No. 3




Economic Aspects Relating to the Development of Housing

18 June 2001


RiTo No. 3, 2001

  • Jaana Padrik

    MP, Pro Patria Union

  • Indrek Oja

    Tallinn City Government Adviser on City Property, Pro Patria Union

Estonia is currently in a position where a significant proportion of housing comes in the form of apartment buildings that are totally outdated. The period in history when such housing was built has not changed people’s attitudes regarding preferred types of accommodation.

More than 50% of the people occupying apartment buildings in urban areas would like to live in a private house if possible. We also find ourselves in the position where the average size of living space per person is 1/3 less than elsewhere in Europe. These circumstances add to people’s discontent with their daily life. The solution to the problem is provided by the national housing policy, which is designed to facilitate the acquisition of suitable accommodation and encourage families’ housing careers.1

A person’s housing needs change as the person changes. The needs of a young family with children are quite different from those of a retired couple whose children have left home. When speaking of the housing policy, we encounter a view which takes into account the actual needs and possibilities of different social groups. Currently the Estonian housing stock can be tentatively described as follows: 1/3 of all housing is up to 30 years old, 1/3 is between 30 and 50 years old, and 1/3 is over 50 years old. New housing (less than 10 years old) makes up less than 0.5% of the total. Approximately 1/3 of Estonian housing comes in the form of private houses, but in larger towns apartments are dominant. What kind of home would Estonians like to live in? Studies indicate that inhabitants of major Estonian towns predominantly wish to live in a privately owned house. Of the inhabitants of Tartu who presently live in apartment buildings of five or more storeys, 74% would prefer to live in single-family houses if given the chance. A similar tendency is seen in Tallinn, where 55% of apartment owners and 48% of tenants would move to a single-family house. A third of the respondents are ready for a housing career, while 65% of the respondents mention lack of money or the possibility to obtain a long-term loan, as significant factors limiting housing mobility.2

In the light of the foregoing facts, housing development is seen to become possible through more active house building by the inhabitants. On one hand, this would lead to a decrease in the proportion of apartment buildings; on the other, it would present an opportunity to join vacated apartments together or rebuild them according to new standards. Support from the state in the process of creating better homes for inhabitants should come in the form of various subsidies as well as rent control regulations as a model of financial control.

At the same time, local governments are required by law to guarantee accommodation for people who have, for some reason, been deprived of housing or are unable to find habitation. This principle, established in § 14 of the Social Welfare Act, is humane and easily understandable.

The Government of the Republic has acknowledged the “Housing Development Plan in Estonia until 2010”, compiled in 2000. The Government has also assigned the Minister of Economic Affairs the task of compiling a new housing strategy by the end of 2001. At present the Ministry of Economic Affairs is in the preparatory stage of collecting necessary materials and studies.

1Information: Ministry of Economic Affairs of the Republic of Estonia (2000) – Housing Development Plan in Estonia –

2Paadam K., Pavelson M., Tomson L. (2000) Housing strategy in Tallinn. Institute of Urban Studies.

Full article in Estonian