportunity to influence housing matters and have a say in the company. This public-interest purpose includes a social responsibility. At the same time, operations must be conducted according to commercial principles.” Public housing companies are an exception to the cost-recovery principle under the Local Government Act and to the prohibition against operating businesses for profit. The requirement for commercial conduct is intended to prevent a distortion of competition with private landlords.
Business principles mean that housing companies must always act in the company’s best long-term interests, taking into account the constraints and conditions inherent in their role as long-term, responsible property owners in the rental market, within the framework of applicable rules and standards.
To be a long-term property owner capable of maintaining properties well and providing good service requires responsible financial management; therefore, it is essential to generate a profit. The profit can also cover any unexpected costs. A surplus from our day-to-day operations gives us the flexibility to make decisions when it is strategically sound to do so. This could involve unplanned maintenance, new hires, system upgrades, or investments in new equipment. Skövdebostäder has always been a well-managed and financially strong company, thanks to sound decisions and a driven management team.
Profits are reinvested in the company through new housing projects, reinvestments, and a high level of service
Over the past 10 years, Skövdebostäder has invested 1.7 billion in new housing projects and built just over 1,000 apartments, and is currently working on an additional 250 apartments that will be completed by 2024. In this way, Skövdebostäder contributes to Skövde’s development and its potential for growth. A growing municipality can provide better services and opportunities to its residents.
In addition to this, the company has reinvested approximately 600 million kronor in existing properties. We also maintain the company’s properties on an annual basis to ensure they meet high standards and serve as good homes for the thousands of tenants that Skövdebostäder has.
Thanks to a strong and stable financial position, Skövdebostäder has been able to maintain its pace of construction, renovations, and high level of service since 1943, even as society has weathered crises such as economic downturns and pandemics.
Dividend to the municipality
The Act on Public-Interest Municipal Housing Corporations contains provisions limiting value transfers. This limitation means that a public-interest housing corporation’s value transfers—such as dividend payments and the transfer of group contributions—may not exceed a certain amount. In 2019, the Skövde City Council (KF § 16/19) decided that dividends from AB Skövdebostäder shall be paid in accordance with the limitation rule in Section 3 of the Act on Municipal Housing Companies for Public Benefit. Maximum amount for value transfers = contributed capital × (average government bond yield + 1 percentage point), but no more than half of the company’s net income. In 2021, this amounted to 84,680 kronor.
In addition, AB Skövdebostäder is expected to pay an annual dividend of 10–20 percent of the company’s annual profit for the foreseeable future, provided that the surplus allows for it; in 2021, this amounted to 15 million kronor. “Annual profit” here refers to profit after financial items. This dividend is paid in accordance with Section 5, paragraph 1, of the Act on Public-Interest Municipal Housing Corporations and funds the municipality’s housing provision measures intended to promote integration and social cohesion, or measures that meet the housing needs of individuals for whom the municipality has a special responsibility. The dividend is paid to the parent company, Skövde Stadshus AB, which then passes the dividend on to the Municipality of Skövde.
Update 2025
In 2025, the City Council approved a new target level for the value transfer budgeted from Skövdebostäder to the City of Skövde. For the 2026–2028 planning period, the value transfer is budgeted at 30 million kronor per year, compared to the previous 15 million kronor. The actual value transfer is decided annually by the shareholders’ meeting and depends on the company’s financial results as well as the regulations governing municipal public-benefit housing corporations.
The decision does not change Skövdebostäder’s mandate to conduct its operations in a business-oriented and long-term manner and to continue investing in and managing the company’s housing units.