Finnish Landlord Association’s themes for the municipal elections of 2017
Housing policy is an integral part of municipal strategies
Health, social services, and regional government reform is moving forward. Municipalities’ role as source of vitality, both locally and regionally, is further emphasized. Education, zoning, and development have an even stronger focus starting January 1st, 2019 as the burden for providing social and health services moves over to the municipalities. They have a significant role in housing policy and creating a good environment for a fully functional policy. The housing policy will have great importance on how municipalities succeed in maintaining and even growing their sources of vitality.
Housing policy is mainly in the hands of cities, i.e. centers of growth. Zoning, lot allocation policies, and efficiency of permission processes are crucial for positive development of residential areas. Cities are planned and developed largely based on housing production goals.
It is important that Finland and its cities and municipalities reach their housing production goals. The best way to advance this is to improve the prerequisites for real estate investment. This is particularly important in cities.
The need for rental housing will increase because people increasingly move for work. In Finland, the annual number is around 800,000. At the moment, the capital region is suffering from labor shortage in some industries whereas elsewhere in Finland the unemployment numbers are higher. Employment can be improved with housing solutions. If you do not have an apartment, you do not have the opportunity to be employed.
New jobs are created in cities and urban areas. From 2000 to 2012, 90% of all new jobs in the country sprang up in the ten largest urban areas. The changes in working life have created the need to offer versatile housing options. Helping people move for work is essential for the national economy. However, it’s important to provide people the freedom to choose where to live.
Currently, there are 295,000 privately-owned rental apartments with approximately 430,000 residents. Privately-owned rental apartments make up about one third of all rental apartments. Most of them are owned by small-scale investors. Private landlords have an essential role in securing a sufficient housing supply that fulfils the needs of society.
Municipalities and cities as sources of vitality
The Ministry of the Environment aims to achieve living conditions that fulfil the needs of society and to have a functional housing market. A good housing policy provides opportunities for all to find housing that suits their current life situation, promotes sustainability, makes society and the labor market function well, and provides opportunities for people to influence the market. One of the main initiatives of the Finnish government is to increase apartment construction.
The government wants to encourage apartment construction. Zoning and permission systems are streamlined in order to make construction easier and quicker. The aim is to strengthen the economy and employment, increase housing supply, renew the existing housing stock, meet the housing market demand, promote competition in construction, improve freedom of choice, and respond to the structural changes in housing needs.
We are in a turning point globally. Urbanization is a growing trend which cities must take into account in their policies. The upcoming municipal elections must bring housing policy to the forefront. This has not been the case before. Municipalities have a great opportunity to influence their own vitality. Housing and housing policy have an essential role in enabling this development.
Developing municipal housing policy – what should be done?
- Municipalities and cities must create a housing policy program that outlines zoning, traffic planning, and residential area as well as apartment construction and goals for housing production.
- Housing policy should acknowledge private landlords as significant players and improving operating conditions for private landlords should be considered important for apartment construction in cities and their development. A private landlord is always on top of the practical matters and is aware of what makes a rental apartment attractive to people in various parts of Finland.
- The demand for rental housing and individual needs will increase in the future. To answer this demand requires the efforts of private landlords. Their opportunities can be improved on a municipal level e.g. by easing zoning regulations and promoting urban infill, conversion, and assigning plots to joint building. To improve the vitality of municipalities, the expertise of the association’s members should be utilized early in the zoning and planning of residential areas.
- Land use, housing, and transport planning must be coordinated closely with the state. The MAL agreements for larger urban areas are a good starting point. The next round of agreements (2020-) must include more growth centers. At the same time, the obligations in these agreements must become more substantial in order to reach the intended goals for, for example, housing production.
- For the positive development of a city, tax policy, and its immediate effect on the costs of housing are a major factor. Cities should refrain from increasing, for example, property taxes which are directly reflected in housing costs.
Rental apartment buildings in growth centers
- New construction of rental apartment buildings in cities and municipalities should focus on special housing services and low-income residents. With the current interest rates and the growth of urban areas, there are private investors available. Even though the goal of subsidized production is to provide rental apartments at lower than market prices, Helsinki remains the only city where subsidized housing is priced markedly lower than market-priced housing. Subsidized housing is also problematic due to the fact that residents are not always low-income or those in need of special services – in other words, those who the subsidized housing was created to serve in the first place.
- Cities must assume increased responsibility for taking care of people in need of rental housing. Currently, the subsidization is not allocated correctly since people with higher income are living in subsidized apartments.
- Cities and municipalities should gradually remove and sell rental apartments from their existing housing stock. With the received funds, they could fund e.g. development investments, such as public transport and other infrastructural improvements.
