Furniture and boxes in the foyer of a block of flats in Helsinki in December 2020. Helsinki City Housing Company (Heka) is losing out on about a million euros in rental income every month due to an unusually high number of vacancies, reports Helsingin Sanomat. (Emmi Korhonen – Lehtikuva)

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ALARMING DETAILS have emerged about the largest lessor in Finland, Helsinki City Housing Company (Heka), reports Helsingin Sanomat.

Helsingin Sanomat on Tuesday revealed that Heka has roughly 1,500–2,000 vacant rental units at the same time as roughly 10,000 people are waiting to hear back on their apartment application – a mismatch the newspaper interpreted as sign of ineffective application procedures.

Vacant units are found on, for example, Gunillanintie in Laajasalo, Koroistentie in Ruskeasuo, Kontulankaari in Kontula and Pukinmäenkaari in Pukinmäki.

Information obtained by the newspaper also reveals that the city-owned company has at least dozens of units that have been vacant for as long as two years after undergoing basic renovation.

Heka has a catalogue of roughly 54,500 rental apartments, making it the largest lessor in Finland. Päivi Jokinen, the director of customer relations at Heka, told Helsingin Sanomat that the company is losing out on roughly a million euros in rental revenue every month due to vacancies, making every vacancy “a serious matter”.

“Vacancies are very regrettable for Heka. We’re also aware that there’s a need especially for reasonably priced subsidised rental units in the city,” she said.

Heka in 2023 reported around 488 million euros in revenue. Helsingin Sanomat wrote that an injection of additional revenue would be welcome for the company, given the financial strain created by rising interest rates on its roughly three-billion-euro debt burden. With the company adhering to the cost rental principle, an increase in the number of vacant units results in an increase in rents.

“The goal is to have tenants in all apartments. Almost all of Heka’s revenue comes from rents,” said Jokinen.

Indeed, the pressures created by soaring interest rates prompted the company to raise rents by an average of eight per cent last year. The average raise was four percentage points lower than expected after local policy makers agreed to allocate 17 million euros for supporting the company.

Despite the rent hikes, the rents remain over a third lower than average in Helsinki, according to Jokinen.

Heka itself is not responsible for matching applicants with rental units. The selection is instead made by employees in the housing services unit of Helsinki’s Urban Environment Division. On Monday, the unit was aware of roughly 1,515 vacancies, director Kati Hytönen stated to Helsingin Sanomat.

While she denied that apartments can be vacant for years, she confirmed that the number of vacancies is presently higher than usual. One reason for this is that a growing share of applicants started to turn down the apartment offers at the end of last year, with the share rising to over 60 per cent in May.

“This coincided with the rent hikes at Heka,” she said.

Heka has also registered a sharp drop in the number of applicants, from about 23,000 in 2020 to 10,000. Hytönen said the diminishing interest is also attributable to the situation in the rental market at large, namely the healthy supply of reasonably priced private rental units. Simultaneously, the government decision to cut the general housing allowance has eroded the ability of some tenants to pay their rents.

Aleksi Teivainen – HT

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