heavy government regulation

Not so fast, mister. They’re the municipalities that do zoning, not the government. We have this thing called decentralisation here.

Some aspects explaining the constraint on land supply: municipalities must provide the infra for zoned sites, so in some cases they can be damn lazy. Zonings are also quite easy to take to a appeal round in civil courts as well -but isn’t that meant to protect individuals from public discretion?

And of course, Finland has far too many municipalities -which then can’t usually think out of their borders. Helsinki and her neighbours might be a prime example.

By the way. This is also a country of almost two million saunas. Had I choose between twenty extra squares and my own sauna, I would’t have to think twice. Haven’t bought any houses yet, though -do saunas make any price difference?

Not so fast, mister. They’re the municipalities that do zoning, not the government. We have this thing called decentralisation here.

My bad, I was using Ameri-speak there. When I say “government” I mean local/regional/state/federal government. I’ll clarify it.

Haven’t bought any houses yet, though -do saunas make any price difference?

When my girl and I were looking for a rivitalo/paritalo a couple years ago, all but one we saw had a sauna in the house.

I know someone is going to come on here and say, “Well Finns usually have two houses!!” Who the hell has two houses? The only people I know who have a house and a cottage in the woods are wealthier people, or people who live up in the sticks, or people who are fortunate enough to have parents who left them with a second house. There’s this notion that all Finns have two houses (well, a little cabin in the woods without electricity ain’t exactly a house) and that’s just a myth.

Anyone else surprised at the size of Japanese apartments? I thought they were the ones who lived in cramped little boxes.

I don’t know if there’s anything to brag about in wasting (or aspiring to waste) the natural resources in sustaining an unnecessarily big house. How much space does a person really need?

Look at Sweden, we’re practically on the same level (on the “new” category). Just a guess: Could also have something to do with the heating expenses in the vicinity of the polar circle.

Mind you, that excuse doesn’t explain the small size of italian and portuguese homes.

Interesting, the british homes are shrinking. Look at the “new” category: 76. Even smaller than in Finland.

These polls are so generalized that they really don’t make much sense to me. For instance, here in the States, the size of your residence depends a good deal on where you live. A friend of mine lives in the suburbs of Omaha, Nebraska and has over 4,000 square feet of living space. Another friend, for the same money, lives in 800 square feet in a condo in West Hollywood.

I would hazard a guess that a flat in downtown Helsinki costs a lot more than a comprable flat in Turku, or even Espoo.

It would be impossible for me to live in anything but a small box in a number of US markets, such as New York, San Francisco, Boston or LA. On the other hand, I could probably live like a king in Fargo, North Dakota.

.

When my girl and I were looking for a rivitalo/paritalo a couple years ago, all but one we saw had a sauna in the house.

I meant that does anybody know whether it makes any difference regarding the euro/sq-meter rate, if compared eg to American houses -which usually have no saunas?

One reasonable explanation for those findings is probably related to to that low net worth we discussed a couple of months ago; that in the not too distant past Finland was still a dirt-poor country.

And of course, housing isn’t a cheap thing on these latitudes.

that in the not too distant past Finland was still a dirt-poor country.

That’s a good point. Alot of the houses today were built many years ago, when Finland wasn’t as wealthy as it is now, might not have had the money back then for a big house. But then according to the chart, new houses are still small. Maybe Finns just became accustomed to small houses and learned to accept them and have nothing to compare them to.

“Maybe Finns just became accustomed to small houses and learned to accept them and have nothing to compare them to.”

I believe that Finns are culturally more thrifty than Americans are, and see no point in having space that is expensive to heat in the cold, long winter . Americans are often talked into buying “too much house” by smooth talking, commision paid realtors. Not to mention keeping up with the Jones’. Thats why you have so many foreclosures on houses in US these days, and not so much in Finland. IMO Finns are much smarter in this respect.

@10 brilliant logic there boss, then how do you explain the bigger houses in Denmark ? A plausible explanation, like it has been said many times, it that Finns just like to bend over and take it from the government, just like high taxes, poor service, and blah, blah, blah. My prediction: Nothing will change to get used to it!

I believe that Finns are culturally more thrifty than Americans are, and see no point in having space that is expensive to heat in the cold, long winter.

If you look at property prices outside the large cities where all the jobs are, you’ll see that they are virtually free. Correspondingly, houses are also more spacious. With proper insulation, heating isn’t such an issue either. You won’t be spending much over 100€/month on heating oil for a 200 sqm house, much less with more economical systems such as a heat pump.

