Why are Helsinki City flats empty?
In a paradox that captures the complexities of urban housing, the Helsinki City Housing Company (Heka) – Finland’s most extensive landlord – has reported having around 1,500 of its apartments unoccupied. This occurrence is particularly striking against the backdrop of the capital city’s housing crunch, with a staggering 10,500 housing applications currently pending processing.
Despite these lengthy queues of hopeful tenants, Heka’s vacancy issue has resulted in significant financial losses, estimated in the millions of euros every month. This financial strain comes at a time when Heka tenants saw their rents increase by an average of 12 percent just last year.
With Heka providing homes for over 90,000 residents of Helsinki, the importance of efficiently allocating these apartments cannot be understated. These units are intended for the city’s most vulnerable populations, prioritizing the homeless and those of limited means and low income.
But the question remains: why are so many Heka apartments standing empty?
An examination of the current housing stock reveals a misalignment between the types of available apartments and the demand from applicants. The bulk of Heka’s vacant units consists of two-bedroom apartments or larger, whereas there’s a higher demand for smaller, more affordable living spaces. In fact, one-room apartments, which only make up a fifth of Heka’s portfolio, are what 61 percent of housing applicants are actively seeking.
This mismatch is exacerbated for certain demographics, like single parents, who represent 16 percent of all applicants. Most are in search of three-bedroom homes, a quest that often proves challenging given the constraints of finding adequately priced larger apartments on a single income.
In addition to the issue of apartment size and affordability, Heka faces another challenge: an increasing rate of applicants declining the units offered to them. Currently, about 60 percent of housing candidates turn down the apartments Heka proposes, a significant jump from the 40 percent rejection rate seen in the past. This trend not only compounds the vacancy problem but also extends the waiting time for housing applicants.
This situation is partly attributed to the current market dynamics, where potential tenants have more alternatives compared to previous years, leading some to find housing elsewhere by the time Heka makes an offer.
Moreover, the process involved in tenant selection has been flagged as an area needing improvement. Critics, including tenant representatives, have suggested that consolidating leasing, tenant selection, and marketing into a single operational unit could enhance efficiency and reduce the number of vacant apartments. They argue that the current fragmented system hinders seamless communication and operation.
In response, city officials assert that efforts are underway to strengthen the collaboration between Heka and the urban environment division’s housing services. These measures include increasing the personnel dedicated to tenant selection with the ultimate goal of minimizing vacancy rates.
As Helsinki continues to grapple with its housing dilemma, the focus on streamlining processes and better aligning the types of available apartments with the needs of the community emerges as essential steps toward resolving the issue of empty Heka flats.
