State to subsidise construction of rental housing in Helsinki region
Plans are under way for the state to subsidise the construction of rental accommodation in the Helsinki region. The aim is to reduce rents for new rental apartments in order to make them more affordable for those with low incomes.
Under the proposal, the state would seek to close the gap in housing costs between the Helsinki region and the rest of the country by paying a subsidy of EUR 10,000 for the construction of a new rental apartment. The subsidy would amount to EUR 200 per square metre for an apartment of 50 square metres, and EUR 250 a square metre for a flat of 40 square metres.
Currently, housing rents in Helsinki are about 10 per cent higher than in Tampere, and nearly 20 per cent higher than in the east of Finland.
Local authorities, meanwhile, are calling for bigger subsidies. They feel that rents need to come down by at least one euro per square metre of living space, and preferably two.
At current costs, rent per square metre is between EUR 14 and 15 in the Helsinki region.
Local authorities in the region calculate that a subsidy of EUR 28.000 for the construction of an apartment would bring down rents by EUR 1.80 per square metre.
Previously state subsidies of up to 30 per cent have been available for the construction of housing for special groups, such as senior citizens and the disabled.
The state is demanding that local authorities hand over reasonably priced parcels of land for use as rental housing.
The state and the 14 local authorities in the region are working together on a housing policy action programme for the Helsinki region. The government is to issue a decision on the matter in January 2008, and in the spring, the local authorities are set to sign a document of intent.
The aim of the state-municipal cooperation is that 20 per cent of all new housing production would involve rental properties.
Municipalities in the region have agreed on the construction of 12,000-13,000 new apartments a year, up from the present annual rate of 8,500. Only a few hundred of these would be state-subsidised rental housing.
In another scheme to promote construction of new rental properties, the state plans to lift the tax on housing investment funds, which have previously served as an impediment to setting up such funds.
A precondition for the tax-free status is that the funds would be used to pay for the construction of new rental housing financed on the free market.
The investment funds would offer a way for ordinary citizens to invest in rental housing without having to actually own property and rent it out.
Under the proposal, the state would seek to close the gap in housing costs between the Helsinki region and the rest of the country by paying a subsidy of EUR 10,000 for the construction of a new rental apartment. The subsidy would amount to EUR 200 per square metre for an apartment of 50 square metres, and EUR 250 a square metre for a flat of 40 square metres.
Currently, housing rents in Helsinki are about 10 per cent higher than in Tampere, and nearly 20 per cent higher than in the east of Finland.
Local authorities, meanwhile, are calling for bigger subsidies. They feel that rents need to come down by at least one euro per square metre of living space, and preferably two.
At current costs, rent per square metre is between EUR 14 and 15 in the Helsinki region.
Local authorities in the region calculate that a subsidy of EUR 28.000 for the construction of an apartment would bring down rents by EUR 1.80 per square metre.
Previously state subsidies of up to 30 per cent have been available for the construction of housing for special groups, such as senior citizens and the disabled.
The state is demanding that local authorities hand over reasonably priced parcels of land for use as rental housing.
The state and the 14 local authorities in the region are working together on a housing policy action programme for the Helsinki region. The government is to issue a decision on the matter in January 2008, and in the spring, the local authorities are set to sign a document of intent.
The aim of the state-municipal cooperation is that 20 per cent of all new housing production would involve rental properties.
Municipalities in the region have agreed on the construction of 12,000-13,000 new apartments a year, up from the present annual rate of 8,500. Only a few hundred of these would be state-subsidised rental housing.
In another scheme to promote construction of new rental properties, the state plans to lift the tax on housing investment funds, which have previously served as an impediment to setting up such funds.
A precondition for the tax-free status is that the funds would be used to pay for the construction of new rental housing financed on the free market.
The investment funds would offer a way for ordinary citizens to invest in rental housing without having to actually own property and rent it out.
Helsingin Sanomat