The housing stock in Helsinki offers many kinds of housing on strongly varying economic and administrative conditions. The present study draws a picture of the provision and the properties of various forms of housing in the city. It also analyses to what extent various forms of support to make housing more affordable have been targeted on various population groups. In addition, owner occupied housing is analysed separately, because this sector shows the greatest variation in price, regulation and finance.

The studies end up in an analysis of the incidence of housing costs, an analysis that compares the relationship between housing costs and the income distribution of the population. Although Helsinki residents have a higher level of income than Finns at large, they have to spend a greater share of their disposable income on housing than the average Finn. This is true especially of those who live in owner-occupied homes, but also of those living in free market rented homes.

Markku Lankinen’s study of housing alternatives and costs is part of Helsinki City’s Research Programme for the years 2004-2006.

The study presents a calculation model for monitoring how prices of price-regulated and market owner-occupied dwellings influence housing costs on various conditions and in the long term. On the basis of current purchase prices, a comparison of prices in the two variants is made.

A crucial finding is that it is cheaper (per square metre) to buy a home in the cheapest neighbourhoods in Helsinki than to be a tenant in an average city-owned rented flat. This finding is explained by two factors: 1) the low level of interests in the euro area and 2) the right to deduce housing mortgage interests from your taxable income.

The studies end up in an analysis of the incidence of housing costs, an analysis that compares the relationship between housing costs and the income distribution of the population. Although Helsinki residents have a higher level of income than Finns at large, they have to spend a greater share of their disposable income on housing than the average Finn.

To find out what kind of housing costs various types of households have, the income distribution and its trends among households in Helsinki is studied. When the findings are applied on our material, the result is that around 40% of all families would pay more than 20% of their gross income for housing if all rents were at the same level as council rents. Since 60-64% per cent of pensioners live in owner occupied dwellings, low-income earners are underrepresented in our material. In the “periphery of the market”, there are still some competitive alternatives (in terms of costs) to regulated and social housing available on the market in Helsinki – but not too many. A key issue for making families and other households stay in Helsinki is to increase the provision of reasonably-priced housing in the city.

The City of Helsinki Urban Facts
Finland
http://www.hel2.fi/tietokeskus
Mr. Markku Lankinen (Senior Researcher), tel. +358 9 169 3111

01/06/2006

Markku Lankinen

research

Urban Policy > Housing > Housing policy

Housing market