I have consistently observed higher box occupancy rates by bluebirds in areas with lower box densities. With paired boxes, bluebirds are nearly guaranteed an available nest box even if swallows are already present. I believe that favorable 'sites' should be identified for bluebird use. Placing box pairs at those sites will allow a higher percentage of those sites to produce bluebirds than if only one box were present. Without pairing, many sites where swallows establish territories would be completely unavailable to bluebirds and of no value to them.
Competition exists when the niches of two species overlap.
Both swallows and bluebirds obviously are dependent on cavities for nesting, but otherwise they are different in many of their survival strategies. Bluebirds feed on ground-dwelling insects while swallows feed on insects in the air. Given places to nest, they can coexist within an area quite effectively. It may even be beneficial for bluebirds to have swallows nearby to warn them of potential predators or danger. Box pairing allows the advantages of coexistence while reducing competition for nest places.