Espoo fills more city homes and limits vacancy costs

Espoo’s municipal rental housing company has cut its vacancy rate to 1.5%, compared with 4.3% at Helsinki’s equivalent company, Heka. The difference adds an average of 13 euros a month to rents in Espoo and 40 euros in Helsinki, Yle reports.

Heka estimates that vacant apartments will cost it 24 million euros this year. Espoo Asunnot’s customer director, Kimmo Rintala, says the company has improved how it finds tenants for homes that become available.

Espoo Asunnot increased the visibility of its homes on apartment-search services, attracting substantially more applicants. It also began sending rental offers earlier in the process and now makes about 50% more offers than before.

The changes have helped reduce the number of empty apartments by nearly 200 compared with last year. However, Espoo has not returned to the occupancy rate of 99% recorded a few years ago. Competition for tenants across the Helsinki region has intensified after a large number of new homes were completed following the pandemic.

Heka chief executive Maria Aspala says differences in rents, locations and market conditions may help explain why Espoo’s occupancy rate is higher. In Helsinki, most applicants are single people, while many of the homes becoming available at Heka have three rooms. Some parts of the city are also less popular with applicants.

Heka’s rents are 32% below market levels, and the company has between 8,000 and 10,000 active applications at any one time. About 5,000 homes become available each year. Aspala says the rental process is held back by its complexity: the City of Helsinki handles applications and tenant selection, while Heka manages viewings and rental contracts. She says having two organisations involved can create uncertainty for applicants and slow the flow of information.

Helsinki is considering transferring routine tenant selection from the city to Heka. The company has estimated that the change could halve the number of vacant homes, but a working group reviewing the proposal did not agree on its likely effect. The criteria for selecting tenants would not change.

Tiina Backström, chair of Heka’s residents’ advisory board, supports the proposal, saying it could make it easier for people to contact the company and get a home. City housing services manager Oscar Ailio says the current system can address segregation between neighbourhoods and that transferring tenant selection to Heka would not necessarily improve that work.