I wish Finns were thrifty. It seems that low interest rates, careless banks, sleazy realtors and euro blindness have turned the country insane. New developments in Manhattan’s Financial District are cheaper than ones in downtown Helsinki.

12: You’re right. I bought an apartment from Kotka just under 2 years ago. I paid 29500 Euros for a 60 sq. meter two-room apartment. Pretty cheap, right?

Before that I had an 22 sq. meter apartment in Kallio and it cost me 60K.

Yeah, it is often forgotten that before we began our madly successful welfare state project and build up one of the most dynamic economies in the West, we used to be a very poor, semi-agricultural country, many decades after most other Western countries had already fully industrialized and urbanized. This said, our housing policy has been quite failing for the last couple of decades – many things could have been done much better. (Like for example having that extra tax for unbuilt plots that Phil so approvingly cites…) These failures are due to both state and market deficiencies – it is quite crazy that with such a small population inhabiting a relatively large area, we still live quite crampedly.

We have disproportionate growth here in the Helsinki region, so it’s no wonder that prices are so high. Couple that with our meager earnings due to the overtaxed economy, and things become quite difficult.

Municipalities in other parts of the country should probably do more to attract companies. Even the national government could help to incentivize it. There’s more cheap land there, so living should be easier.

These days, if you were raised ‘out there’, you often have to move to the H region for a good job. Not everyone wants to live around H though. I know people who’d NEVER live down here, no matter how much you paid them. There’s a general consensus among people from other parts of Finland, that Helsinkians are, eh, not very enjoyable to be around.

Of course, I don’t know what they’re talking about

BTW, these are young people I’m referencing. They work in fields like medicine, accounting and law—so it’s possible for them to earn high salaries almost anywhere. For example, in places around Kuopio, they can afford BIG houses and much nicer lifestyles than here in the H region.

But not everyone can work in those professions, so maybe we need a more diverse job market out there. It would solve most of the dilemmas that people are facing today.

It’s been suggested that one reason for the continued prevalence of these dinky little rabbit hutches in the Helsinki region is that there’s more profit in them than in larger apartments. Check out the prices per square metre on tiny apartments and on medium sized ones. But zoning could be used to alter that, if the city wanted to.
Then there’s this odd idea that modern architecture looks better if you scatter it in tiny bits all over the Middle Uusimaa countryside rather than having closely built-up urban areas with tall buildings. If land were used more efficiently, it could only help.

As a Finn living in Luxembourg, I can state that from a renters point of view Luxembourg is much better value for money. The landlords make hardly any money at all on the rent, their only upside is capital gains on the underlying property value.

I think it’s perfectly obvious that housing in Finland sucks compared to other Western European countries let alone North America. We live in tiny and outrageously overpriced apartments/houses. I perfectly agree with Phil that government overregulation is probably the main culprit. There is a hell of a lot of unzoned land reasonably close to the city centres of even the largest cities. We’ve brought this misery on ourselves.

Unzoned for housing, that is.

On the other hand, average housing sizes in different countries are not directly comparable, since household sizes may differ between countries. Total living space per capita (including WCs, hallways etc.) is a better indicator.

The issue of regulation is a hard one. It is very much needed in my opinion, otherwise we will get a free for all of building without consideration for the landscape. I am also against very much the current bullying of Sibbo by Helsinki, for instance, in it’s desire to commendere land to build more houses which substantially change the demographics of the area.

What is keeping Helsinki from building upwards? I mean except for Vuosaari, there are virtually no high rises here. With a few (okay 10) high rises closer to the center, the city could significantly improve the problem of housing shortages.

But no…

What is keeping Helsinki from building upwards?

KePu is. According to their philosophy, two hours of daily commuting by car (Helsinki-Nurmijärvi) is an integral part of the good life, whereas living in high rises (or apartment buildings of any kind) is a tragedy for children especially.

Compared to UK Finnish appartments are big and cheap. I live right now in a room from a flat and pay more than i paid for 30sq apartment in Finland. And now I’m living 5km from the center, in Finland it was tne minutes walk. And in UK most young professionals don’t even dream about buing a house, because it’s just way too expencive.

Planning is okay but one wonders how good the planning is when the houses built are often quite ugly and are always unnecessarily small given the amount of land available. This price bubble is purely the result of not building enough houses and that in turn is the fault of both the municipalities (for not making anough housing available) and the building companies, who profit very nicely from keeping demand artificially high.

