Although new apartment buildings continue to spring up across the capital, buying a home in Tallinn is becoming increasingly difficult, as apartment prices are rising faster than people's incomes. The most vulnerable groups are young families and people with lower incomes who were unable to privatize apartments during the post-Soviet era.

"This has created a situation where it's becoming especially hard for young people to find housing. They end up living with their parents for longer periods. And even if they do find a rental apartment on the market, moving beyond that to buy something of their own has become increasingly difficult," said Anneli Kährik, associate professor of urban geography at the University of Tartu.

According to Kährik, there are now significant price disparities between city districts. Affordable apartments are typically located in Soviet-era sleeper communities, which often do not meet the needs of young families and are usually unrenovated. New apartments, on the other hand, are extremely expensive and have become significantly smaller over the past decade, forcing families with children to move farther away from Tallinn. The researchers who conducted the study say it is crucial for the city to start shaping the housing market.

"Access to affordable housing is not just a social issue — ensuring people have a place to live — but also has wide-ranging political and economic implications. It's essential for making the city livable and economically competitive in the future," said Mattias Malk, a visiting lecturer at the Estonian Academy of Arts.

According to Malk, the city has tools at its disposal — particularly in cooperation with developers — to support the construction of affordable housing.
"The city can create favorable conditions for developers to build more affordable units. If the city develops property on municipal land in partnership with developers, it is also legally possible to set rental price ceilings and regulate how those homes are resold," Malk said.

Currently, the city owns plots in Lasnamäe that could be used for such developments, and in the future, the use of state-owned land within the capital could also be considered. The deepening of social inequality in Tallinn has been an escalating issue for years, one that risks leading to the ghettoization of certain neighborhoods.

"I'm not saying the situation in Tallinn is comparable to major European capitals like Paris or Stockholm, but there are a few areas that give cause for concern — which I won't name here. What we're seeing is that new developments in and around Tallinn tend to attract wealthier residents, and those residents often come from unrenovated apartment buildings. As a result, these older buildings are increasingly left to less affluent people, and this divide is worsening. What's more troubling is that this inequality is being passed down from parents to children," said Tiit Tammaru, professor of urban and population geography at the University of Tartu.

Tallinn's housing policy principles are set to be finalized at the end of August. Whether they are implemented will depend on political decisions. Until now, no local government in Estonia has intervened in the housing market; residential development has been driven entirely by free-market forces.

--

Follow ERR News on Facebook, Bluesky and X and never miss an update!