Estonian middle class moves to new residential suburbs
Tallinn middle class defined differently from Helsinki equivalent
By Raija Kaikkonen
Taking the highways out of Tallinn, either to the east or to the west of the city, one can see small roads branching off in different directions. They often lead to neighbourhoods of single-family houses that are being built for the city’s middle class.
Banks are willing to lend up to 90% of the purchase price of a new home for a period of 40 years, and interest rates are at a record-low level.
The only shortage is for good construction workers; when Estonia joined the European Union, the best professionals in the field took off for higher-paying building sites in Finland and Norway.
However, the middle class in Tallinn differs from that in Helsinki. In Tallinn, a person qualifies for the middle class if he or she earns well enough to live according to "the Western lifestyle".
This excludes most teachers, police officers, ordinary civil servants, and office workers.
The middle class is so excited about easily-available housing loans that Economics Minister Edgar Savisaar warned people in the late summer that bank interest costs could cause serious problems.
Key banking figures in Tallinn sharply disputed Savisaar's warning, saying in an article in the newspaper Eesti Ekspress that the Economics Minister does not understand anything about economics. The same paper also wrote that Savisaar’s family has debts amounting to 3.6 million kroon (EUR 230,000).
Differences in income in Tallinn are massive, and there are few social income transfers. There are no housing subsidies, and poverty as such is not grounds for getting a municipally-owned apartment.
As a result of extensive privatisation, a large proportion of Tallinn residents live in housing that they own themselves. However, some of them have difficulties in paying their utility bills, to say nothing of building repairs. On the other hand, repairs of buildings both in the centre of the city and in the suburbs have increased in the past few years. If an elderly resident cannot afford to take part in the repair costs, he or she may have to sell the home, unless the housing corporation shows good will and lets the old person stay.
When Jüri Mõis, a businessman, served as Mayor of Tallinn, he proposed the demolition of all Soviet-era housing in areas such as Lasnamäe, saying that the people there could move to private houses.
No apartment houses have been demolished, nor will they be. About half of Tallinn residents still live in the concrete suburban tenements. It is neither a source of shame, nor of status, as the price differences of housing in the different suburbs are fairly small.
There are groups of tenants in Tallinn dating back to the Soviet times, whose status Helsinki residents might find difficult to comprehend. In Estonia they are called "forced tenants".
The group emerged when Estonia became independent, and when the government returned buildings and lands to their former owners. Once a former owner was found - often living abroad - the tenant would get either a new landlord, or would have to move out.
After nearly 15 years they are having something of a difficult time because there is no limit to the rents that they can be charged. At first, rent controls were strict, but they have been slowly dismantled.
The forced tenants have been offered various incentives to become owners, but this has not helped most of them.
Compared with Tallinn, Helsinki gives large land areas to social housing production. Tallinn does not have land to give, nor does it have non-profit organisations to give land to. All social rental housing was built and owned by the city, and there is fairly little municipal production.
Helsingin Sanomat / First published in print 16.9.2005
More on this subject:
 Tallinn's wealthy live in isolated luxury
RAIJA KAIKKONEN / Helsingin Sanomat
raija.kaikkonen@hs.fi
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