Cap on square meter prices would make the difficult housing situation even worse

In next week’s budget session, participants will discuss the Ministry of the Environment’s proposal on the cap on square meter prices when granting general housing allowance. Experts ranging from the Social Insurance Institution of Finland to economists have not been happy to see this regulation, which was already rejected in 2015, being brought back on the table and proposed as a condition when granting general housing allowance. The National Union of University Students in Finland (SYL) sees the proposal of bringing the cap back as a poor decision that would place different housing solutions in an unequal position with one another and make the process of granting general housing allowance more complicated. SYL is particularly concerned about the cap’s impact on students: most of the general housing allowance recipients who will receive less money because of the cap can apply for income support to compensate for their losses. However, students cannot apply for income support, as they are required to take out a student loan instead.

The cap on square meter prices will not cause the rent level of apartments located in downtown areas to go down enough so that the apartments would become available for low-income earners. The current maximum amount of general housing allowance has fallen behind of the average rent level in big cities and corresponds more to the reasonable housing costs recognized when granting income support.

“We understand the Ministry of the Environment’s goal of wanting to stop the growth of housing allowance expenses, but we do not believe that the cap on square meter prices is the right solution to this problem. According to the Ministry of Finance’s budget proposal, the savings gained from the cap are minimal, but the impact on low-income earners’ possibilities to live in downtown areas is high. We do not want to believe that the aim of the Government is to take even more money out of students’ wallets than they already have with the massive cuts on student financial aid, but it would seem that this is the case”, says Riina Lumme, President of SYL.

More information:

President Riina Lumme, 044 906 5007, firstname.lastname@syl.fi

Social Policy Expert Silja Silvasti, 041 515 2233, firstname.lastname@syl.fi

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