No new rental apartment construction started in Helsinki this year so far
Construction of ordinary rental apartment houses has come to almost a complete stop in the Helsinki region. Not a single construction project for rental apartments has been launched in Helsinki or Vantaa this year so far. In Espoo work started on only one rental apartment building with 51 flats.
No changes are expected yet this year. The Housing Finance and Development Centre of Finland (ARA) has earmarked funding for 240 rental apartments in Helsinki and 71 for Vantaa.
There has been support applications at all for Espoo up to the beginning of August.
The state has set aside resources for the construction of 2,500 rental apartments nationwide. However, Hannu Ahola, a housing market expert at ARA, says that it is unlikely that more than 1,500 apartments will be built. He also says that many experts are making off-the-record predictions that there will be only 1,000.
Seppo Kallio, managing director of Espoonkruunu, the rental housing company of Espoo, says that the figures are "pathetically small", adding that it seems that a letter of intent signed by the state and 14 municipalities in the Helsinki region are impossible to implement.
The agreement sets a target of 12,000-13,000 new apartments, 2,400-2,600 of which should be state-subsidised rental housing.
"The production of moderately priced rental apartments has been left completely up to local authorities", says Markku Leijo, head of the Housing Division of the Real Estate Department of the City of Helsinki.
Meanwhile, the waiting list for people in need of rental accommodation is growing both in Helsinki and Espoo, which is no surprise to the decision-makers. Foreign people mainly move to the Helsinki region, and most of them have to rent, as they cannot afford to buy their own house or apartment.
"Now many might have to spend half of their take-home-pay on housing. Even from the point of view of the national economy it makes no sense that they can afford little else", Leijo says. He feels that the City of Helsinki would need to double its own housing production to avert a crisis.
The situation is difficult also for Minister of Housing Krista Kiuru (SDP).
A year ago Kiuru promised new rental apartments with a rent at least two euros less than existing units. Now moderately-priced rental apartments are not being built.
Previously in HS International Edition:
Shortage of rental apartments looming in Greater Helsinki area (21.8.2012)
Housing prices in Helsinki are getting out of hand (5.1.2012)
Cost of housing takes a big bite out of people’s wallets in Southern Finland (13.6.2007)