Student housing must not be excluded from investment grants for special groups

¨Student housing construction and renovation are supported with investment grants for special groups provided by the Housing Fund of Finland. The proposal of the Ministry of Finance to exclude students from investment grants for special groups has been made on false grounds.

The Ministry of Finance justified the proposal by saying that the investment grants have mainly been used for facility and equipment solutions, which is not true.

In Finland, student housing has been supported since the 1980s. With the support, student housing foundations, student unions, student nations and student organisations have been able to build and renovate housing without significant capital. All of these are non-profit organisations, their purpose is not to make a significant profit on rent income. The majority of current student housing has been funded with investment grants, state-subsidised housing loans and interest subsidy loans. The investment grants for special groups have allowed low rents for students, who already live below the poverty line. In 2019, the median income of students was EUR 859 per month.

Objectives to raise the level of education and increase the number of international degree students create a need for new housing

New students need more student housing. If support for student housing construction and renovation were discontinued, the new construction aimed at these students will stop in the current economic downturn. Excluding students from the investment grants for special groups would also pose challenges for the renovation of old student housing. Renovations would require housing providers to significantly increase rents from the current level in order to cover the renovation costs.

There are nearly 100,000 students in the Helsinki metropolitan area, but HOAS, student unions, student nations and student organisations only have housing for just over 20,000 students. Thus, there is a clear need for new construction and current housing must be renovated with investment support.

Investment grants for special groups allow affordable student housing

The Finnish Government’s housing policy development programme for 2021-2028 has set the objective of making student housing the most common form of housing for students.

Regular properties can seek profit with interest rate subsidy loans. In student housing, however, the lack of capital is replaced by the investment grant and there is no need to accumulate profit with rental income. The investment grants for special groups have allowed affordable housing for students. Student housing will not become the most common form of housing for students without the investment grants for special groups.

Student housing projects are profitable for society
Student housing construction is like any other construction, bringing jobs and expertise to Finland. The Ministry of Finance estimates that the exclusion of students brings significant savings, but there are no grounds for this claim. In terms of the overall picture of public economy, the exclusion may not result in any savings and may even have a negative impact. Construction has slowed down clearly and the tax impact of major construction projects significantly boosts the economy in general.

‘The exclusion of student housing from investment grants for special groups naturally affects the organisations that produce student housing, such as AYY, but at the same time has a direct impact on students’, says Chair of the AYY Board Ida Parkkinen. If students must move to more expensive housing without the support of the investment grant for special groups, they will also have to take out the maximum amount of the general housing allowance. Affordable housing also supports students to graduate and transition to working life within a reasonable timeline, which reduces the period when they need the housing allowance.

From the perspective of the national economy and the well-being of students, the exclusion of students from investment grants for special groups would be unsustainable and irresponsible.

For more information:
Nea Baarman
[email protected]

Antti Henriksson
[email protected]
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