The new municipal councilors elected in the spring will wield great power in the municipalities. Their decisions will greatly affect, for example, how the housing supply meets the needs of current and future residents, what the cost of housing will be, and how the vitality of the municipality will develop.
Finnish municipalities will renew or at least revise their municipal strategies in the coming council term and prepare various housing and land use programs related to land policy. The programs include the municipality's housing policy guidelines, such as targets for the annual number of housing starts, the terms of land transfer and land use compensation to be collected in zoning. Municipal decision-makers make significant decisions regarding zoning. The municipal council also approves the municipal building code. Municipalities therefore regulate housing production and people's lives in different ways.
With power comes responsibility. The content of regulations affects whether a municipality is attractive as a place to live, as a location for jobs, and whether the municipality has a sufficient and diverse housing supply.
After the sharp decline in housing construction, municipalities in growing urban areas have a major role to play in ensuring that there is sufficient housing supply in the future. According to a recent study by VTT, the need for housing production over the next 20 years is 31–000 units per year. In recent years, annual housing production has even fallen well below 35 units.
What to do to promote housing construction – and what not to do
The municipalities' clear, transparent and predictable land and housing policy principles promote the implementation of housing projects. The flexibility of land use agreements and land transfer conditions also has a positive effect.
On the other hand, the start of housing projects is made more difficult by various restrictions set by municipalities, such as the use of plot funds, the share of investor sales or average floor areas. At worst, they can completely stop the start of a housing or regional project. The economic equation of a private operator is not realized.
Planning is best promoted through cooperation: partnerships between the municipality and private actors, and by utilizing the resources, expertise and innovations of private actors. This results in economically feasible and implementable plans. A wise decision-maker understands that the perspectives of businesses and investments must be taken into account in planning.
Don't let the devil loose! Let the resident choose roses or tulips
The devil is in the details. Recording every detail in the plan increases construction costs and slows down the implementation of projects.
Municipalities need more understanding of planning and construction economics. Plans should not include anything that will not last, such as average floor area requirements. Plans are valid for years, and the need to build different sized apartments may change. Planning should never be used to make housing policy.
The new Construction Act will revolutionize the operation of building control. Municipal decision-makers must ensure that building control has sufficient resources and prerequisites for smooth permitting.
The Construction Act obliges municipalities to renew their building regulations by the end of 2026. The permit threshold will rise, and therefore the municipality should also consider a reasonable level for regulating the building regulations.
Building regulations concern, among other things, fencing and planting. Regulations should not go down to the level of flower beds: it is not the municipality's job to determine whether a plot has roses or tulips, even if the decision-maker prefers roses. A resident may prefer tulips!
Anu Kärkkäinen
Director, Economic Policy Affairs
anu.karkkainen@rt.fi + 358 50 337 6699Building Construction Industry Association
Hi Anu, great blog – just so realistic…
I'll call you early next week - it might be a bit of a hassle.
Best regards, Pirjo