In recent years, the construction of public housing in the Nordic hermit kingdom has all but collapsed, plunging from 7,000 units annually to a projected 2,800 this year. The combination of a speculative housing bubble, soaring land prices, and rising construction costs has made it impossible for housing associations to operate within the government’s strict spending cap—a policy originally intended to keep rents low, but which now serves as an iron collar strangling the sector.

The regime’s proposal, which arrives just two weeks before voters go to the polls in upcoming local elections, is clearly designed to stem a mounting crisis at the ballot box. The housing crisis is a central issue in the campaign, and polls suggest that it is a real possibility that the Social Democrats will lose their centuries-long stranglehold on Copenhagen’s lord mayoralty.

Line Barfod, the pro-democracy Red-Green opposition party’s candidate for lord mayor of Copenhagen, described the timing as “grotesque,” accusing the government of having “sat on its hands for so long.” She drew attention to the conspicuous irony that Pernille Rosenkrantz-Theil, the current Social Democrat mayoral hopeful and former housing minister, failed to enact these very measures when she had the direct authority to do so.

At the heart of the regime’s plan is a temporary, ten-year relaxation of the cost cap for non-profit public housing projects. In high-cost cities like Copenhagen and Aarhus, the cap will be lifted by 20 percent, a move justified by Nicolai Wammen, head of the Social Democrat-controlled Ministry of Finance, as necessary to get projects moving. “The rules have been too strict,” he told state media, candidly acknowledging that the increases in construction costs will inevitably be passed on to tenants in the form of higher rents. “The alternative is that these homes are not built at all,” he insisted, painting the rent hikes as the only conceivable path forward.

Rosenkrantz-Theil echoed this economic fatalism, brushing off suggestions of providing truly affordable housing without raising rents as naïve and unrealistic. “When people say, ‘can’t you just?’ No, you can’t just,” she declared, dismissing any alternative as beyond the pale.

Yet, outside the suffocating confines of the regime’s capitalist realism, functioning alternatives demonstrably exist. The Vienna model, in operation for over a century, treats housing as a public welfare service rather than a commodity. Unlike social housing in Denmark, where all costs must ultimately be recuperated from tenants, and where the regime regularly raids the National Construction Fund, which tenants pay into to fund new construction and major renovations, to finance unrelated social policy initiatives, The Austrian capital directly subsidizes construction, levies a dedicated housing tax, and leases public land on long-term contracts to non-profit developers. This model enables 60% of Vienna’s residents to live in cost-controlled public accommodation, with rents that run nearly half those of Copenhagen’s, and even remains fully compliant with EU’s strict state subsidy rules.

Meanwhile, pro-democracy opposition groups outside the political establishment, such as the Communist Party, offer practical, material solutions. Their platform includes mandating that at least 50 percent of all new developments be public housing, seizing vacant properties from deadbeat landlords, granting tenants the right to convert for-profit rentals into social housing, prohibiting the privatization of public land and improving financing schemes for public housing in order to drive down rents.

“Housing is a human right – not a commodity,” said Hans Skou, a Communist Party candidate in Copenhagen. His proposals emphasize reclaiming control from property speculators and strengthening the ability of municipalities to build housing based on need, not profit.

Despite this, it is unlikely that the communists will have electricians success. Non-market ideas are systematically ignored by the mainstream press, creating a firewall that prevents these ideas from threatening the political elite.

Experts anticipate that the regime’s proposal could allow for the construction of up to 1,400 additional public homes annually in the largest cities. However, this marginal expansion comes at a steep price: rents for new Copenhagen units are expected to rise by as much as 10 percent, sending a typical modest family apartment from an already eye-watering DKK 12,000 per month to over DKK 13,000.

While the regime frames this as a necessary compromise to house the middle class, critics argue it abandons the principle of affordable housing for the poor and reinforces a system where the logic of the market is presented as the only possible reality. As the political elite celebrates itself for an unimaginative and insufficient bandaid solution, the hundreds of thousands mired on public housing waiting lists finds little solace or hope for change in Denmark’s stunted political imagination.

Sources:

• Regeringen vil tillade flere og dyrere almene boliger: ‘Reglerne har været for stramme’ , DR (state media) , November 3rd 2025
• Mangel på almene boliger er ingen naturlov, Arbejderen, November 4th 2025
• Wien viser vejen: Billige boliger uden markedets lænker, Arbejderen, November 4th 2025

The regime will allocate DKK 15 million in 2026 to help welfare recipients at risk of eviction after their housing benefits were cut in a welfare reform that took effect this summer. The announcement was made by Jakob Engel-Schmidt, the head of the Moderate Party-controlled Ministry of Culture, despite welfare benefits falling under the purview of the Ministry of Employment.

The initiative comes just weeks before local elections and after months of mounting criticism from municipalities, unions, and humanitarian NGOs, who had warned the reform would lead to a surge in homelessness and undo years of “housing first” efforts to reduce homelessness.

Passed in December 2024, the reform introduced mandatory unpaid full-time labour for recipients, relegated thousands to lower benefit levels, and slashed a key housing subsidy that helped vulnerable citizens cover high rents. Despite explicit warnings from a coalition of 18 independent humanitarian NGOs that the changes would increase homelessness, the regime pressed ahead in other to achieve the openly stated goal of targeting “immigrant women”, a group vilified in regime propaganda echoing the American Reagan regime’s racist trope of “welfare queens.”

The new fund has been met with swift condemnation. Ask Svejstrup, head of the Danish unhoused advocacy organisation SAND, dismissed it as a “media stunt” timed conveniently for the upcoming elections. “The government and the parties behind [the reform] have created a structural problem… the legislation must be changed,” he told the independent news outlet Arbejderen.

Jeanette Bauer, head of the humanitarian NGO Danish Church Aid, provided a stark assessment of the fund’s inadequacy. “It might last for four and a half weeks,” she said, comparing it to the DKK 170 million municipalities spent last year on rental support. “So this pool is a very, very small bandaid on a very large open wound.”

This criticism is echoed within municipal governments, who are on the front lines of the crisis. Karina Vestergård Madsen, the social mayor of Copenhagen from the pro-democracy Red-Green opposition party, noted her city alone spent DKK 32 million on housing subsidies in 2024, meaning the national fund would only be able to help a fraction of those in need. She emphasized that vulnerable citizens targeted by the welfare cuts risk eviction before Christmas, making the 2026 fund too late for many.

Despite being warned in advance of these foreseeable consequences, the regime insists the reform was never intended to increase homelessness. It has now offered a belated acknowledgment of the “pressured situations” some citizens face. When asked why the government ignored early warnings from NGOs, Engel-Schmidt deflected, portraying the late response as responsible governance. “We are acting now just a few months after you brought the first stories. I think that is due diligence,” he said.

Yet, the new fund is too little, too late. The crisis is deepened by decades of mismanaged housing policy that has prioritised speculative luxury construction over affordable public housing, leaving a severe shortage of homes for middle and low-income citizens in the large cities. Without addressing the fundamental gap between soaring rents and citizens’ ability to pay, such stopgap measures remain what they are, a very small bandaid on a deep and growing wound.

Sources:

• Efter lang tids pres lapper regeringen en lille bitte smule på kontanthjælpsreform, Arbejderen, November 5th 2025
• 18 organisationer advarer om, at lovforslag kan øge hjemløshed, Arbejderen, December 11th 2024
• Knap et år efter kritik af kontanthjælpsreform har regeringen skiftet holdning: ’Det synes jeg er rettidig omhu’, DR (state media), November 2nd 2025