Helsinki’s affordable homeownership replacement model at risk of collapse

Helsinki’s planned “rent-to-own” housing model, intended to replace the city’s controversial hitas system, is now in jeopardy due to insufficient state funding and unrealistic income limits for residents, reports Yle Uutiset.

The hitas system—a regulated, below-market homeownership program—was phased out years ago after criticism that its subsidized apartments were increasingly purchased as investments and rented out at market rates. The city had aimed to finalize the new vuokralla omaksi (“rent to own”) model this year, with construction set to begin in 2025. However, officials now admit the plan may fail entirely.

State support withdrawn, income thresholds too low Helsinki’s housing program director, Hanna Dhalmann, confirmed that the model’s collapse stems from two key issues: the state has drastically reduced housing subsidies, and the income limits for residents—set a decade ago—no longer reflect Helsinki’s current cost of living.

“Under state-subsidized housing rules, residents’ income caps would be far too low for the goal of eventual homeownership,” Dhalmann explained. She added that securing low-interest state loans for construction has also become nearly impossible, with further cuts expected next year.

The situation is compounded by the government’s recent decision to end support for asumisoikeus (right-of-occupancy) housing, another affordable alternative that was meant to partially replace hitas.

City explores new solutions, including revived hitas rules A newly formed working group, led by Dhalmann, is now scrambling to devise an alternative. While details remain unclear, options include new financing models involving foundations or private partners, alongside the city. The goal is to ensure 10–15% of new housing falls into an intermediate category—between rental and full ownership—previously filled by hitas and asumisoikeus apartments.

Deputy Mayor Johanna Laisaari (SDP) acknowledged the challenge but stressed the urgency of avoiding a crisis like those in other European capitals, where workers are priced out of city centers. “We must find solutions outside the usual framework,” she said, emphasizing cost control in construction.

Could hitas return with stricter rules? When Helsinki’s city board voted to dismantle hitas, the decision hinged on creating a viable replacement. While Laisaari ruled out reviving the old system as-is, she noted that a hitas-like model—with tightened regulations to prevent speculative purchases—remains a possibility.

Key risks identified in the original hitas system, such as below-market resale restrictions and quality concerns, would need to be addressed. Political negotiations on the working group’s proposals are expected to begin this autumn.

One additional hurdle: Helsinki’s current policy bars discounted land leases for new hitas-style projects, a subsidy previously used to lower costs.