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Investigator: Cost-based rent should be abolished

The criticized cost rent should be abolished. This is the opinion of the government's investigator, who instead proposes market rent for, among other things, the National Museum and the Royal Opera. The rent should, however, be adjusted according to the allocations.

» Updated: 03 December 2024, 13:51

» Published: 03 December 2024

Investigator: Cost-based rent should be abolished
Photo: Anders Wiklund/TT

Only the Opera, Dramaten, National Museum, Natural History Museum, and the State Historical Museum have the criticized cost-based rent, all five with properties built for their respective activities.

I want to emphasize the importance of taking this issue seriously. These are five very important cultural institutions and buildings, says investigator Albin Kainelainen at a press conference.

The goal of the cost-based rent has been to keep rents down. But the rent should cover maintenance and renovations, and the National Museum instead received a significant rent increase after the renovation for 1.3 billion kronor in combination with high inflation.

In a normal contract, the landlord covers the costs, but here the costs are passed on to the tenants, says Albin Kainelainen.

The cost-based rent has "likely" also contributed to necessary renovations being postponed, he notes. At the Natural History Museum, it went so far that the ceiling began to fall down.

Market-based

The investigator's proposal involves replacing the cost-based rent with market-based rents. The state grants will be adjusted simultaneously to neutralize the effects of the changed rent level.

It is very important that the grants are adjusted to compensate for the rent changes, says Kainelainen.

The Opera has a rent of 24 million kronor this year. With a market-based rent, the new rent level, according to a preliminary assessment, would be 103 million after the forthcoming renovation, but 230 million with the retained cost-based rent. For the National Museum, the current rent is 71 million, and with the proposed model, the rent would be 63 million.

"Better for all parties involved"

Albin Kainelainen sees no drawbacks to switching to a model with market-based rents.

In this case, I think it will be better for all parties involved, he says to TT.

Even if the model is introduced according to the proposal, it will mean high costs. Is the government willing to compensate?

The cost is already borne by the state, then the question is how to distribute it to get the right incentives to take care of the properties and the right conditions for the activities. This is actually a question of what models you should have, says Finance Market Minister Niklas Wykman (M).

The investigator proposes that the changes should take effect on January 1, 2026. The government will now take a stance on the proposal.

In 2001, a so-called cost-based rent was introduced for the Opera, Dramaten, National Museum, Natural History Museum, and the State Historical Museum.

This means that the tenant pays the State's property agency costs for operation, maintenance of the properties, administration, and capital costs, including depreciation for investments and interest costs. All renovations are paid for through the rent.

Another model is market-based rents, which were introduced in 1993 for state buildings, including museums. Most cultural institutions rent from SFV and pay market-based rent.

Even the previous government appointed an investigation that concluded that market-based rent would be better for the five institutions that currently have cost-based rent.

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By TTThis article has been altered and translated by Sweden Herald

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