How Estonia is Managing Major Housing Reform

Diversification of tenant needs is a broad topic. This morning pitch of the Collaborative Housing session showed all in attendance that trying to start a whole new housing industry from scratch is the definition of responding to tenant needs.   Estonia started a major housing reform around 10 years ago.  Estonia is a good example for many Eastern European countries on how to build up a housing sector movement.  We learned from Andres Jaadia of the Estonian Union of Co-operative Housing Associations that little of the housing stock in Estonia is rental housing. Estonia privatized a large number of their dwellings after the fall of communism.  A large number of less advantaged people are actually owners of their dwellings.  They live in condominiums organized into housing associations.  Almost 60% of the total population in Estonia belongs to such an association. “Social rental housing in Estonia currently represents only about 1% of the total housing stock in the country and the rental sector is small. About 96% of the dwelling stock is currently in private ownership.”

Outside of attending this session, I also had the privilege in March 2015 of visiting Eesti Korteriühistute Liit or the Estonian Union of Co-operative Housing Associations (EKÜL) in Talin.  The organization acts as an umbrella trade group for co-operative housing associations throughout Estonia.  Membership to the organization is voluntary but they represent over 1400 members currently on a local, national and international level.  The membership base represents over 15% of the total housing stock in the country.  EKÜL cooperates in partnership with state institutions, municipalities, universities, private companies and NGOs. Its goals are to progress and market the housing association effort and to advocate and share in legislation by being an active voice in the shaping of legislative policy on housing in Estonia.  Another important part of their work is to provide training, consulting and collaboration with the management and administration structures of Estonian housing associations.

There are 3 steps involved in the history of Estonia’s Housing Reform.

  1. Privatizing of Apartments- The communist government nationalized most of the land and the buildings in the 1940-1950 times.  Owners were almost never compensated as the state controlled all the housing, construction and maintenance.  In 1991, more than 65% of all  the housing in the country belonged to the state.The transformation back to privatization grew from several causes.  The privatization movement went hand and hand with the mindset of the population.  Residents completely rejected the former collective behavior used in a communistic state.  Instead, the people wanted individual solutions with the right for more responsibility and liberty.  On top of the peoples will to control more of their rights, the state could not maintain the units and had failed in providing quality housing to the citizens.  Lastly, the state wanted to return property back to owners that had experienced the injustice of a land seizure during the period of collectivization.
  1. Establishing of apartment associations: A need for a new structure to organize and manage the housing associations came about.  This is how apartment associations came into existence.  About 65% of Estonian population lives in apartment associations. Apartment associations are the most accepted way of management of residential buildings and cooperation. Each co-operative housing association is self-financing not-for-profit organization managing one multi-apartment building.   A housing association can be as small as a few units or as big as a few thousand units depending on the size of the building or complex.   In total there are 10,100 different associations active in Estonia today.
  2. Creation of an industry: To help professionalize and advocate on behalf of the housing industry, the Estonian Union of Co-Operative Housing Associations came into existence.  The organization established in 1996 and its main office is in the capital city of Tallinn.  All the members are co-operative housing associations or apartment associations established after the privatization reform of the 1990’s. All together, they represent 1400 members covering 56,000 units and work with many partners to advocate and train on behalf of the industry.

The Future:

According to Anu Sarnet, the future of the housing sector in Estonia depends on the continued improvement of not only the housing stock but the continued improvement in management and technical expertise.  The amount of new construction in Estonia will not make up for the number of residential units that will leave the housing market because they reach the end of their usability.  That means Estonia as a country must continue to find creative ways to repair renovate and lengthen the existing buildings lifespans.  In her estimates, the country will need to increase renovations by several times the current rate reaching upwards of 8,000 units a year.

Members must also improve their knowledge base.  EKÜL created a series of trainings and seminars to help housing associations.  The elements of the training system are short term training sessions, seminars and information days for the boards, bookkeepers and executive directors of housing associations all over Estonia.   One example is recently the 37-hour trainings of renovation for representatives of housing associations in 7 towns all over Estonia.  EKÜL also provided 120- hour supplementary training for executive directors of housing associations and issued diplomas. EKÜL organized training in the  5 biggest towns in Estonia.

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