Shortage of Affordable Housing in Malmö: Implications of Shaikh’s Theory of Real Competition for Housing Research

This paper analyses structural economic forces contributing to the current undersupply of affordable housing in Sweden’s third-largest city, Malmö. It operationalizes Anwar Shaikh’s theory of relative prices to analyzethe political economy of housing shortage. The paper argues that existing policy recommendations at the municipal level are primarily informed by a microeconomic approach to price formation that focuses solely onsupply and demand dynamics. Furthermore, it contends that much of the literature criticizing these policy recommendations fundamentally shares the core assumptions of the microeconomic perspective, treating thehousing shortage merely as a distributional issue. In contrast, this paper asserts that the problem is rooted in how housing is produced. Drawing on Shaikh’s theory of relative prices, the paper differentiates between various types of investments and their associated profit formations that determine the final price of housing as a commodity in market economies. These investment types connect macro-level land and construction dynamics to micro-level housing consumption and inequalities. Finally, the paper presents empirical observations andexplores the practical and strategic implications of Shaikh’s theory of relative prices for understanding the current housing shortage and inequality in Malmö, as well as the conflicts of interest between public and privateactors involved in housing production.