Association calls right-of-occupancy housing a fiasco

A proposed law could allow underused right-of-occupancy apartment buildings to be sold, while residents’ representatives warn the change could weaken their housing security. The residents’ association says the system has become a “complete fiasco,” Yle reports.

About one in ten right-of-occupancy apartments is either vacant or rented out, according to preliminary figures from the State Subsidised Housing Construction Centre. There are about 3,300 vacant apartments and 3,500 rented ones, and their combined share has risen to 10.9 per cent from about 8 per cent in each of the previous two years.

Under the current system, residents pay to acquire the right to live in an apartment and then pay a monthly usage charge. They cannot buy the apartment outright, but have permanent housing security: owners cannot terminate their right-of-occupancy contract, convert the apartment to a rental or sell it.

Proposed changes could take effect next year

Parliament is considering a bill that would lift those restrictions in two circumstances: when a building is underused, or when it needs major renovations that cannot be financed with a state-backed interest-subsidy loan.

A building would qualify as underused if no more than one-third of its apartments had right-of-occupancy holders, with the remaining apartments vacant or rented. Other conditions would also apply, including that the building had made losses for two years. The losses could not have resulted from misconduct or negligence by the owner. The State Subsidised Housing Construction Centre would decide whether to lift the restrictions.

If passed as proposed, most changes would take effect at the start of 2027. The system of queue numbers for people seeking right-of-occupancy apartments would be abolished from the start of 2029.

The Finnish Right-of-Occupancy Residents Association, known as SASO, fears the changes could push buildings onto the market and weaken residents’ position. Its honorary chair, Eric Hällström, says residents’ average stay is now about seven years, although the system was presented as a permanent form of housing that could be passed on. He also argues that the long-term cost of right-of-occupancy housing can exceed the cost of buying a home and paying its housing-company charges.

Housing companies that own the buildings largely support the proposal. Ruut Vesenterä, sales director at Avain Asunnot, says the costs of a persistently loss-making building should not be shifted to residents elsewhere in the system.

Under the proposal, residents would still receive back their invested 15 per cent capital, adjusted for inflation. They could also buy their apartment or remain in it as tenants.

There were 62,500 right-of-occupancy apartments at the end of September. The total was 60,494 last year and 58,343 the year before.