@misc{9234966,
  abstract     = {{When purchasing a tenant-owner flat in Sweden, the buyer acquires a right of use rather than direct ownership of the property. The association collectively holds the mortgage, exposing members to a dual financial risk, their own mortgage as well as an indirect debt burden through the association's loans, reflected in monthly fees. The capital structure decision, whether debt is held collectively by the association or individually by its members, is primarily a consequence of differences in tax rules, amortisation requirements, and cost of capital.

This study examines how the capital structure of tenant-owner associations is valued by the market, and whether the debt in newly formed tenant-owner associations aligns with a value-maximising capital structure. Transaction data from Stockholm, Gothenburg, Malmö, and Uppsala during 2019 - 2024 is analysed using OLS regression, complemented by qualitative interviews with five actors from the industry.

The results confirm a statistically significant concave relationship between the debt-to-value ratio and total capital per apartment, validating the existence of an optimal capital structure. The value-maximising debt ratio is estimated at 0.116, with a 95% confidence interval of 0.095 to 0.137. Newly formed associations systematically deviate from this level, with debt levels exceeding the estimated optimum in developer-formed associations, while converted associations fall below it. The interviews reveal that capital structure decisions are primarily driven by external constraints, rather than active value optimisation. Bank credit assessments and the gap between construction costs and market values are the main factors driving capital structure decisions. A principal-agent problem is identified whereby developer incentives do not align with the long-term interests of future residents. The market's limited ability to price debt levels enables actors to deviate from value-maximising capital structures without penalty, constituting a systematic market failure.}},
  author       = {{Andersson, Anton and Gerdtsson, Eskil}},
  language     = {{swe}},
  note         = {{Student Paper}},
  title        = {{Optimal kapitalstruktur i bostadsrättsföreningar - Skuldsättning i nybildade bostadsrättsföreningar}},
  year         = {{2026}},
}