Earlier this week, the city council released an analysis of affordable housing in the capital. It showed it was becoming hard for people to buy their own homes.

The analysis will have given the city government a comprehensive overview of the housing market situation, Deputy Mayor for Urban Planning Madle Lippus (SDE). This includes available housing stock, its condition and location.

The analysis proposed several local and national policy recommendations.

"It's important to choose among these measures, which vary in the degree to which they intervene in the market. We need to assess which ones could be adapted to Tallinn and how," Lippus said.

"There are simple examples, like renovating buildings and improving energy efficiency – we're already working on that. Another very important measure is to speed up the planning process," she noted.

The official stressed Tallinn does not plan to start building houses itself.

The city now plans to convene a council to discuss which proposals could be adopted. Lippus said the main focus will likely be placed on an active land policy.

"There are various international examples of how this has been implemented. One possibility, which has already been discussed with developers in Tallinn, is that under certain conditions, for example, if a developer receives supportive incentives such as more height or density, some portion of the apartments would be offered at affordable prices," she explained.

Lippus emphasized that apartments should not only be affordable at the time of purchase but should remain accessible over time.

One example, also used elsewhere, is that housing can be developed on city-owned land in cooperation with the private sector, or building rights can be granted under agreed pricing policies. According to the deputy mayor, the market is also open to considering these issues.

"It's common to think this is not possible in Tallinn, but one key point the study reveals is that the problem mainly affects families and lower-income individuals, about 50,000 people," Lippus said.

The issue of accessibility is not limited to a small number of people living far away, but affects many, including teachers, rescue workers, and police officers, especially families with several children, she said: "The rise in housing costs has been outrageous."

Affordability is defined as housing costs not exceeding 40 percent of a household member's income. For home purchases, a price is considered affordable if it equals about three years of income.

Housing policy plan could be ready by fall

Exactly what the model will look like is a matter for negotiation. The new council will meet in July and the plan should be in place the fall.

"I definitely do not see it as necessary to subsidize in any way. In the models we are developing, the goal is for them to be financially sustainable. If the city invests in something, the city's interest is, of course, not to earn a profit, but the city certainly has an interest in ensuring it does not result in significant additional costs. The city's opportunity lies precisely in the fact that if we're not expecting profit, our expenses are also lower," Lippus explained.

The general trend shows that housing built during the Soviet period tends to be more affordable. New developments, based on urban planning logic, are concentrated in specific areas.

Lippus said that in some areas these are very uniform, for example, there are few units available that would suit larger families. In her view, the city should aim to diversify the housing stock.

"In areas where very small apartments have been built, it would make sense to create larger ones. The practice Tallinn has followed so far, and which the study clearly highlights – where buildings have been constructed by the city in clusters, like the social and municipal housing in Raadiku – is a very problematic approach and should definitely not be continued. It creates an entire set of social problems, and we are already addressing this from an urban planning perspective. If affordable housing is built, it should be located in various places across the city to avoid concentration. Otherwise, we ourselves are supporting further segregation," she said.

Real estate analyst sees downsides in the measures

Real estate analyst Tõnu Toompark said all measures that negatively impact the market come with drawbacks.

"Although those involved may deny it, the aim is to follow the example of Western Europe, where by locking people into the housing market, a voter base is created. In other words, people are bought off with cheap housing to become loyal voters, and in this way, the supply of housing is quietly nationalized," Toompark said.

In his view, there are no real success stories to be found when it comes to regulation. "If it's publicly stated that there are 50,000 people who should be offered affordable housing, and groups like rescue workers, teachers, police officers, and nurses are mentioned, then I think this is demeaning to these people. If they are not paid a salary that allows them to buy or rent real estate on their own, and instead they are left to line up for the city's soup pot like dependents, that is degrading," he said.

Toompark noted that current rental prices are at the same level as three years ago, and purchase-sale prices also remain stable, depending on the segment.

He was also critical of the idea of offering lower-priced apartments within broader private developments. Toompark described the inclusion of cheaper units in private developments as essentially creating stairwells for the poor.

"Imagine a housing association meeting where on one floor live people earning three times the average salary, and in another stairwell, people earning half the average. How are they supposed to agree on covering building expenses? On whether to carry out renovations or not?" he asked.

Toompark argued that accelerating the planning process is the only solution for improving housing accessibility. According to the Estonian Association of Real Estate Firms, each year of delay in planning can add €100–150 per square meter to the final property price.

"If the average processing time is seven years, that adds up to around €1,000. Compared to Riga, a Latvian buyer there can get an extra room for the same money," he explained.

The analyst also believes there is no shortage of housing in Tallinn. Accessibility issues, he said, are primarily about price. But he added that not everyone needs to live in Tallinn.

The problem in the market, Toompark believes, is that housing does not match people's expectations. "People look at fancy apartments in Noblessner or the city center and think, 'I want that, that's good and high quality,'" he said, adding that the average Tallinn home is a two-room apartment in Mustamäe.

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