As a commenter above pointed out, there should be more high rise flats near the centre for the single people and couples who want to be there. High rise flats are ecological, economical and also offer great views for people up high enough. Of course the transport system must support them but Helsinki has a reasonably efficient transport system, especially from Pasila.

#24 Heh, transport in/around Helsinki sucks!

But, aside from that….. One thing to consider about incentivizing construction by taxing unused land, is that eventually you’ll have American-style urban sprawl and traffic. I’d rather see the city’s surroundings stay green. Highrises would help, but they shouldn’t be tightly clustered or they’ll start to develop a ghetto dynamic. Unless of course they’re expensive.

Overall though, I still think we’re trying to stuff too many people into this region. I don’t think it’ll be good in the long run.

There was a plan for skyscrapers in Pasila.

What ever happened to it?

One more vote for high(er) rise buildings in Helsinki… I used to live in Vancouver in the Yaletown area and boy did they know how to build a nice looking high rise neighbourhood. Quite small apartments in North Americans standards, but pretty nice for us Nordics.

Parks / sea wall (without cars) and you can walk in 20 min. to anywhere in downtown:
http://en.wikipedia.org/wiki/Yaletown
http://www.lestwarog.com/region-1.html

In the downtown Helsinki area, the apartments are even more claustophobic.

So many of the apartments are in old buildings where there are long hallways that go nowhere, or have strange little rooms that are too small for a bedroom but too big for a closet.

I was living in a 70 sq. meter modern building in downtown Helsinki that was one of the few that was very efficiently laid out. All of my downtown friends thought the place was much larger – even 85 or 90 sq. meters. And even though I was only on the 4th floor, I had open views and sunshine all daylight hours unlike most apartments in downtown Helsinki that face mostly into the neighbouring apartment houses.

I do think some tall modern efficiently laid out apartments just outside the city center would be a help. They will seem so much more attractive than some of the older housing stock in downtown that prices would moderate abit in downtown.

This price bubble is purely the result of not building enough houses and that in turn is the fault of both the municipalities (for not making anough housing available) and the building companies, who profit very nicely from keeping demand artificially high.

I wouldn’t actually call it a bubble, if you consider how much catching-up there has been from the post-recession years. The house prices (if measured together with purchase power) of 1987 were reached just 2004 and the property inflation has been pretty modest if you contrast it to other growing EU economies, such as Ireland and Spain.

http://www.stat.fi/tup/suoluk/suoluk_asuminen_en.html
http://www.stat.fi/til/ashi/2004/03/ashi_2004_03_2004-10-29_kat_001.html

Maybe the high (cirka 70) home ownership rate (especially in declining regions?) offers some explanation? If you own a house in Kajaani you can’t pack your stuff and move to Helsinki/Tampere/Oulu that easily, unless you have some savings. So even if the migration to cities has been publically perceived as something rapid, in normal conditions it should have been even faster. So regarding the housing markets, the supply constraint has been somewhat balanced out by another constraint on demand?

And since it’s of my favourite theme, I’d like to point to the change in demography too. When people age they become also less eager to move and buy property -or anything else, for that matter. They simply spend less. And Finland has the 4th highest median age in Europe.

I’ve seen people make with perfect seriousness the argument that we can’t build tall buildings because it would change the city profile visible from the sea. Since when was Helsinki made an open air museum, anyway? The other argument, that people do not want to live in flats in the city is belied by the high prices that people are willing to pay for them.

They could probably design something interesting like, say…. Rooftop saunas with adjoining gardens and tiki bars! Just imagine!

Also imagine whizzing over the side and tossing-down your empty beer cans! Ahhhh highrise luxury

It’s the suicide thing. If there would be many high rise buildings scattered around town, there would be mass balcony diving. Good the government is keeping us safe.

Franklin, #22, you gotta be kidding.

Helsinki City Council: 85 members, 4 from KePu
Helsinki City Govt.: 15 members, 1 from KePu

I kinda always though that the city itself is in charge of zoning etc., not the national govt.

I kinda always though that the city itself is in charge of zoning etc., not the national govt.

So do I, but KePu’s Manninen, for instance, considers the Sipoo land-grab to be within his jurisdiction.

According to him, the land-grab will facilitate “ordinary Helsinkians” buying seafront property from Sipoo. That remains to be seen.

KePu kusettaa aina.

