What major cities like London can learn from Norwegian public-private housing collaboration

november 16, 2022 5 min reading time

While the UK wrestles with the stunning news that the average house price rise is now higher than the country’s average annual salary, in Norway’s capital Oslo an ambitious state backed new city-wide model has just been created which could solve the problem of housing affordability at a stroke.

A consortium including the Oslo municipality and urban investor Nrep has been created to bridge the gap between the private homes for sale market and social housing for those who need state support for the provision of a home.

Just like in the UK, and especially within London, where real estate adviser Savills has revealed that the number of property millionaires has risen by 36% in the last year and almost 700,000 homes are worth £1 million or more, the divide between people who own their home and those who don’t is growing ever wider, with significant negative economic and social consequences.

In Oslo not owning your own home is also considered to be a significant factor that inhibits the social and economic development of the city and its inhabitants.

This is becoming a particular problem for the city as it struggles to attract and retain not only traditional key workers such nurses, firefighters, teachers and other public employees who literally keep the city alive, but also many thousands of other workers who are vital to supporting the wider economy and yet who are being literally being priced out.

As former mayors of Helsinki and Copenhagen, presiding over the respective cities’ housing strategies for almost 20 years between us, we saw these problems playing out across the Nordic region, and know it is an issue across much of the world.

However, unlike London, the city of Oslo has taken the decision to address this critical issue on a city-wide basis through the creation of a bold and ambitious municipally driven housing company which seeks to dramatically increase the availability of discount to market housing.

The new company, Oslobolig, has been established with the objective of purchasing newly built homes from developers (with a quantity discount build in) which are then offered for resale to qualifying residents either priced out of the market, or who do not qualify for state supported housing.

In a prime example of public private partnership, in addition to the involvement of the Oslo municipality, Oslobolig is also backed by Norway’s biggest housing developer OBOS, the state-owned railway infrastructure company Bane Nor and Norway’s biggest financial services group DNB and real estate investor and innovator Nrep.

Rather similar to shared ownership in the UK, only this time delivered by one company on a city-wide scale, would-be homeowners are able to purchase a minimum stake of 50% at market value of a property, with the ability to purchase additional equity up to 100%.

On the remaining equity the purchaser pays a rent to Oslobolig at an equivalent market rate which is then recycled back into the scheme.

In a further option to accelerate equity shares Oslobolig is considering the potential for a price regulation whereby the purchaser can buy into their home at cost price, without an uplift adjustment, within a defined period of time to enable a greater share of equity to be obtained and subsequently less rent to be paid.

Overall, the assumption is that the majority of purchasers will increase their equity stakes up to 100%, though with consideration given that due to the nature of the target buyer not everyone will be willing or able to do so. In those circumstances the equity split will remain until the property is sold on the open market.

The long-term aim of Oslobolig is that at least 20% of the housing within Oslo is affordable, thereby unlocking the full economic potential of the city and delivering genuine social opportunity.

In addition, Oslo municipality is also exploring the possibility of setting a requirement for large parts of the city to be developed and sold through Oslobolig, with a minimum of 1,000 new dwellings being made available to this key target group by 2023.

This is just one tool through which Europe’s affordable housing crisis can be fixed – in cities other than Oslo regulations may not allow a model like ours.

But only by thinking laterally and with a range of ideas stretching across different models can we help not only key workers but also the young people in vital emerging industries who will be in the vanguard of the return to cities that we all yearn for after the COVID-19 pandemic.


Jens Kramer Mikkelsen was Copenhagen’s longest serving Mayor (1989-2004) and is currently Director of Urban Development at Nrep. Jan Vapaavuori formerly held the public Finnish roles of Minister of Economic Affairs, Minister for Housing and Mayor of Helsinki. He has also served as Minister of Nordic Cooperation and is currently a Senior Advisor for Urban Development at Nrep.

Published: november, 16 2022