Heka faces rising vacancies and increased rents amid challenges in Helsinki’s rental market

In Helsinki, over 1,500 municipal rental apartments are currently vacant, out of a total of approximately 54,000 rental units managed by the city. Heka, the organization responsible for these apartments, has decided to transfer the costs arising from vacancies directly onto rent prices. “Of course, as we operate on a cost-recovery basis, there are no other funds to draw from,” explains Heka’s CEO Jaana Närö.

In recent years, Heka has significantly raised its rents, with further increases planned for the upcoming year. Residents should prepare to pay approximately 33 million euros for these vacant units next year, nearly 10 million euros more than this year. “While we aim to reduce vacancies, we can’t rely on the situation improving,” Närö adds.

Compared to neighboring Espoo and Vantaa, which boast higher occupancy rates of 98.7% and 98.5% respectively, Heka’s occupancy sits at 97%. The CEO did not disclose specific targets for their occupancy but noted that Vantaa aims for a 99% rate. “A rental company operating on a cost-recovery basis cannot afford to keep apartments vacant,” says Lasse Käck from VAV, Vantaa’s rental housing company.

One major reason for vacancies, according to Närö, is the city’s inefficient marketing and management of available units. Currently, the city oversees the advertising and selection process for Heka’s apartments.

Additionally, many vacant units are undergoing renovations, and issues such as higher rents and lack of amenities, like elevators, have deterred potential tenants. The percentage of rejected rental offers has increased from 49% last year to 57% this year, even as the number of applicants remains stable.

Heka is also streamlining its rental process by reducing the availability of temporary housing units. After concerns were raised earlier this year about unreported vacancies, Närö acknowledged some individual cases but assured improvements have been made in the process.