Housing is often considered expensive in Finland, but researchers at the University of Turku found that it usually eats less than one-fifth of income, which is below the European average.
The government recently commissioned a report examining Finland’s housing costs compared to other European countries. While there was good news, the researchers also found that tenants in Finland pay a much larger share of their income to keep the roof above their heads than homeowners.
"Tenants (in Finland) spend a much larger share of their income on housing than tenants in other countries," said the professor of sociology Hannu Ruonavaara, which led the research.
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In Finland, tenants spend about 32 per cent of their income on rent, while the corresponding share of homeowners is 15 per cent. Low-income people who rent in the private market experience the most pressure, the researchers found.
In 2018, almost half of low-income households spent 40 per cent of their income on rent – a figure just surpassed by the UK.
Goods store
The researchers also found that although all income classifications rent in other countries, renting in Finland is concentrated among low-income people.
Anne Viita, The managing director of the Finnish Tenants’ Association, said that the problem is that housing is considered a commodity and not a fundamental right.
"Affordable housing should be available to all," he said.
Over the past decade, the share of Finns living in market housing has increased from 10 per cent to 14 per cent, according to Eurostat.
Sakari RokkanenAn economist from the Finnish Landlord’s Association said that rapid urbanization in recent years has affected the high demand for rental properties.
Rents have risen over the last ten years. While landlords have drawn on ideas related to rent regulation, researchers have offered special tax breaks to landlords who commit to charging below-market rent.
Rokkanen warned that the regulation of the private rental market could lead to more apartments entering the black market.
"Increasing the housing stock is the only way to influence prices. Businesses want to build cities, but zoning rules prevent it. We can’t build as much as we need," Rokkanen explained.
The government is currently preparing a housing policy program, the purpose of which is to examine how Finland will deal with the pressure to make affordable housing available over the next eight years.
Legislators are expected to discuss the issue next month before suspending for a year.