State as a real estate speculator

Authors: Mika Hyotylainen*, University of Helsinki
Topics: Land Use
Keywords: Land policy, real estate speculation, gentrification, Helsinki
Session Type: Paper
Day: 4/5/2019
Start / End Time: 5:00 PM / 6:40 PM
Room: Washington 4, Marriott, Exhibition Level
Presentation File: No File Uploaded

In 2017, an office building was demolished in Helsinki‚Äôs old working class area of Sörnäinen. The building was owned by the state real estate company, Senate Properties, who instead of renovating the building, had decided to build a new one. Soon after the building was gone, Senate Properties informed however, that it wants to sell the land. Today, a large hole in the ground is waiting for development. The hole is in a heavily gentrifying area that in the coming years will see lots of investment and development of offices, hotels, apartments, new bridges connecting areas of the city and a new building for the Academy of Fine Arts. Since the mid-1990s, the Senate Properties has been responsible for the management of the real estate owned by the state of Finland. Before the corporatization of the state real estate, the state real estate department met the demand for land by municipalities for housing, schools and health care centers. The disposal of land and the projects of the Senate Properties have been profit-oriented and it has aimed at maximizing land rent. The Sörnäinen case suggests that the state has also become a real estate speculator. Is Senate Properties waiting for the value of the Sörnäinen site to go up? Is it looking for prospective buyers? Or, could it give the site to the City Helsinki, for instance, to build affordable housing? The paper discusses the speculative activity of the state. Data is collected by interviewing and analyzing policy documents.

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