Tallinn

In Tallinn, as of mid-2025, around 80% of residents are homeowners, while approximately 20% rent their homes; rental rates are higher among younger adults and recent arrivals. The median purchase price for an apartment in Tallinn is about 3,400–3,700 euros per square meter, reflecting an annual price growth of 7–11%, particularly in centrally located and newly built apartments. Median rental prices are around 13–15 euros per square meter per month, with sustained demand from young professionals driving up both rental activity and costs.

Publicly owned housing, including both municipal and social housing, represents a small share of the overall housing stock—less than 5%. Public housing in Tallinn is split: social housing is reserved for economically vulnerable individuals or those with disabilities, granted generally for up to three years, while municipal housing is provided for essential city workers and employees of public institutions. Thus, public housing is not identical to social housing; social housing serves only the most vulnerable, while municipal housing may cater to key workers who do not meet traditional social housing criteria.

Housing cooperatives, or “korteriühistud,” play a crucial role in Tallinn. These are owner-managed apartment blocks, administratively significant but not part of the public or nonprofit rental sector. Their main function is maintenance rather than providing new affordable homes. The city continues to develop affordable rental options and support cooperative models, but the public sector’s contribution to overall housing supply remains limited.

Tallinn’s housing crisis is marked by a persistent supply-demand imbalance and rapidly rising home prices. Over the past year, the average price per square meter for homes in Tallinn has increased by 7–11%, reflecting one of the steepest price increases among European capitals. Since 2023, property values have climbed by about 15%. The national dwelling price index for Estonia rose by almost 5% year-on-year in early 2025, with Tallinn consistently leading these gains. While apartment prices in central districts and modern developments drive this growth, house prices are also increasing, albeit at a slower pace.

This sharp price appreciation has outpaced transaction volume, which has declined over the same period, signaling waning affordability for many residents despite a relatively stable economic environment. Inflation, increased construction costs, and recent tax hikes further pressure affordability, particularly for first-time buyers and households with lower or moderate incomes.

The crisis disproportionately affects new arrivals to the city, young adults, and renters, who face particular challenges accessing affordable, quality housing. International migrants and people relocating from other parts of Estonia to Tallinn for work or study are also vulnerable, as demand far exceeds available supply—especially in centrally located districts. Households with limited resources, including single-parent families and low-income earners, experience the greatest burden from escalating costs. The combined effect has led to growing concerns about housing insecurity and intensified competition for both rental and owned housing in Tallinn.

Tallinn’s city administration is addressing affordable and sustainable housing with a strategy focused on expanding affordable rental supply, driving energy-efficient renovations, and enabling more inclusive development models. The city has set a recent target to build 1,000 new affordable rental apartments by the end of 2025, primarily targeting middle-income families priced out of the private market. Energy efficiency is a parallel focus: Tallinn subsidizes 30–40% of renovation costs for older apartment blocks, particularly in districts like Mustamäe, aiming to reduce energy bills and improve living standards. Innovative programs, such as the SOFTacademy, push forward circular, modular block renovations.

For future supply, Tallinn is implementing an active land bank policy—acquiring and reserving plots for affordable housing projects, often in partnership with private developers. The administration also encourages the creation and strengthening of housing cooperatives, offering workshops, preferential land leases, and plans for a revolving loan fund. The city promotes mixed-use, transit-oriented development and considers mild rent controls in gentrifying areas.

Policy priorities include the “15-minute city” concept to ensure amenities and services are easily accessible from new housing projects. Tallinn is currently developing, in partnership with the private sector, a detailed affordable housing action plan to be finalized in autumn 2025. The city avoids clustering public housing in a few sites, aiming instead to distribute affordable options throughout Tallinn and prevent social segregation.

Housing cooperatives, called “korteriühistud,” are central to housing management in Tallinn, with over 2,500 such associations collectively managing more than 80% of the city’s apartment buildings. Their primary role is administrative—organizing maintenance, renovations, and utility services for apartment owners—rather than constructing or providing affordable housing. Nearly all apartment blocks in Tallinn, especially those built during the Soviet period, operate under this self-governing cooperative model. While discussions on expanding cooperative housing into non-profit or rental models are underway, the sector’s activities remain focused on management rather than new supply.

In recent years, the city has increased its support for housing cooperatives, providing informational workshops, preferential land leases for potential cooperative projects, and preparing a revolving loan fund to encourage innovative, community-based housing solutions. These efforts are part of Tallinn’s broader affordable housing strategy, which includes subsidizing building renovations, expanding the city’s affordable rental stock, and fostering the development of new collective housing models. However, new-build true cooperative rental projects are still rare, and the share of housing cooperatives remains overwhelmingly concentrated in the administrative governance of existing owner-occupied apartment housing rather than as a vehicle for expanding affordable, non-market housing options.