This report explores an alternative housing policy to Sweden’s overpriced and problematic housing situation. Research has revolved around how flexible frameworks of Swedish regulations and standardizations in the housing policy can improve sustainability through planning participation and self-building processes. Analysis has been conducted primarily through literature reviews and fieldwork where case studies have been compared relative to how participatory methods and self-built housing construction have been pertinent for their local development in the housing policy. The results provide urban housing solutions that contribute to diverse residential areas and reduce segregated neighborhoods. Furthermore, it demonstrates comprehensive social sustainabilities when residents have actively participated in the planning and construction of their neighborhood. An increased knowledge accumulated from participating and self-building also results in economic and environmental sustainability. This report strives for solutions to complex building regulations and standardizations, which must be adjusted for non-professionals. However, the results showed the difficulties in achieving a system change since political oscillations obstruct an alternative housing policy by concentrating on economic growth. Although there are difficulties within the economic-political systems, the analysis of the case studies reveals the potentialities of collaboration between municipalities and autonomous neighborhoods, which have been formulated through exceptional regulation plans. By reconsidering development where the economy is not at the center, the research demonstrates how municipalities can achieve social, ecological, and cultural growth by implementing an alternative housing policy to the existing one. These values are outcompeted by economic growth and must be re-established in society to achieve democratic sustainability. The current housing affordability crisis stresses the importance of alternatives for an equity housing policy, where self-building and participatory design methods must be accentuated in urban development in Sweden. The result of this report can operate as a platform for innovative housing development within urban contexts for self-builders and municipalities.