The noose tightens: homelessness continues to rise in Finland

Finland used to be one of the leading countries in Europe for managing homelessness, and for a long time, homelessness in the country was falling. Finland even introduced the Housing First model around the world.

But last year, the number of people without a permanent home rose for the second year in a row. In 2025, the increase was as much as 20 per cent, the highest in the history of keeping statistics on homelessness. “I’m really afraid that this will result in an ugly mess,” says Paula Saikkonen, Research Manager at the Finnish Institute for Health and Welfare.

Saikkonen has researched the welfare state and social security, among other things, and is concerned about the direction of the current situation.

She notes that homelessness is a kind of extreme circumstance, and states that by the time we get to the stage where solutions to homelessness must be found, the situation is already quite bad. “Homelessness is the consequence of long-term development, and it rarely happens overnight.”

The situation today is that there is no end to the recession in sight, long-term unemployment is rising, and the need for social assistance is increasing. At the same time, social assistance and housing allowances have been cut. As a result, Saikkonen notes that households are experiencing deepening financial distress.

In addition, client fees for social care and healthcare services are rising, and many people will have to pay more and more fees out of their own pockets. Saikkonen explains that this that means people will not go to the doctor, or they will try to save on housing costs.

“These are the choices that people make. Rent arrears are not often the result of someone simply stopping their rent payments. Rather, people pay a small part of the rent, and the arrears accumulate over time.”

Rent arrears is the most common reason for evictions, and a record of payment disruption makes it difficult to get a new apartment. Some people hit rock bottom, which, at its most extreme, leads to homelessness.“The noose tightens for those who are in a very difficult financial position,” Saikkonen summarises.

She points out there is still no research data on the reasons for the current acceleration in homelessness. However, she believes that social security cuts play a role. “Social security has been reduced throughout the term of the current government. There have been many changes, and, of course, they accumulate.”

It is precisely these cumulative cuts that “constantly target people who are already in challenging positions,” as Saikkonen puts it, that will result in an ugly mess.

In Finland, the Centre for State-Subsidised Housing Construction collects data from municipalities to compile annual statistics on homelessness. The municipalities also believe that the reasons for the increase in homelessness are the changes to social security, and the lack of proportion between rent levels and housing costs approved by Kela (the government agency in charge of social security programmes).

How big a role does adequate social security play in homelessness policy and the prevention of homelessness? “It does play a big role,” Saikkonen says.

However, she points out that social security does not only mean financial benefits, but, more broadly, it also refers to various social care and healthcare services. Preventing homelessness also requires a wide range of social work services, healthcare, housing advice…

“People need personalised encounters. A housing allowance is enough for a large number of people, but some people need income support. Our public services could make sure that people do not end up in terribly bad life situations.”

This is at the heart of the Finnish welfare state. Housing alone is not enough to prevent homelessness; the entire system must operate in such a way that people do not fall through the cracks. To sum up, good homelessness policy needs a broad welfare state? “Exactly,” Saikkonen agrees.

The latest changes to income support will take effect in the spring and will cut or limit benefits for many people. How does Saikkonen view the coming developments? “It looks awful, especially for vulnerable groups.”

She admits that the situation is difficult as the national economy is in a terrible state and there is little work to be had. “But this is the time when we should expressly ensure that if and when the situation improves, there will be people in the country who are able to work and to function.”

Currently, the cuts are targeted at people in very difficult positions, and many of them do not have the opportunity to influence their situation, or even to take care of their own affairs. As we know from the health sector, Saikkonen points out, acting in time is much cheaper than treating a chronic problem.

If you are already homeless, it may take a long time to recover from the situation. “In the long run, it is a problem for everyone if people are falling off a cliff.”