STOCKHOLM—For more than a dozen years, a major project to redevelop the Royal Seaport with thousands of new homes and offices in proximity to the water and city center has been under way.

The seaport has long been an important industrial and transportation hub, with an oil depot, container port and ferry terminal. But housing is desperately needed in the Swedish capital. Ample job opportunities and a desirable city center have made it the second-fastest growing city in Europe, behind Oslo.

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