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An aerial view of a residential area in Vantaa on 2 March, 2018.
An aerial view of a residential area in Vantaa on 2 March, 2018.

 

Ex-Minister of Social Services Osmo Soininvaara (Greens) has continued his ruminations on the problems associated with the rental housing market in Finland.

The City of Helsinki, he proposes, should establish its own rental housing company that would account for considerably more of the housing production than the 20 per cent accounted for currently by the Housing Finance and Development Centre of Finland (ARA).

“The company would rent out flats at market-based prices with the intention to drive down market-based prices with the supply. The rents would be such that encourage long-term tenancy agreements, but you would not have to wait for the flats,” he wrote in his blog on Sunday.

“The rental housing company would generate substantial profits, similarly to the numerous special-purpose rental housing companies today. The city would earmark the profits for increasing the housing supply,” he envisioned.

Soininvaara also proposed that the city’s rental housing assets be re-organised under a rental housing company to allow for their sales to tenants.

“Our tax policy has been designed in a way that people who have selected the home-ownership path will have paid a lot less for housing during their life than people living in rental flats. This more affordable form of housing should also be available to low-income people. That is why the flats should be sold to tenants,” he explained.

He estimated that there are several examples from large European cities of how social housing production has helped to ensure housing costs do not spiral out of control for anyone. What the examples have in common, he added, is that housing production has kept pace with the growth of the city, thus spurring the growth further.

“If housing production keeps pace with the growth of a city, also market-based solutions will work well. Housing policy works when there is no shortage of flats – and only then,” he said.

The combination of housing shortage and price regulation, on the other hand, is undesirable, according to Soininvaara.

“You will either have to wait unreasonably long for a flat or there is an unofficial way to distribute the scarcity. In Stockholm, children are entered into the housing queue at birth and due to a shortage of reasonably priced flats in the city centre, the political elite has decided that the public will enjoy the flats through their representatives. Others have to settle for black-market options that are bordering on being illegal.”

Aleksi Teivainen – HT
Photo: Vesa Moilanen – Lehtikuva
Source: Uusi Suomi

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