Austerity measures drive up homelessness in Finland

By admin On Apr 18, 2025

Photo: ICPonline

Finland is facing a housing crisis driven by government austerity measures that Amnesty International says are undermining the country’s long-standing success in combating homelessness.

In a new report, the organisation says recent budget cuts have caused a surge in evictions, housing insecurity and street homelessness for the first time in more than a decade. The measures, introduced by Prime Minister Petteri Orpo’s government, include reductions to housing allowances, social security benefits and funding for affordable housing and support services.

According to the report, homelessness increased by 11% in 2024. In some areas, the rise was more severe. In Tampere, the number of people experiencing homelessness rose by more than 40%. Rough sleeping increased by 50% nationwide.

Finland had previously gained international recognition for its success in reducing homelessness through the Housing First model, which focused on providing stable housing before addressing other social issues. The country cut homelessness by 80% between the 1980s and 2023. Until recently, it had aimed to eliminate homelessness entirely by 2027.

The new government has now abandoned that target, aiming instead only to eliminate long-term homelessness. Amnesty says this shift, combined with social spending cuts, is reversing decades of progress.

Cuts to housing allowances and last-resort social assistance have made housing less affordable for low-income groups. One in five people receiving social assistance have been advised by the Social Insurance Institution of Finland (Kela) to find cheaper housing. However, a lack of affordable homes means many cannot follow this advice.

Evictions rose by 23% in Helsinki and by 11% across the country. In Helsinki, housing counselling services reported a 49% rise in clients.

Low-income workers are increasingly affected. Many employed people have lost eligibility for housing benefits or received lower payments, while wages have not kept pace with inflation. The report notes a growing number of workers seeking food aid or church assistance to cover rent and other essentials.

Families with children, particularly those with migrant backgrounds, are experiencing overcrowding and forced relocations. The report cites cases of large families living in studio flats and families being moved to other cities after eviction, disrupting children’s schooling and support networks.

Marginalised groups – including people with mental illness, substance dependency, migrants and LGBTQI individuals – face heightened risk. These populations already struggled to access housing and now encounter greater competition for affordable homes and more frequent discrimination in the rental market.

Service providers are also under pressure. Cuts to funding have affected housing counselling, non-governmental organisations and municipal services. State funding for housing counselling was halved. The budget for social sector NGOs is set to fall from €383 million in 2024 to €252 million by 2027.

Despite increased demand, homelessness programme funding has not been raised. The government has allocated €10.13 million for 2024–2027, the same level as during the previous administration. Adjusted for inflation, this represents a real-term decrease.

Housing construction has also slowed sharply. Building permits fell by over 50% between September and November 2023. Although temporary support was introduced for 2024, future support is being reduced. Subsidies for housing loans will fall by €500 million in 2025, with further reductions planned for subsequent years.

The government has also cut investment grants for housing aimed at special groups, including youth, disabled people and those recovering from addiction. These grants will be reduced from €120 million in 2023 to €15 million annually through 2028.

The government argues that these cuts are necessary to control public debt and promote a functioning housing market. However, Amnesty and other critics say a market-led approach will not meet the needs of low-income people and that cuts have already had a clear human rights impact.

Amnesty states that housing is a human right under international law and that Finland has obligations to ensure access to adequate housing. The organisation says austerity measures have increased poverty, anxiety and fear of eviction. Several interviewees reported having to choose between buying food, medicine or paying rent.

The report calls on the government to reverse course and reinstate a comprehensive homelessness strategy. It urges stronger support for affordable housing, social security and targeted services.

Amnesty also recommends permanent funding for housing counselling and measures to ensure that no one is made homeless by eviction. It says the state should not rely on churches or charities to meet its human rights obligations.

The Ministry of Environment and Climate Change has acknowledged that social security cuts have contributed to rising homelessness. Despite this, no new funding has been allocated and further austerity measures are under consideration.

Amnesty warns that if current policies continue, the number of people experiencing inadequate housing will rise further. It concludes that the housing crisis is not a result of personal failure, but of government failure to meet its legal responsibilities.

Source: www.helsinkitimes.fi