Helsinki is now pushing extraordinary means for housing sales: If the construction of the plot is delayed, the construction company should lower the price.
Helsinki the city has woken up to the bottom of the housing market, and is now using its own means to speed up construction and achieve the city's annual goal of 8,000 new apartments.
To save the situation, a few actions are now being proposed, for example lowering the price of apartments in certain situations.
On Tuesday, the Urban Environment Board will discuss plot policy principles and measures, the purpose of which is to promote housing construction in a “changed market situation”.
In the background, there is a concern that has arisen in the city about the decline of the housing market. Inflation, rising construction prices and interest rates, and low consumer confidence have affected it, the city's presentation states.
Housing construction has declined in Helsinki. For example, in Sompasaari and Kalasatama, about ten sites that already had a building permit have not been built. At the same time, ready-made apartments in new buildings cannot be sold everywhere.
As means to improve the situation, the city proposes, among other things, new conditions for extending the reservations of plots planned for owner-occupied housing.
In the future, the reservation of such a plot would only be continued if the person reserving the plot can reliably demonstrate that they have promoted the sale of apartments by “active marketing and pricing methods”.
The calculation of the price is stated in the presentation as follows:
“In practice, the plot reserver must therefore be able to demonstrate that the price of the apartments has been reduced to promote sales and that additional investments have been made in the marketing of the apartments.”
In the future, plot reservations would be extended for a maximum of one year at a time, and at the same time interim goals would be agreed with the reserver, failure to comply with which could lead to cancellation of the reservation.
As new as a measure, the city also presents a more positive attitude than before to changes in the form of financing and management of plot reservations in those cases where the changes would promote the development of the plot.
This means that, for example, a plot of land designed for rental housing could be given over to the production of owner-occupied housing.
According to the proposal, changes would always be evaluated on a case-by-case basis.
In addition to that, no new plot reservations would be allocated for right-of-occupancy production, unless the person seeking a reservation can demonstrate that the project has realistic conditions to receive a government interest subsidy decision.
In the future the city wants to increase housing production by increasing price competition, so that the city could get more money from the plot.
According to the city, this is the best way to ensure market-based pricing of plots.
Through price competitions, the city also receives up-to-date price information for its plots, the presentation states.
The city is also preparing to sell lots instead of renting them, in order to provide owner-occupied housing in the so-called urban renewal areas. The urban renewal areas include Kannelmäki and Meri-Rastila, and the aim is to increase the number of owner-occupied apartments in these areas.
In other areas, we are also preparing for the possibility of selling plots instead of renting them. However, those interested in the plot should be able to demonstrate that the sale of the plot would contribute to the rapid completion of construction.
A year During 2023, by the end of September, the construction of nearly 4,000 apartments had started in Helsinki.
Last fall, the city had plots reserved for the construction of approximately 30,500 apartments. For about a quarter, the zoning process was still in progress.
Although the situation in Helsinki in terms of construction is better than the rest of the country, we are falling behind on the goals.
If the new plot policy measures are approved in decision-making, they will probably be valid until the end of 2025.
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