Rented housing

Around half of the rental apartments in Finland have been financed by national Arava loans or interest subsidy loans. The other half have been financed on the open market. Apartments financed by Arava or interest subsidy loans are owned and produced by municipalities and associations the Housing Fund of Finland (ARA) has designated as non-profit organisations.

© Saara Sivonen

The residents of apartments financed by Arava or long term interest subsidy loans are selected on social grounds. The rent of ARA apartments is determined by the absorption principle, meaning that the rent covers the capital costs recurred from building the apartment and the management costs of the property.

The rent of apartments on the open market is primarily based on the agreement between the parties and determined by market forces. In addition to private individuals, apartments can be owned by e.g. housing investment companies, insurance companies and parishes.

All rented agreements are subject to the Act on Residential Leases, which includes provisions on the lease agreement, rent and the termination and rescission of lease agreements.

Arava, interest-subsidised and part-ownership apartments

Selection of tenants for State-subsidised (ARAVA) and interest-subsidy apartments is based on three criteria:

  • Housing need, such as homelessness, an eviction order by court, the rescission of a lease agreement or the inadequate size or condition of the existing apartment.
  • Assets. The applicants must not have enough assets to purchase a similar apartment. The assessment is based on the sale value of the assets excluding debts.
  • Gross monthly income of the applicant’s household.
The amount of rent is determined by the absorption principle, meaning that the rent covers the capital costs recurred from building the apartment and the management costs of the property. The absorption principle is adhered to for the duration of the loan period, which is about 35 years. Afterwards, the provisions adhered to are the same as in rented apartments on the open market.

Rents of interest-subsidy apartments have been determined by the absorption principle since 2002. The rents of interest-subsidy apartments financed before 2002 are determined in the same way as the rents of apartments on the open market. The rents of rented Arava houses or apartments and interest-subsidy apartments financed after 2002 can be adjusted to be on the same level.

Tenants have the opportunity to influence matters in Arava and interest-subsidy apartments in accordance with the Act on Joint Management of Rental Buildings. The Act gives residents right to be informed about matters related to the house and have influence on their housing. Joint management has been found to increase the residents’ involvement and comfort in housing.

A residents’ meeting is held at least once per year, and the meeting can include selecting resident representatives for the housing company board and a residents’ committee or a trustee to manage joint matters. A residents’ meeting can take part in the preparation of, and negotiate and state an opinion on, the budget proposal, repair measures, maintenance and superintendence.

Residents of a rental house may also comment on house rules, the rental and distribution principles concerning parking places and other joint facilities, and on the organisation of communal work efforts.

More information

Anu Karjalainen, legal adviser,tel. +358 295 250 067,

Published 2013-10-31 at 8:00, updated 2018-02-13 at 15:02