The Minister for Economy and Infrastructure says that by building state-supported social housing, more families would choose to stay in Estonia.
Urve Palo fiercely defended today the new social housing project, initiated by her party, the Social Democrats, who joined the coalition government this spring.
The minister rejected arguments by her government partners from the Reform Party who have expressed concerns about the cost of the program.
Palo said to ETV that to start with, the state-supported housing program is needed in order to replace the depreciated and run-down Soviet-era building blocks. According to Palo, three times less new houses and flats are being built in Estonia, than needed, to replace the old lodgings.
“The state has not taken any initiative for 20 years, to ease the situation on the property market,” Palo said.
According to minister, her arguments are backed up by the information she has received from the academics and municipal leaders.
The problems differ between Tallinn and other large towns, and the countryside. In the capital and the second largest city, Tartu, the flats are expensive which has often resulted in young families and those with lower incomes, choosing to live with their parents. But in the countryside, there's an acute lack of new and modern flats and housing available for rent altogether, which means that many have to live in unsatisfactory conditions. This in turn is an obstacle to social mobility, because many specialists are not keen to take up positions in, for example, Haapsalu or Muhu island, if they don't have a proper housing to live in.
Palo added that although the idea of state-supported social housing may sound unfamiliar in Estonia, it is normal in Finland. The state investments would be returned by increased tax revenues because more people would prefer to stay in the country.
“Of course, the initiative must come from the local municipalities. The state will not build the new houses unless there's a local demand,” she said.
The minister conceded that the state-supported social housing would be just one step towards solving the tense situation on the property market, but it is important to give a helping hand to those in need.
“My argument is that every single family who chooses to stay in Estonia, will be a bigger investment for the country in a long term. If proper housing helps them to stay here, instead of emigrating to Finland or Sweden, it is very important for Estonia. Plus, a research conducted by the academics at the Tallinn University of Technology, clearly shows that if the state invests a third of the cost to build a social housing, then all of it will be returned by the tax revenues later,” Palo said.