How to prevent housing benefits from impacting the price of rents? By tying benefits to the price per square metre of rental apartments, says Minister of Agriculture and the Environment Kimmo Tiilikainen of the Centre Party in Yle’s morning show Ykkösaamu.
Tiilikainen suggests setting a price per square metre limit as one of the conditions for determining the amount of housing benefits. In practice, this would mean benefits would not be paid for the amount exceeding a certain price per square metre. Tiilikainen says this would help stop small apartments, especially in the Helsinki region, being rented for the maximum amount possible. The minister says Government would adjust the regional cut-off limits annually.
”In the Helsinki metropolitan area, the maximum prices per square metre could be under 20 euros per square metre, and elsewhere in Finland it could be 12 euros per square metre,” Tiilikainen says.
Currently housing benefits are determined by municipality, monthly income before taxes and the number of adults and children in the household.
Tiilikainen says the Ministry of the Environment will propose the square meter cut-off when benefits negotiations are next on the table. In a survey conducted by the Consumers’ Union of Finland, the average price per square metre in a non-subsidised apartment was 13,30 euros in 2015. The amount rose to 17,49 euros per square metre in the Helsinki region.
Tiilikainen emphasizes that additional housing construction is needed.
Last year, the Social Insurance Institution of Finland Kela paid a total of 1,92 billion euros in housing benefits. The sum was 11 percent more than in 2015.