Ministry: long-term rent price is set too high for refugees

Ukranian refugee residence on Kopli tänav in Tallinn.
Ukranian refugee residence on Kopli tänav in Tallinn. Source: Google Street View

The Ukrainian refugees living in Kopli apartments in Tallinn were surprised by the high rental price of their poor quality apartments. The Ministry of Social Affairs believes that the prices set by State Real Estate Ltd (RKAS) for refugees are too high and should be reduced, whereas RKAS said the prices were set in accordance with Ministry guidelines.

The residents of Kopli apartment block sent a joint letter of petition to several institutions, pointing out that RKAS planned to charge them market-rate rent price despite the initial very poor condition of their building. In addition, utility bills are calculated per square meter, which prevents families from controlling their own costs.

Both the Tallinn City Council and the Ministry of Social Affairs received the petition. In addition, Tallinn Deputy Mayor Betina Beškina wrote to the Minister of Social Protection Signe Riisalo (Reform) saying such a decision was not justified.

"The rental rates were determined by State Real Estate Ltd. based on the current market rental rates. This is understandable, but not in the case of Kopli building, as employees of the city council who assisted refugees attest that the building was initially in a deplorable state. The rent should be determined by the condition of the dwellings when the refugees moved in, the renovations already completed by the tenants, and the general condition of the building, its energy efficiency rating and the actual living conditions," said Beškina.

Director of Administrative Services at RKAS, Karel Aasrand, told ERR that the drafting of rental contracts and the determining of price levels were based on a April 14 proposal made by the Ministry of Social Affairs to the government, which states that the rental fee should be determined in comparison to the rental fees of similar housing.

"This was the basis for the quoted price and the contract's general terms and conditions," he said.

Aasrand added that, at RKAS suggestion, discussions are underway with the ministry of finance and the ministry of social affairs to find a solution to this issue. In addition, RKAS is waiting for answers on whether new solutions will be introduced and what then the final lease terms should be.

"Otherwise, more confusion might arise in a matter as sensitive as refugee housing. The agencies' objective was and still is to ensure that refugees have access to initial short-term free housing and have the opportunity to sign a long-term lease as quickly and trouble-free as possible," said the director of RKAS' administration.

Karin Veskimae, the head of communications at the Ministry of Social Affairs, said the ministry didn't understand RKAS' pricing policy for this particular building. She noted that state-owned buildings are not typical rental properties; these are not usually rented out.
"The position of the ministry is that, when setting rent prices, it is important to consider the rental rates of comparable dwellings, the costs associated with renting, and the fact that the owner of particular spaces provides the premises only for utility costs. Obviously, it is also reasonable to account for tenant renovations already completed," she said.

The ministry says that comparable to Kopli refugee residence would be social and municipal housing. This means that RKAS should charge a fee sufficient to cover the expenses associated with apartment management only.
"We have reiterated to RKAS that the prices proposed so far are too high for the refugees and, in addition, this price range violates the sense of justice of the volunteers who have contributed to these solutions. RKAS is now responsible for adjusting the rents," Veskimae said, and added that "the installation of water and electricity meters for a fair distribution of utility costs is reasonable; this can be agreed between the owner and the manager of the building."

She also added that the decision to involve the RKAS in finding housing for refugees was made by the government on April 21.

In response to Beškina's concern that the war refugees residing in Kopli have not been provided with sufficient information and that they require more explanation of their obligations and rights, Veskimae said that crisis specialists of the Social Insurance Board are available daily to discuss these issues with the residents of both the Maepealse and Kopli Street buildings.

However, the rights and responsibilities associated with the use of the building should be outlined in the lease.


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Editor: Kristina Kersa

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