Affordable Helsinki


Curbing the price level

Should we build small rental apartments, family apartments, or large, luxurious apartments, which attract so-called good tax-payers to Helsinki?



Housing is extremely expensive in Helsinki. Especially small rental apartments and studios are very expensive, because their supply does not meet the high demand. Their prices per square meter are much higher than those of large apartments.

The best way to curb the cost of housing is to construct more apartments, especially the kind of apartments that are far too few to meet the demand. Year after year Helsinki fails to build new apartments fast enough.

Time for small apartments

The easiest land plots have already been used, so now we should be able to give up something else to get more apartments. We must also choose, who we build new apartments for. Should we build small rental apartments, family apartments, or large, luxurious apartments, which attract so-called good tax-payers to Helsinki?

About half of the households in Helsinki are one-member households, such as students, pensionaires and singles. This should also affect the city’s housing policy.

However, politicians direct construction companies to build larger apartments. Another factor that raises the prices of apartments is the obligation to build expensive parking slots. Everyone who buys an apartment sponsors them with about one thousand euros per square meter, regardless of whether they own a car or not. This, of course, also affects the rent level.

Tax competition must stop


Politicians are afraid that if Helsinki plans apartments according to what is needed most, the best tax-payers will escape to Espoo or other neighbouring municipalities. This is the most important reason why municipalities should merge. A structure that forces municipalities in the same area to compete for tax-payers leads to short-sighted taxation and housing policies. All municipalities have to build large apartments and reduce taxation even when the need for opposite policies is evident.

Some municipalities take this policy further than others, and as a consequence well-off and disadvantaged people end up living in different parts of the region. The strong division to good and bad areas causes a vicious circle: some areas become notorious, in some you cannot walk alone by night, and they lack services. People of different income levels become detached from each others’ realities and unable to empathise with each other. The tax competition makes municipalities unable to provide sufficient services and ensure social justice.

To ensure that more people can afford to live in Helsinki in the future:

  • Metropolitan municipalities must merge in order to reduce tax competition and start to plan the metropolitan area as one entity
  • More apartments must be built, taking the needs of all sections of the population into account
  • Especially more small rental apartments are needed
  • Different types of apartments must be planned in different parts of the city to prevent the division of the city into good and bad areas.
  • The urban structure must be dense
  • Parking slots should be financed by car-owners.