Government cuts put a stop to the construction of student housing

We are shocked by the recent cuts of the Finnish Government which put student housing and its construction at stake. In its session on spending limits, the Government made significant cuts to the special group investment grants for student housing construction, which makes the commencement of already planned housing projects in the capital region uncertain and complicates the housing situation for students as well as the housing activities of the Aalto University Student Union (AYY).
Joona Lipponen melko totisena

Students are once again being put into a tight spot. Removing students from the scope of general housing allowance forces students to move to smaller and cheaper homes, but at the same time, the construction of these homes is rendered unprofitable by cutting the incentives for student housing construction and reducing students’ ability to pay rent.

The number of students admitted to Aalto University has increased significantly in recent years, up to 42 per cent since 2017, and the number continues to grow. The increasing number of students means that more budget-friendly housing options are needed. AYY’s goal is to build up to a thousand new apartments on the Otaniemi campus in the coming years to meet demand. The cuts to the investment grants put the construction of these new homes at risk.

The special group investment grants for student housing have already been reduced from 15 per cent to seven per cent, and there is no sign of an end to the cuts. The Government has even hinted at the idea of completely excluding students from the scope of investment grants. AYY alone is at risk of losing as much as EUR 4 million per building as a result of these measures. Following the latest decisions, the new student housing that is being planned in the capital region will exceed students’ ability to pay and, at worst, remain vacant. 

Housing construction is long-term work, and it requires predictability and stability in terms of both legislation and the financing of construction. Inconsistent and unpredictable decisions make it impossible to build homes in the face of increasing risks, making it difficult to protect the student’s interests in the housing market. 

We want the Orpo Cabinet to answer the question of where the students in the capital region are supposed to move when faced with apartment shortages and rising rents. You declared that “education and competence are the foundation of the future”. Now would be a great time to change the direction and practise what you preach.

It is not too late to cancel the investment grant cuts and invest in the future instead. New student housing will bring benefits decade after decade. When students can afford housing and living, it is also much easier for them to progress in their studies and complete them on time.


Further information:
Joona Lipponen
Board Member, Aalto University Student Union
tel. +358 40 677 2566

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