Social- og Indenrigsudvalget 2019-20
SOU Alm.del Bilag 202
Offentligt
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Finnish Housing Policy and
Housing Finance System
Mikko Friipyöli
Ministry of the Environment
Department of the Built Environment
 SOU, Alm.del - 2019-20 - Bilag 202: Meddelelse om materiale fra Social- og Indenrigsudvalgets studieturen til Finland den 1-3. marts 2020
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Government Program on Housing Policy
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Building a carbon neutral society and improving the quality
of construction, making the existing building stock more
energy-efficient
•
Supporting sustainable urban development and increasing
housing construction in growing urban areas, especially the
affordable state-subsidised housing production
•
Strengthening the position of tenants (measures to prevent
disproportionate rent increases)
•
Eradicating homelessness within two government terms
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 SOU, Alm.del - 2019-20 - Bilag 202: Meddelelse om materiale fra Social- og Indenrigsudvalgets studieturen til Finland den 1-3. marts 2020
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Current Trends in Housing
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High level of Housing production
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Polarisation in housing market
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Housing shortages and high housing costs in growth centers
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Oversupply of housing in regions with shrinking population
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Interest in rented housing rising, rental prices have increased
•
Municipalities have a key role in housing
•
Agreements between State and municipalities on land use,
housing and transport (MAL-agreements)
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 SOU, Alm.del - 2019-20 - Bilag 202: Meddelelse om materiale fra Social- og Indenrigsudvalgets studieturen til Finland den 1-3. marts 2020
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Housing production at record high but declining
Building starts
Completed
Building permits
Statistics Finland & RT
Esittäjän nimi alatunnisteeseen
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 SOU, Alm.del - 2019-20 - Bilag 202: Meddelelse om materiale fra Social- og Indenrigsudvalgets studieturen til Finland den 1-3. marts 2020
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Urbanisation continues, estimate 2040
Source: Statistics Finland, VTT
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 SOU, Alm.del - 2019-20 - Bilag 202: Meddelelse om materiale fra Social- og Indenrigsudvalgets studieturen til Finland den 1-3. marts 2020
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Prices of dwellings in housing companies
Statistics Finland
(real price index 2000=100)
100
120
140
160
180
20
40
60
80
0
1988Q1
1988Q4
1989Q3
1990Q2
1991Q1
1991Q4
1992Q3
1993Q2
1994Q1
1994Q4
1995Q3
1996Q2
1997Q1
1997Q4
1998Q3
1999Q2
2000Q1
2000Q4
2001Q3
2002Q2
2003Q1
2003Q4
2004Q3
2005Q2
2006Q1
2006Q4
2007Q3
2008Q2
Whole Country
Esittäjän nimi alatunnisteeseen
Greater Helsinki
Rest of the country
2009Q1
2009Q4
2010Q3
2011Q2
2012Q1
2012Q4
2013Q3
2014Q2
2015Q1
2015Q4
2016Q3
2017Q2
2018Q1
2018Q4
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 SOU, Alm.del - 2019-20 - Bilag 202: Meddelelse om materiale fra Social- og Indenrigsudvalgets studieturen til Finland den 1-3. marts 2020
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Non-subsidised rents increased 5-6% 2015-2019,
subsidized rents well below the non-subsidized
level
Statistics Finland
Esittäjän nimi alatunnisteeseen
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 SOU, Alm.del - 2019-20 - Bilag 202: Meddelelse om materiale fra Social- og Indenrigsudvalgets studieturen til Finland den 1-3. marts 2020
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Owner-occupancy living decreases among young
age groups
Statistics Finland
Esittäjän nimi alatunnisteeseen
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 SOU, Alm.del - 2019-20 - Bilag 202: Meddelelse om materiale fra Social- og Indenrigsudvalgets studieturen til Finland den 1-3. marts 2020
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Role of the State in Housing Market (I)
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Housing in the Constitution of Finland:
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“The public authorities shall promote the right of everyone to
housing and the opportunity to arrange their own housing.”
