Housing Policy and Residential Differentiation in Post-Socialist Tallinn

ABSTRACT

This paper analyses the role and effects of housing policies on residential differentiation in the city of Tallinn, the capital of Estonia. The focus is on contemporary ‘post-privatization' housing-policy measures and their effects, although the transformation from socialism to a market economy during the 1990s is also covered. A distinct contrast was found between housing policies in Estonia and western Europe, where the welfare role is often to mitigate the detrimental effects of economic restructuring and to prevent segregation. Estonian housing policies at state and local levels do not even aim to reduce, prevent or slow down the harmful effects of the considerable income disparities that manifest in housing inequality and increasing residential differentiation. One of the main mechanisms driving residential differentiation is the relocation of people according to their ability to pay in connection with the increasing amount of renovation being undertaken. It is increasingly evident not only between neighbourhoods but also between tenure segments: poor people seem to be concentrated in poor housing in all categories.

KEY WORDS:

• Housing policy
• residential differentiation
• post-socialist transformation
• Estonia
• Tallinn

Notes

*Excluding one significant deviation upwards.

1. For instance, in the 2004 index of economic freedom (Miles et al., 2004), issued by the Heritage Foundation and the Wall Street Journal, Estonia ranked sixth after Hong Kong, Singapore, New Zealand, Luxembourg and Ireland, above countries such as the UK, Denmark, Switzerland and the US.

2. During the Soviet era the state had a central role in the production, ownership and distribution of housing. The dominant form of tenure was public rental housing (76 per cent in 1992), which was distributed via the trade unions; owner occupation (10 per cent) in the form of single-family housing and housing co-operatives (14 per cent), was strictly regulated by the state, and was complementary to the provision of public rental dwellings. The public rental housing stock also included all multifamily housing constructed before 1945, which was transferred to national ownership at the beginning of the socialist era.

3. There were two overriding motives for tenants to buy their flats. On the one hand, the value gap between the cheap purchasing price and the higher market price (of any kind of flat) was attractive, and people wanted to secure the right to leave the flat as an inheritance. On the other hand, the tenants feared that unless they bought, they would eventually lose the right of occupancy. Many followed the herd and became homeowners without understanding the consequences. There were several misunderstandings, including the notion that it would be immediately cheaper to live in an owner-occupied flat since (the formerly heavily subsidized, all housing costs incorporated) rent would no longer be payable (Kõre et al., 1996, p. 2155; Liias, 1998).

4. Eligibility for municipal rental housing is defined in Appendix 3 of Laws and Regulations on Housing in Ownership in the City of Tallinn (Tallinna linna omandis olevate eluruumisega seotud õigusaktide kinnitamine), www.tallinn.ee/ametid/elamumajandusamet/oigusaktid. Eligibility for social rental housing is defined by the City of Tallinn's Office of Social Work and Public Health Care on their home page www.stamet.ee/index.php?page =145 (accessed 3 March 2004).

5. Ethnic residential differentiation was more apparent given that non-Estonians were privileged over Estonians in the distribution of new public rental dwellings. Consequently, non-Estonians were over-represented in multifamily housing constructed in the socialist era, whereas pre-socialist housing, and especially single-family housing, was more often occupied by Estonians (Org, 1989). Nonetheless, neither socio-occupational nor ethnic differentiation was significant in the high-rise housing estate districts of Mustamäe and Väike-Õismäe. Only the Lasnamäe district is ethnically Russian-biased.

6. The different indicators and spatial divisions used in the studies have not enabled the measuring of change in the level of residential differentiation between the end of the socialist era and recently.

7. In addition to building municipal rental housing, the city also has offered another incentive to persuade the tenants of restituted houses to empty their dwellings. Since the year 2002, it pays so-called ‘emptying compensation’ of EEK10,000 (∈639) per household to move out and give up their status as a tenant of a restituted house. This compensation was paid to 200 households in 2002.

8. Ironically, the misunderstanding that municipal rental housing is developed to accommodate the poor is what has coloured popular reactions. For instance, when the press revealed that a member of parliament (who was a restitution tenant) was entitled a municipal rental dwelling it caused major controversy because of her good salary. Further, occasional NIMBY (not-in-my-back-yard) attitudes against the new municipal rental houses have been fed by the prejudicial claim that criminals and other asocial people (in popular understanding eligible people other than the tenants of restituted houses) would live in them.

9. According to the expert evaluation of social workers, Tallinn has 2000 homeless people (i.e. 0.5 per cent of the population). This figure is expected to increase. (Kährik et al., 2003b, p. 41).