The high property prices are due to two interlinking factors: 1) anti-zoning of urban subcenters and 2) an ideological sticking to heavy transit.

About ten years ago, when Vantaa was still planning Aviapolis, I had an opportunity to visit one of the planning meetings where Helsinki through its mouthpiece YTV lobbied strongly against any plans to commercially develop any subcenters outside Helsinki borders. At that time Helsinki still considered Espoo and Vantaa as its main rivals for taxbase. Now house buyers have leaped over Kehä III and they commute only to Kehä III, where an increasing number of companies are locating. Now Helsinki considers the next ring of counties “Kuuma-kunnat” as their main rival. The situation has dramatically changed in less than 10 years. Helsinki has to actually offer better value for tax money if it wishes to retain its taxbase.

To my understanding it is mainly the sos dem politicians that are interested in joining all the counties as one “Helsinki metropoli”, but — to my disappointment — kokoomus is not far behind. When it comes to situations where a citizen could really benefit from competition, i.e. competition among counties for regular taxpayers, kokoomus prefers to promote the monopoly position of local government.

The idea of heavy transit will keep the prices high because heavy transit has limited access, about 2 km rings around the stations. It provides much less accessible properties than a transport system rolling on rubber tires. Heavy transit also requires a hierarchical hub-and-spoke network, because of the incredibly high infrastructure investment costs compared to lighter transit modes. So sticking to heavy transit will guide a maximum number of transit trips through downtown Helsinki.

Sticking to heavy transit and zoning the land accordingly affects pollution and noise in two ways: a passenger-km of a full train produces less emissions than a passenger-km of a full car, but with heavy transit there are more passenger-km’s due to the circuitous routes through downtown. And the trips take more time. The long travel times are reflected in people’s willingness to pay high prices for the scarce housing with good access. Because housing is pricey, people settle for small quarters. This of course fits the land developer’s interest, because it can get more profit from a piece of land if it builds an apartment building with many small, standardized apartments than if it has to actually please the buyer and build larger, individualized houses.

Most unfortunate for the all Finns is the fact that the modern production system is based on JOT. And JOT needs rubber tires: small, frequent, flexible transport systems for both goods and people. Sticking to rail in transportation is just as progressive as sticking to line phones in communication.

Also, because public transit needs customers, there is a moral mandate to tax cars heavily. Consequently, people drive old and heavily polluting cars, which in turn strengthens the heavenly mandate to tax the cars a bit more.

My personal bet is that the four new car tax models the transportation ministry is about to publish will have one red herring, two fillers, and a planned-to-win proposal, that increases the total tax collected from cars through years to come. And most probably, the new tax is going to be officially presented as if it depended on pollution, but somehow the tax is going to be determined in a way that the car owner can not reduce the tax by additional car maintenance (and actual reduction of the pollutants).

When I married my Swedish wife and moved back to Australia, we bought relatively cheap but biggish house by Australian standards, ie over 200 square meters. Houses are bigger here because you don’t really need to heat the house and if you do, it is only for a few months. To my surprise my wife wouldn’t send a picture of the house back to her friends back in Sweden. Bad taste you see. Might seem boastful to friends living in smallish but expensive apartments.

When I married my Swedish wife and moved back to Australia, we bought relatively cheap but biggish house by Australian standards, ie over 200 square meters.

Houses cost nothing in the middle of nowhere in Finland. I would venture to imagine that there is a price difference between the outback and the suburbs of Sydney down under as well.

Which is not saying that Helsinki isn’t probably the shittiest place in the universe with regard to PPP in this respect, save perhaps London if you don’t happenn to work in the City.

Mara—

Do I understand you correctly, that you favor bus transit over trams/trains?

I’m also interested to see the new car tax proposals. I hope they don’t go the hypocritical route of taxing older (polluting) cars more heavily. They’ll simply roll-over to Russia and we’ll get the smoke every time the wind changes our way.

Of course, we can junk the old cars and buy new, more efficient ones. But then the environment would be polluted via the manufacturing process of the new cars.

Taxing new, heavy-polluting cars at higher rates, would make sense though.

In the end, I’m sure they’ll do whatever pulls more money out of our pockets, rather than what makes the most ecological sense.

Finnish houses may be expensive, but as a finn living in Ireland at the moment, I can say the quality of them is way higher than the mediocre level here or in UK. Lousy heating, no proper water/heat insulation and mold problems seem to be the norm here. I would gladly pay finnish rents just to get a bathroom floor that would keep the water out of the structure.