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Role of the State complimentary
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Only compliments the market operation when the market-
based mechanisms don’t work in a sufficient way and
provide adequate housing solutions to satisfy different
housing needs
 SOU, Alm.del - 2019-20 - Bilag 202: Meddelelse om materiale fra Social- og Indenrigsudvalgets studieturen til Finland den 1-3. marts 2020
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Role of the State in Housing Market (II)
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Legislation
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Strategic planning of housing policy, incl. various programs
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Subsidies
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Housing production
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Social housing, housing allowances for low income groups
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Tax subsidies
o
Sale of own home is tax free (after 2 years)
o
7,5 % of the interest payments on housing loans are deductible
for income tax (limits on maximum) in 2019, deductibility has
been reduced since 2012, will end this government period
o
No property transfer tax for young first-time home-buyers
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Provision of information
 SOU, Alm.del - 2019-20 - Bilag 202: Meddelelse om materiale fra Social- og Indenrigsudvalgets studieturen til Finland den 1-3. marts 2020
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Housing allowances and support for production
2500
2000
Million €
1500
1000
500
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Housing allowances
Production support
 SOU, Alm.del - 2019-20 - Bilag 202: Meddelelse om materiale fra Social- og Indenrigsudvalgets studieturen til Finland den 1-3. marts 2020
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The Role of State-Subsidised Housing Production
State-subsidised and free market production (amount and ratio)
ARA & Statistics Finland
Esittäjän nimi alatunnisteeseen
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 SOU, Alm.del - 2019-20 - Bilag 202: Meddelelse om materiale fra Social- og Indenrigsudvalgets studieturen til Finland den 1-3. marts 2020
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Social Housing production in Finland
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Reasonably priced rented housing for households with low
income level
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Aims to:
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prevent exclusion from the housing market (homelessness)
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support the mobility and availability of work force
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reduce negative segregation
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40 % of all rented flats state-subsidised (12 % of households)
•
Directed for growth centers (housing for special groups also
for other areas)
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For municipality companies and non-profit companies
 SOU, Alm.del - 2019-20 - Bilag 202: Meddelelse om materiale fra Social- og Indenrigsudvalgets studieturen til Finland den 1-3. marts 2020
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Support of the Social Housing Production
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Interest subsidies for loans from financial institutions
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Interest subsidies cover certain proportion of interest payments
over 1,7 %
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Are paid for 10-30 years, highest at the beginning
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State guarantees for interest subsidy loans
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Loan covers up to 95 % of the building or renovation costs
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Compensate the eventual losses of the lending institution after
realisation of the securities
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Grants for special groups (with interest subsidy loan)
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Elderly in poor condition, persons with disabilities, homeless,
students, young people
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Grant varies from 10 to 50 % of the investment
 SOU, Alm.del - 2019-20 - Bilag 202: Meddelelse om materiale fra Social- og Indenrigsudvalgets studieturen til Finland den 1-3. marts 2020
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Housing Finance
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Housing finance comes from the capital markets
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Earlier from the State (ARAVA loans)
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Housing Fund of Finland
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Operates outside the State budget under the Ministry of the
Environment
•
Derives income from interest and repayments on old ARAVA
loans
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Responsible for the most of the State subsidies for housing
construction (grants, interest subsidies and state guarantees)
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Last year 131 M€ of grants and interest subsidies, 1 383 M€
approved for new interest subsidy loans
•
Majority of financing for the social housing comes from
Municipality Finance (credit institution owned by Finnish
public sector)
 SOU, Alm.del - 2019-20 - Bilag 202: Meddelelse om materiale fra Social- og Indenrigsudvalgets studieturen til Finland den 1-3. marts 2020
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Restrictions on Social Housing Production
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Building unit based restrictions
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10-40 years
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Buildings for rental use only
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Cannot be sold to open markets
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Tenant selection based on housing need
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Priority is given to homeless applicants and other applicants in
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Cost recovery rent
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Subsidies of construction are directed to tenants
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Rents are adjustable between housing units
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Limited profit to owners (limited-profit companies)
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Yield of 4 % to original investment in company only
urgent need of housing, as well as applicant households with the
least means and lowest income
 SOU, Alm.del - 2019-20 - Bilag 202: Meddelelse om materiale fra Social- og Indenrigsudvalgets studieturen til Finland den 1-3. marts 2020
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Other support for Housing Production
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Support measures for owners of state-subsidised dwellings
facing financial difficulties (in areas with shrinking population)
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Grants for repairs on housing for people with disabilities or
aged 65 or older (limited wealth and income)
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Grants for lift installation and accessibility renovation in order
to promote older people’s ability to live at home
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Municipal infrastructure subsidies (for municipalities that
have entered into a land use, housing and transport contract)
 SOU, Alm.del - 2019-20 - Bilag 202: Meddelelse om materiale fra Social- og Indenrigsudvalgets studieturen til Finland den 1-3. marts 2020
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Thank You!