- At its worst, city rental housing also increases segregation of residential areas. On the other hand, privately owned apartments are located all around the housing stock. In other words, cities should take private landlords into account in their housing policies in order to achieve a balanced population structure.
- The construction and maintenance of ARA housing are essentially a social transfer that tax payers are liable for.
- All municipalities should open up their budgets and provide information regarding the subsidization of ARA construction in the area. Hidden subsidies, such as reduced plot prices and rents, must be brought to light in order to make decision-making as transparent as possible. This is an absolutely necessary measure in terms of openness.
- ARA-subsidized apartments should not be built if they replace private investment. Subsidized production should supplement regular construction.
- At the moment, there are approximately 200 municipalities where ARA rents are priced higher than market rates. The appropriateness of a subsidy should always be reviewed case-by-case.
Streamlining and improving zoning processes
- Zoning should be accelerated in all phases.
- In obvious cases, complaint processes should be expedited.
- Especially cities should allow urban infill in their zoning plans as much as possible. It is smart to gradually condense urban structures.
- More efficient office space conversion
- The urban infill done by housing companies should be actively encouraged, especially in larger urban areas.
- Cities must relieve some of the unnecessary zoning regulations that increase prices. For instance, deregulations are needed for parking space and facade material-related issues as well as for restrictions concerning the shapes and locations of buildings.
- Building code is the guideline municipalities use. All municipalities should review their building code and see that it is up to date.
- The codes should be rewritten to become more enabling. For instance, mounting a solar roof panel should not require a specific permission.
Public transport promotes growth
- Investments need to be made in public transport. It is a significant part of urban planning, steering construction in cities.
- Connecting suburbs to city centers relies on a smooth public transport system.
- Rail transport investments promote growth in large cities, and the state should increase their investments in city railways.
- Developing public transport is a great way to improve cooperation within an urban area.
The Finnish Landlord Association – an important expert organization operating in the housing market
The Finnish Landlord Association is a service and lobby organization for private landlords and real-estate investors. We pursue the interests of our members on a national level and provide the highest level of expertise on renting and real-estate investment in Finland.
The Finnish Landlord Association has over 11,000 private landlord members. They make up about 60% of the rental housing market. Other operators function on an institutional level. These include rental companies VVO and Sato, housing funds, foundations, etc.
Members of the Finnish Landlord Association represent a wide variety of socio-economic groups, such as white and blue-collar workers, entrepreneurs, retirees, etc. Our members therefore have significant influence in other areas of society in their primary occupations. Typically, private landlords are part-time landlords with a regular day job.
Our leading expertise in housing should be utilized in redefining the changing role of municipalities across all of Finland.
Finnish municipal election candidates who are members of the Finnish Landlord Association:
Espoo
Kaarina Jääskeläinen, Christian Democrats
Pertti Jääskeläinen, Christian Democrats
Helsinki
Ville Hurmalainen, Centre Party
Leila Kaleva, National Coalition Party
Kauko Koskinen, National Coalition Party
Sari Näre, The Greens
Taru Päivike, Centre Party
Petri Roininen, National Coalition Party
Daniel Sazonov, National Coalition Party
Aino Tuominen, The Greens
Hyvinkää
Vesa Piekkari, Social Democratic Party
Hämeenlinna
Matti Mikkola, Finns Party
Iitti
Maria Kokkonen, Centre Party
Jyväskylä
Sirpa Kaikkonen, Centre Party
Kangasniemi
Marjaana Sävilammi, Centre Party
Kirkkonummi
Greger Englund, Swedish People’s Party
Sari Jouhki, National Coalition Party
Kouvola
Jaana Lehtilä, The Greens
Lahti
Sami Reinikka, National Coalition Party
Heikki Ulvila, National Coalition Party
Laukaa
Jorma Leivonen, Centre Party
Lohja
Bror Heinola, Finns Party
Kari Kyttälä, National Coalition Party
Loimaa
Tarja Mäki-Punto-Ristanen, National Coalition Party
Orimattila
Matti Pietilä, National Coalition Party
Paimio
Martti Mäkinen, Finns Party
Pori
Henna Heino-Kuoppamäki, The Greens
Pyhtää
Anne Metsola, National Coalition Party
Savitaipale
Juhana Liimatainen, Centre Party
Tampere
Hannele Piitulainen, The Greens
Jarkko Rikala, National Coalition Party
Vantaa
Jari Ahokas, National Coalition Party
Mika Rautio, National Coalition Party
Ylöjärvi
Katariina Sorvanto, National Coalition Party