HS analysis|Helsinki should think about how it can bear more responsibility for the price of housing, writes HS journalist Katja Kuokkanen.
Is it can you afford to buy a home in Helsinki? Along with middle-income homebuyers, Helsinki’s office holders are now feverishly thinking about this.
The city suddenly has few means of influencing the fact that, for example, a Helsinki resident who earns no more than about 3,500 euros per month would be able to buy an apartment in his hometown.
The alarming change is revealed in the housing policy draft that the city is working on. It is about the housing and land use implementation program for the years 2024–2027.
Means construction of affordable apartments started to slow down a year ago. From the beginning of summer 2023, first the city and immediately after Petteri Orpon (kok) the new board made two decisive decisions.
Helsinki’s decision-makers abolished the slow, i.e., price-regulated owner-occupied housing production, which was criticized in many ways. Despite its problems, it has long made it possible to build owner-occupied apartments at cheaper than market prices without income limits for residents.
However, right after, Petteri Orpo’s government decided to end government interest subsidized loans for right-of-occupancy apartments. The decision practically slows down the construction of right-of-occupancy apartments in Helsinki.
And it was precisely the right to housing that Helsinki had managed to negotiate as a key way to ensure the construction of affordable homes after the slow pace.
One the new art is already a long way off.
Helsinki is finalizing a new kind of model for its own production, where a resident would be able to get into owner-occupied housing with savings of a few thousand euros.
HS news from the rent-to-own model on Monday. The homes would be rented apartments for ten years, and then when the state loan term expires, the home could be claimed as your own.
However, the model runs the risk of ultimately being disappointing. Although it reduces the need for initial capital, the combined costs of housing and the loan can eventually be close to buying a market-priced apartment. Only the moment of payment would be postponed.
Based on the city’s draft, housing costs would probably be at least more expensive than right-of-occupancy apartments.
Which in this case, the rent-to-own model would only solve part of the vacuum that Helsinki has fallen into.
Let’s look at the numbers. In recent years, one in five of all apartments completed in Helsinki has been a low-rise, partially price-regulated semi-low-rise or right-of-occupancy apartment.
There have been a similar number of Ara rental apartments from the entire production.
15 percent of the apartments started in Helsinki last year were right-of-occupancy apartments.
The rest of the apartments have been owner-occupied or rented apartments at market prices.
In recent years, slightly more than half of the city’s own housing production has been slow-moving or right-of-occupancy apartments.
Now I would have to get creative. The withdrawal of the Finnish government from active housing policy transfers the responsibility to the cities.
Without all this new affordable ownership and right-of-occupancy housing, the division of Helsinki’s residential areas into two threatens to intensify.
Having city dwellers living in different rental apartments and owning their own homes in the same areas helps to prevent alienation.
At worst, the paucity of mid-range apartments can lead to an escalation of problems and the shrinking of residential areas.
Civil service is concerned in the draft and emphasizes the uncertainty of future housing construction in Helsinki.
It mentions European cities where key workers in the service sectors can no longer afford to live within reasonable distances from their workplaces.
The rent-to-own model is now an attempt to create a new way for nurses, police officers and other middle-income earners to have access to their own apartment.
However, there is a draft income limit for new apartments of a maximum of 3,540 euros per month for one-person households and 6,020 euros for two-person households, and this limits the opportunity for several middle-income earners.
Another weakness of the new model is that the number of rent-to-own apartments may remain small. They are rented for ten years, and if the resident redeems their home, it turns into just owner-occupied housing.
Situation is not to be envied. As of this year, the city calculates that “intermediate housing production” will reach only one tenth of the total housing production.
The city must continue thinking and think about how, in the uncertain current situation, Helsinki can remain a possible home for as many people as possible.
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