What is social housing?
Social housing in Finland consists of dwellings subsidised with loans with interest subsidies from the Housing Finance and Development Centre of Finland (ARA), rented at cost-based rents, to tenants selected on the basis of social and financial needs. The right to housing is established by the Constitution, and the purpose of social housing is to facilitate the access to secure and high-quality housing for all. Local authorities have the responsibility to facilitate access to housing at the local level and must also provide housing for certain vulnerable groups. The stock of social housing in the country corresponds to about 16% of the total housing stock.
Who provides social housing?
Currently, about 60% of all ARA-subsidised rental dwellings are owned by municipalities and managed through municipal companies or, to a lesser extent, directly by the local authority. Limited profit housing companies play a complementary role. Insurance companies and industrial enterprises used to develop rental housing in the past, especially in the 1970s and 1980s, but they have meanwhile sold most of their housing stock.
How is social housing financed?
Finland has had a special housing financing institution starting from the early post-war years, but the role of these institutions changed from provision of preferential loans to securitisation of subsidised loans.
Nowadays, financial resources are obtained through loans from various banks and special financing institutions, for which the Housing Finance and Development Centre for Finland (ARA) provides conditional guarantee and pays interest subsidy.
Since 2003, ARA has obtained its funds entirely from repayment with the so called revolving fund. Rental housing subsidised by ARA is let at cost rents to tenants selected on the basis of social appropriateness and financial need. Dwellings are released from regulation after a period which varies between 10 and 45 years. Housing benefits are also available helping beneficiaries to pay for rent, maintenance, heating and water supply.
Who can access social housing?
Priority is given on the basis of social needs and urgency. Income is an important factor but there are no fixed income ceilings.