Thousands face huge rent increases in Helsinki region

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Thousand of residents in the Greater Helsinki area will have to pay huge rent increases in the next few years.
     
Housing corporations Sato and VVO intend to raise the rents of their government-subsidised ARAVA flats to the level of the market rates as soon as the apartments have been removed from rent regulation.
      Espoo resident Anni Uuskoski, 82, has lived in her 3-room rental home in Tapiola’s Jousenkaari in Espoo for the last 49 years, raising her three children there.
      Over this period her landlords have included insurers Ilmarinen, Pohjola, Suomi-Yhtiöt, and Sato.
     
Now the present landlord Sato has decided to raise the rents of 90 apartments in Jousenkaari, which means that for example Anni Uuskoski’s rent will climb from EUR 701 to EUR 758 in 2009. In 2010 it will be EUR 819. Some of her neighbours are facing even steeper hikes.
      It is a huge sum for pensioner Uuskoski, whose monthly income is only EUR 1,145.
     
Director Juha-Pekka Järvenpää from Sato reported that the company pursues the so-called ”good renting practice” that is being used in the field. According to this practice, annual rent increases must not exceed 15 %.
      ”We have sought a customer-friendly approach, staggering rises over several years. Of course we could also terminate a rental agreement and compile a new one using market rates”, Järvenpää argued.
      Anni Uuskoski had another opinion of Sato’s customer-friendly approach. ”This is barefaced robbery”, she snapped.
      Uuskoski’s son lives next door, and his rent is now EUR 400, but in five years it will be EUR 778, according to Sato.
      Director Järvenpää admits that in some cases rent increases may be large, if those apartments have long enjoyed very low rents and if major renovations have been made or will be made in them.
     
The Central Union of Tenants has expressed strong criticism against such huge rent increases, regarding the situation as morally wrong.
      ”These non-profit corporations have been given government subsidies, so-called ARAVA loans, and now that the apartments are to be removed from rent regulation, the companies intend to use them as cash cows”, charges Ilpo Eerola from the Central Union of Tenants.
      Sato’s Juha-Pekka Järvenpää claims that the company has not benefited from the state subsidy, as it has bought the ARAVA apartments from another corporation which initially had them built.
      The 82-year-old pensioner does not appreciate Sato’s profit-making.
      ”They advised me to apply for a higher housing allowance, but I do not want to do so, as the money would go straight to Sato’s coffers”, Uuskoski argues.
      The rents of apartments have risen sharply over the current year. The market rates for flats increased by 5 % on average in July through September, while the rents for ARAVA apartments rose by 3.9 % from last year.
     
The rents for the City of Espoo’s ARAVA rental flats were raised by 7.6 % on average from the beginning of the current year. Moreover, another rise of 6.4 % on average has already been scheduled for the beginning of 2009.
      VVO, another company providing housing services, plans to make exactly the same rent increases. A total of nearly 2,000 VVO apartments will be removed from rent regulation across the country next year. However this will not lead to additional rent increases, according to VVO director Eero Saastamoinen.
      In Helsinki and Vantaa the raising of rents for their city-owned rental apartments next year is still being considered.


Previously in HS International Edition:
  Increasing number queueing for city-owned rental apartments in Helsinki (2.6.2008)

Links:
  VVO
  Central Union of Tenants
  Sato

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